TORONTO, April 1, 2020 – Flow Capital Corp. (TSXV: FW) (“Flow Capital” or the “Company”) is pleased to announce the appointment of Gaurav Singh as Chief Financial Officer of the Company, effective April 1, 2020. Gaurav succeeds Donnacha Rahill, who held the role since 2014 and has left the Company to pursue other opportunities. 

Gaurav, most recently Chief Financial Officer and a continuing Director at GreenBank Capital Inc. (CSE:GBC | OTCMKTS:GRNBF | FRA:2TL), brings over 15 years of experience including several board and executive positions across a portfolio of small-cap Canadian public and private companies. He has undertaken leadership roles in corporate finance, strategy, trade-policy advocacy, and start-up operations across the Technology, Media, Mineral Resources, and Professional Services sector, in India, Europe, and North America. He holds an MSc. in Finance from London Business School, U.K., and a Bachelor of Commerce from Delhi University, India. 

“We are excited to have Gaurav joining our team. He brings a mix of entrepreneurial skills and business experience that will help us, and our investee companies grow,” said Alex Baluta, CEO of Flow Capital.  “Donnacha has made significant contributions to our business. I would like to thank him for his hard work and dedication and wish him every success in the future.”    

COVID-19 Impact Assessment

Flow Capital is closely monitoring the evolving COVID-19 developments and has established a regular cadence of gathering updates from investee companies. All portfolio companies have confirmed that their resources have safely transitioned to remote-enabled operating models where possible. Only one company has temporarily quarantined its operating facilities, for two weeks, as a precautionary measure.

Impact on demand at portfolio companies has been mixed. Several companies have cautioned that some of their clients are slowing fulfillment cycles and delaying new purchases. However, they believe it may be early to make a meaningful assessment of the impact on revenues. One company has seen a delay in order delivery capability primarily due to short term supply chain disruptions in Asia.

Conversely, investee companies in fields related to essential services (e.g. healthcare) and communications infrastructure, or others that offer services and software rather than physical product, are observing stable or even slightly increasing demand.

Flow Capital has a strong balance sheet and capital available to support our portfolio companies should they require financial support during these uncertain times.  Flow Capital is also actively encouraging all portfolio companies to consider availing themselves of the government sponsored support programs that are now becoming available. 

Other Business Updates

Flow Capital has received the final C$1.5M payment relating to the sale of its LOGiQ Global Partners (“LOGiQ”) business to Ninepoint Financial Group Inc.  The LOGiQ division was sold in April 2019 for a total consideration of $12.4M.

In addition, the Company continues to work to recover assets from non-performing past transactions wherever possible. In recent weeks, Flow Capital obtained default judgements on Lattice Biologics (TSXV: LBL) and Compression Generation. The Company is evaluating the options available as a result of these judgements. Flow will continue to pursue all avenues, including legal remedies if necessary, towards ensuring a fair return on all its investments.

“The team at Flow Capital will continue to monitor our portfolio companies and help them where we can.  Flow Capital is in an enviable position with a strong balance sheet, with total cash on hand of more than C$10M. Nevertheless, we have plans in place to control costs and reduce expenses should that be necessary,” said Mr. Baluta. “While we will be deploying our capital cautiously, we are seeing an increase in opportunities from good prospects partially because the equity markets are being substantially disrupted due to COVID-19.”

 

About Flow Capital

Flow Capital Corp. is a diversified alternative asset investor and advisor, specializing in providing minimally dilutive capital to emerging growth businesses. To apply for financing, visit www.flowcap.com.

For further information, please contact:

Flow Capital Corp.

Alex Baluta
Chief Executive Officer
[email protected]

1 Adelaide Street East, Suite 3002,
PO Box 171,
Toronto, Ontario M5C 2V9

Forward-Looking Information and Statements

This press release contains certain “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the Company’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. The forward-looking information contained herein may include, but is not limited to, information with respect to proposed purchases, if any, by the Company under the NCIB.

An investment in securities of the Company is speculative and subject to a number of risks including, without limitation, risks relating to: the need for additional financing; the relative speculative and illiquid nature of an investment in the Company; the volatility of the Company’s share price; the Company’s ability to generate sufficient revenues; the Company’s ability to manage future growth; the limited diversification in the Company’s existing investments; the Company’s ability to negotiate additional royalty purchases from new investee companies; the Company’s dependence on the operations, assets and financial health of its investee companies; the Company’s limited ability to exercise control or direction over investee companies; potential defaults by investee companies and the unsecured nature of the Company’s investments; the Company’s ability to enforce on any default by an investee company; competition with other investment entities; tax matters, including the potential impact of the Foreign Account Tax Compliance Act on the Company; the potential impact of the Company being classified as a Passive Foreign Investment Company; the Company’s ability to pay dividends in the future and the timing and amount of those dividends; reliance on key personnel, particularly the Company’s founders; dilution of shareholders’ interest through future financings; and general economic and political conditions; as well as the risks discussed in the Company’s public filings. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information and forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.

In connection with the forward-looking information and forward-looking statements contained in this press release, the Company has made certain assumptions. Assumptions about the performance of the Canadian and U.S. economies over the next 24 months and how that will affect the Company’s business and its ability to identify and close new opportunities with new investees are material factors that the Company considered when setting its strategic priorities and objectives, and its outlook for its business.

Key assumptions include, but are not limited to: assumptions that the Canadian and U.S. economies relevant to the Company’s investment focus will remain relatively stable over the next 12 to 24 months; that interest rates will not increase dramatically over the next 12 to 24 months; that the Company’s existing investees will continue to make royalty payments to the Company as and when required; that the businesses of the Company’s investees will not experience material negative results; that the Company will be able to successfully integrate and grow the businesses of its predecessor companies; that the Company will continue to grow its portfolio in a manner similar to what has already been established; that tax rates and tax laws will not change significantly in Canada and the U.S.; that more small to medium private and public companies will continue to require access to alternative sources of capital; that the Company will have the ability to raise required equity and/or debt financing on acceptable terms; and that the Company will have sufficient free cash flow to pay dividends. The Company has also assumed that access to the capital markets will remain relatively stable, that the capital markets will perform with normal levels of volatility and that the Canadian dollar will not have a high amount of volatility relative to the U.S. dollar. In determining expectations for economic growth, the Company primarily considers historical economic data provided by the Canadian and U.S. governments and their agencies. Although the Company believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements.

The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release. All subsequent written and oral forward- looking information and statements attributable to the Company or persons acting on its behalf is expressly qualified in its entirety by this notice.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.