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Stack Capital Group Inc. Reports Q1-2022 Financial Results

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Stack Capital Group Inc.
Stack Capital Group Inc.

TORONTO, May 10, 2022 (GLOBE NEWSWIRE) -- Stack Capital Group Inc., (“Stack Capital” or the “Company”) (TSX: STCK and STCK.WT) today announced its financial results for the first quarter ended March 31, 2022. Stack Capital reports all amounts in Canadian Dollars unless otherwise stated.

Company Commentary:

  • As at March 31, 2022, Book Value per Share of the Company was $11.95 and its cash position was $67 million

  • To date, the Company has completed 6 investments into the following companies:

  • SpaceX(space exploration & communications)

  • Prove Identity, Inc.(cyber-security)

  • Hopper, Inc.(travel & leisure)

  • Newfront Insurance, Inc.(insurance & benefits)

  • Bolt Financial, Inc.(e-commerce)

  • Varo(neo-banking)

  • Recent dislocations in the public markets have created investment opportunities across private equity that the Company believes offer strong risk/reward profiles. Stack Capital will look to capitalize on the market dislocation via primary issuances and secondary transactions

“The nearly $9 million increase in Stack Capital’s combined position of SpaceX and Bolt, after only nine months of operation post our IPO, illustrates the importance of valuation in our investment process. Overall, we’re very pleased with the companies that we have been able to invest into thus far and remain laser-focused on deploying capital into companies that possess strong balance sheets, attractive growth rates, and clear paths to profitability”, said Jeff Parks, CEO of Stack Capital. “Continuing to focus our investments in preferred shares provides an additional margin of safety, mitigating risk moving forward.”

Q1-2022 Highlights

  • As at March 31, 2022, the Book Value of the Company was $108.6 million, and the Book Value per Share was $11.95. A detailed summary of Book Value per Share is as follows:

Breakdown of Book Value per Share as at March 31, 2022:

Cash

$

7.44

Investment – Varo Money Inc.

0.70

Investment – FNEX Ventures LLC – Series 103 (SpaceX)

0.80

Investment – Bolt Financial, Inc.

1.66

Investment – Prove Identity Inc.

0.54

Investment – Hopper Inc.

0.83

Net other assets

(0.02

)

Book Value per Share

$

11.95

  • Bolt Financial Inc. (“Bolt”) completed a US$355 million Series E-1 financing, which triggered the conversion of the Company’s convertible debenture and accrued interest to Series E-1 preferred shares. As a result, the Company’s position within the portfolio increased by approximately $7.7 million from this transaction. Bolt is a global leader in the one-click checkout process and fraud protection for online retailers. Bolt has developed a platform that connects retailers with millions of shoppers in a unified network, simplifying the online buying process for both. With Bolt accounts, all purchases are more efficient with no repeat logins and passwords required.

  • In February 2022, Stack Capital announced an investment of US$6 million in Hopper Inc. (“Hopper”). Hopper is one of the world’s fastest-growing AI-powered travel tech platforms. Hopper initially became known as an app to book flights through an AI enabled predictive price solution but has since evolved into multiple business lines that have strengthened the Company’s revenue and scalability. Hopper has now surpassed US$2 billion in travel bookings and travel related financial services annually.

Subsequent Events

  • In May 2022, Stack Capital announced an investment of US$8 million in Newfront Insurance, Inc. (“Newfront”). Newfront is a provider of insurance, retirement solutions, and employee benefits; its innovative software-driven platform is modernizing the insurance brokerage business, delivering a better experience for customers, and providing insurance professionals with the tools to enhance productivity. Already profitable, Newfront is growing at a rate that significantly exceeds the industry average; meanwhile, its established client base, made up of some of silicon valley’s top companies, offers attractive organic growth potential.

About Stack Capital

Stack Capital is an investment holding company and its business objective is to invest in equity, debt and/or other securities of growth-to-late-stage private businesses. Through Stack Capital, shareholders have the opportunity to gain exposure to a diversified private investment portfolio; participate in the private market; and have liquidity due to the listing of the Common Shares and Warrants on the TSX. At the same time, the public structure also allows the Company to focus its efforts on maximizing long-term performance through a portfolio of high growth businesses, which are not widely available to most Canadian investors. SC Partners Ltd. (the “Manager”) has taken the initiative in creating the Company and acts as the Company's administrator and is responsible to source and advise with respect to all investments for the Company.

For more information, please visit our website at www.stackcapitalgroup.com or contact:

Brian Viveiros
VP, Corporate Development and Investor Relations
647.280.3307
brian@stackcapitalgroup.com

Non-IFRS Financial Measures

This press release may make reference to the following financial measures which are not recognized under International Financial Reporting Standards (“IFRS”), and which do not have a standard meaning prescribed by IFRS:

  • Book Value - the aggregate fair value of the assets of the Company on the referenced date, less the aggregate carrying value of the liabilities, excluding any deferred taxes if applicable, of the Company; and

  • Book Value per Share (BVPS) - the Book Value on the referenced day divided by the aggregate number of Common Shares that are outstanding on such day.

The Company’s Book Value per Share is a measure of the performance of the Company as a whole. The Company’s method of determining this financial measure may differ from other issuers’ methods and, accordingly, this amount may not be comparable to measures used by other issuers. This financial measure is not a performance measure as defined under IFRS and should not be considered either in isolation of, or as a substitute for, net earnings per share prepared in accordance with IFRS.

Cautionary Note Regarding Forward-Looking Information

This press release contains forward-looking information. Such forward-looking statements or information are provided for the purpose of providing information about management’s current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes. Any such forward-looking information may be identified by words such as “proposed”, “expects”, “intends”, “may”, “will”, and similar expressions. Forward-looking information contained or referred to in this press release includes, but may not be limited to, the exit conditions of the TSX Sandbox; and the business of Stack Capital and the risks associated therewith, including those identified in the Annual Information Filing under the heading “Risk Factors”.

Forward-looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information, but which may prove to be incorrect. Although Stack Capital believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because Stack Capital can give no assurance that such expectations will prove to be correct. Factors that could cause actual results to differ materially from those described in such forward-looking information include, but are not limited to, the ability to capitalize on investment opportunities. The forward-looking information in this press release reflects the current expectations, assumptions and/or beliefs of Stack Capital based on information currently available to Stack Capital.

Any forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, Stack Capital disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events, or results or otherwise. The forward-looking statements or information contained in this press release are expressly qualified by this cautionary statement.