Stack Capital Group Inc. Reports Second Quarter 2022 Financial Results

TORONTO, Aug. 03, 2022 (GLOBE NEWSWIRE) — Stack Capital Group Inc. (“Stack Capital” or the “Company”) (TSX: STCK and STCK.WT) today announced its financial results for the three and six months ended June 30, 2022. Stack Capital reports all amounts in Canadian dollars unless otherwise noted.

Company Comment:

  • As of June 30, 2022, the Company’s book value per share was $11.80 compared to $11.25 as of June 30, 2021, an increase of 5%.
  • The Company’s cash position as of June 30, 2022 was $44.9 million or $4.94 per share.
  • To date, the Company has made seven investments totaling $62.6 million or $6.88 per share as of June 30, 2022, in the following:
    • SpaceX (space exploration and communications)
    • Hopper, Inc. (travel & leisure)
    • Bolt Financial, Inc. (e-commerce)
    • GoEuro Corp. (Omio) (travel & leisure)
    • Prove Identity, Inc. (cyber security)
    • Newfront Insurance, Inc. (insurance & benefits)
    • Varo Money, Inc. (neo-banking)
  • Recent turmoil in financial markets has created attractive private equity investment opportunities which the Company believes offer strong risk/reward profiles. Stack Capital will seek to take advantage of the current market weakness through primary issuances and secondary transactions

“Despite the challenging market environment, we are very pleased to report that several of the companies in our existing portfolio have continued to generate growth,” said Jeff Parks, CEO of Stack Capital. “With approximately 42% of the portfolio in cash, we are in an excellent position to take advantage of opportunities arising from recent market weakness. As with our previous investments, we will focus our efforts on targeting preferred shares of leading private companies, which provide an additional margin of safety to our shareholders.

Q2-2022 Highlights

  • As of June 30, 2022, the Company’s book value was $107.2 million and the book value per share was $11.80. A detailed summary of book value per share is as follows:
Breakdown of book value per share as of June 30, 2022:
Cash $ 4.94
Investment – Varo Money, Inc. 0.37
Investment – FNEX Ventures LLC – Series 103 (SpaceX) 0.98
Investment – Bolt Financial, Inc. 1.72
Investment – ​​Prove Identity Inc. 0.83
Investment – ​​Hopper Inc. 0.85
Investment – ​​Newfront Insurance, Inc. 1.14
Investment – ​​Omio 0.99
Other net assets (0.02 )
Book value per share $ 11.80
  • In May 2022, Stack Capital invested US$8 million in Newfront Insurance, Inc. (“Newfront”). Newfront is a provider of insurance, retirement and benefits solutions; its innovative software platform modernizes the insurance brokerage business, delivers a better customer experience and provides insurance professionals with the tools to improve productivity. Already profitable, Newfront is growing at a rate well above the industry average; At the same time, its established customer base of some of Silicon Valley’s largest companies offers attractive organic growth potential.
  • In May 2022, Stack Capital invested US$7 million in GoEuro Corp. (“Omio”). Omio is a leading multimodal travel booking platform that enables consumers to easily book trains, buses, ferries and flights, saving them time and money. Omio started as an app to book trains across Europe with an easy-to-use solution, but has since expanded to multiple business sectors and geographies which has boosted both revenue and scalability.
  • In June 2022, Stack Capital invested an additional US$2.1 million in Prove Identity Inc. (“Prove”). As a result of this investment at a lower share price, the Company revised the fair value of the common shares previously held, resulting in an unrealized loss on this investment of $0.2 million in the statements of earnings. and comprehensive income (loss).
  • During the second quarter of 2022, Stack management recorded an unrealized loss on its position in Varo Money, Inc. (“Varo”). Given the decline in valuations of public FinTech companies, the Company concluded that the current estimate of Varo’s fair market value had changed and, as such, recognized an unrealized loss on the investment of 3.3 million in the statements of operations and comprehensive income. (Loss).
  • During the second quarter of 2022, Stack management increased the value of its position in SpaceX (FNEX Ventures LLC – Series 103) by $1.3 million, reflecting a recent financing closed in May 2022 that valued the company at $127 billion. SpaceX was previously valued at $100 billion, following a stock sale in October 2021. The increase in value was recorded as an unrealized gain in the statements of earnings (loss) and comprehensive income ( loss).

Intellectual Property License Agreement

  • During the second quarter of 2022, the Company entered into a license agreement with the Manager for an indefinite term pursuant to which the Manager granted a non-exclusive, royalty-free license to use the name “Stack”, “Stack Capital” and the brand name Stack logo. Other than this limited license, the Company has no legal rights to “Stack”, the name “Stack Capital” and the Stack mark.

About Stack Capital

Stack Capital is an investment holding company and its business objective is to invest in stocks, debt securities and/or other securities of growth-stage or late-stage private companies. 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 return through a portfolio of high-growth companies, which are not widely accessible to most Canadian investors. SC Partners Ltd. (the “Manager”) has taken the initiative in creating the Company and acts as the director of the Company and is responsible for research and advice in respect of all investments of the Company.

For more information, please visit our website at www.stackcapitalgroup.com or contact:
Brian Viveiros
Vice President, Corporate Development and Investor Relations
647.280.3307
brian@stackcapitalgroup.com

Non-IFRS Financial Measures

This press release may refer to the following financial measures which are not recognized under International Financial Reporting Standards (“IFRS”) and do not have standardized meanings prescribed by IFRS:

  • Book value – the overall fair value of the assets of the Company on the reference date, less the overall book value of the liabilities, excluding deferred taxes where applicable, of the Company; and
  • Book value per share (BVPS) – the book value on the key date divided by the total number of ordinary shares in circulation on that day.

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

Caution Regarding Forward-Looking Information

This press release contains forward-looking information. These forward-looking statements or information are provided for the purpose of providing information about management’s current expectations and plans regarding the future. Readers are cautioned that reliance on this information may not be appropriate for other purposes. Any such forward-looking information can 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 is not limited to, TSX Sandbox exit conditions; and the business of Stack Capital and the risks associated therewith, including those identified in the annual filing under the heading “Risk Factors”.

Forward-looking statements or information are based on a number of factors and assumptions which were used to develop such statements and information, but which may prove to be incorrect. Although Stack Capital believes that any expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on any forward-looking statements as Stack Capital cannot guarantee 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 take advantage of investment opportunities. The forward-looking information contained in this press release reflects Stack Capital’s current expectations, assumptions and/or beliefs 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 required by applicable securities laws, Stack Capital disclaims any intention or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Forward-looking statements or information contained in this press release are expressly qualified by this cautionary statement.

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