Stack Capital Group Inc. Reports Q2-2023 Financial Results

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, 2023. Stack Capital reports all amounts in Canadian Dollars unless otherwise stated.

Company Commentary:

• As at June 30, 2023, Book Value per Share of the Company was $11.17, compared with $11.22 as at March 31, 2023.
• The Company’s cash and collateral position as at June 30, 2023, was $28.1 million or $3.12 per share.
• To date, the Company has completed eight investments contributing $8.12 to the Book Value per Share, as at June 30, 2023, into the following:
  • Prove Identity, Inc. (cyber-security)
  • Newfront Insurance, Inc. (insurance & benefits)
  • Locus Robotics, Inc. (robotics)
  • Omio, Inc. (travel & leisure)
  • SpaceX (space exploration & communications)
  • Bolt Financial, Inc. (e-commerce)
  • Hopper, Inc. (travel & leisure)
  • Varo Money, Inc. (neo-banking)
• Hopper - Stack Capital invested an additional US$2 million in Hopper, Inc., increasing the Company’s overall investment to US$8 million. Hopper has continued to significantly grow ‘Hopper Cloud’, its B2B business, with recent partnerships having been announced with Uber; Nubank, a leading neo bank in Latin America; and CommBank, the largest bank in Australia.
• SpaceX - the launch business has continued to grow along with Starlink (wholly owned subsidiary), where global subscribers reportedly exceed 1.5 million. Earlier this year, SpaceX had a tender offer for secondary shares at a reported valuation of US$137 billion which resulted in an increase of $0.8 million in its fair value during the quarter. Subsequent to the quarter, an additional tender was reportedly offered at a valuation of US$150 billion.
• Locus Robotics - a landmark deal was announced with DHL Supply Chain (“DHL”) (ETR:DPW), the world’s leading logistics provider. Representing the largest autonomous mobile robotics deal in history, DHL will deploy 5,000 Locus robots across its global network of warehouses and distribution centers. During the quarter, other large partnerships were announced with United Drug, Ireland’s largest pharmaceutical distribution company; Savant WMS, a leading provider of cloud-based warehouse management systems; and Concordance Healthcare Solutions LLC, one of the largest, independent healthcare distributors in the United States.
• Prove Identity - during the quarter, Prove announced new large clients including Visa (NYSE:V), a world leader in digital payments; and FanDuel, an industry leader in legalized and regulated sports wagering to provide Prove’s Pre-Fill solution. This solution enables auto-fill in a privacy-enhanced fashion that can reduce account opening time by 80% for the end user.
• The Company announced a normal course issuer bid on November 15, 2022, to buy back its outstanding common shares which it believes to be undervalued. For the six months ended June 30, 2023, 126,600 common shares were repurchased at a weighted average price of $6.10 per share. Since the initiation of the normal course issuer bid to June 30, 2023, 206,400 shares have been repurchased at an average price of $5.99.

“We’re extremely pleased with the growth trajectory across our portfolio companies – highlighted by developments at Hopper, Locus Robotics, Prove Identity, and SpaceX,” said Jeff Parks, CEO of Stack Capital. “Recent activity in the US IPO market indicates that things are slowly beginning to improve; as such, we remain optimistic about the outlook for 2024, along with the potential for some of our companies to be beneficiaries of a revitalized IPO environment.”

Book Value per Share Summary (Q2-2023)

• As at June 30, 2023, the Book Value of the Company was $100.8 million, and the Book Value per Share was $11.17. A detailed summary of Book Value per Share is as follows:

Cash	$	3.12
Investment – Prove Identity, Inc.1		1.24
Investment – Newfront Insurance, Inc.		1.18
Investment – Hopper, Inc.		1.18
Investment – Locus Robotics, Inc.		1.17
Investment – SpaceX (FNEX Ventures LLC – Series 103)		1.10
Investment – Omio, Inc.		1.03
Investment – Bolt Financial, Inc.		0.89
Investment – Varo Money, Inc.		0.33
Other assets and liabilities		(0.07	)
Book Value per Share	$	11.17

1 This includes a deferred gain of $1.1 million for Prove Identity Inc. This was due to an immediate gain in valuation which per IFRS 9 Financial Instruments requires the gain to be deferred and netted against the carrying value.

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 ViveirosVP, Corporate Development, and Investor [e-mail]

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 or unrealized deferred gains or losses 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 and 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 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.