Stack Capital Group Inc. Reports Q3-24 Financial Results

Company Commentary:

• Starlink continues to aggressively expand its global reach, having now crossed over 4 million subscribers. With over 6,400 satellites now in operation, Starlink has made impressive progress in signing airlines to its satellite service – United being the most recent, joining other carriers such as Qatar Airways, Air France, Hawaiian Airlines, Air New Zealand and WestJet, to name a few.
• SpaceX successfully completed its fifth Starship test flight on October 13, 2024, when, for the first time ever, it was able to 'catch' its Super Heavy Booster rocket, safely returning it back to the Starbase launch pad. This represents a significant leap forward in decreasing the cost to bring payload to space and accelerating the pace of growth and quality of the Starlink satellite constellation.
  
• On October 30, 2024, Stack Capital announced the $16.7 million best efforts financing. The transaction provides the Company with additional growth capital to pursue attractive opportunities currently available in growth and late-stage private businesses.
  
• As at September 30, 2024, Book Value per Share (BVpS) of the Company was $11.05, compared with $11.24 as at June 30, 2024. The decrease in BVpS during the quarter was primarily related to a weakening US dollar compared to the Canadian dollar during the quarter. This has since reversed over the past month; applying the October 30, 2024 closing exchange rate, BVpS would increase by approximately $0.29.
  
• Canva announced the acquisition of Leonardo.ai, a generative AI content and research startup. Leonardo's technology will integrate into Canva's Magic Studio generative AI Suite, supercharging its capabilities.
  
• Hopper's B2B business made great strides during the quarter announcing a pair of world-class partnerships. In the case of TripAdvisor and Hopper will now power hotel bookings, provide a source of hotel inventory, along with flexible booking options for U.S. based TripAdvisor app users. The partnership with Japanese-based Sumitomo Mitsui Card Co., Ltd (“SMCC”) – the largest credit card issuer in Japan - involves Hopper creating and powering SMCC's travel loyalty portal, allowing its customers to easily book flights, accommodations, and car rentals.
  
• The underlying private company associated with Defense AI LP signed a significant contract with the US Coast Guard worth approximately US$200 million. As part of the transaction, intelligence, surveillance, and reconnaissance services are being provided via un-manned aircraft systems.
• The Company's cash position as at September 30, 2024, was $10.8 million or $1.17 per share.
  
• To date, the Company has completed ten investments contributing $10.04 per share as at September 30, 2024, into the following:
  
  • SpaceX (space exploration & communications)
  • Locus Robotics, Inc. (robotics)
  • Omio, Inc. (travel & leisure)
  • Canva, Inc. (graphic design)
  • Hopper, Inc. (travel & leisure)
  • Newfront Insurance, Inc. (insurance & benefits)
  • Prove Identity, Inc. (cyber-security)
  • Bolt Financial, Inc. (e-commerce)
  • Varo Money, Inc. (neo-banking)
  • Defence AI LP (military defence)

“We're extremely pleased with the $16.8 million best efforts financing this week,” said Jeff Parks, CEO of Stack Capital.“This additional growth capital will allow Stack to pursue attractive investment opportunities. Looking ahead, we anticipate a return to a more normalized IPO environment in 2025 and beyond, which should benefit high-quality private companies, including some of those held within Stack today. We're encouraged with the continued growth across our portfolio companies and look forward to future liquidity events.”

Q3-2024 Highlights

• As at September 30, 2024, the Book Value of the Company was $101.9 million, and the Book Value per Share was $11.05. A detailed summary of Book Value per Share is as follows:
  

i the Company is invested in Space Exploration Technologies Corp. (“SpaceX”) through a Special Purpose Vehicle, Space LP.
ii the Company invested in shares of GoEuro Corp. which carries on business as Omio.
iii the fair value of Prove Identity Inc. includes an unrealized deferred gain of $958,951.

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 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. 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 or contact:
Brian Viveiros
VP, Corporate Development, and Investor

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.

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