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Stack Capital Group Inc. Interim / Quarterly Report 2025
48133_rns_2025-05-08_1426f2d5-4386-4c76-80e5-3fef57f1ca35.pdf
Interim / Quarterly Report
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Stack Capital Group Inc.
Condensed Consolidated Interim Financial Statements
March 31, 2025
(Expressed in Canadian Dollars, Unaudited)
NOTICE OF NO AUDITOR REVIEW OF CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Under National Instrument 51-102, Part 4, Subsection 4.3(3)(a), if an auditor has not performed a review of Consolidated Interim Financial Statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.
The accompanying unaudited condensed Consolidated Interim Financial Statements of Stack Capital Group Inc. (the "Company") have been prepared by and are the responsibility of the Company's management. The Company's independent auditor has not performed a review of these financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for a review of Consolidated Interim Financial Statements by an entity's auditor.
Stack Capital Group Inc.
Condensed Interim Statements of Financial Position
(Expressed in Canadian Dollars, Unaudited)
| Notes | March 31, 2025 | December 31, 2024 | |
|---|---|---|---|
| Assets | |||
| Cash | $ 10,777,597 | $ 11,259,678 | |
| Restricted Cash | 3 | - | 3,109,489 |
| Investments, at fair value | 4 | 118,379,699 | 117,793,178 |
| Prepaid expenses | 55,736 | 77,331 | |
| Total Assets | $ 129,213,032 | $ 132,239,676 | |
| Liabilities | |||
| Accounts payable and accrued liabilities | 8 | $ 337,996 | $ 360,728 |
| Amounts due to Manager | 8 | 189,145 | 587,152 |
| Derivative liability | - | 773,975 | |
| Total Liabilities | 527,141 | 1,721,855 | |
| Equity | |||
| Share capital | 5 | $ 109,793,590 | $ 109,090,036 |
| Equity reserves | 6,7 | 2,257,906 | 2,362,277 |
| Retained earnings | 16,634,395 | 19,065,508 | |
| Total Equity | 128,685,891 | 130,517,821 | |
| Total Equity and Liabilities | $ 129,213,032 | $ 132,239,676 |
General Information (Note 1)
The accompanying notes are an integral part of these unaudited condensed Consolidated Interim Financial Statements.
Approved on Behalf of the Board:
"Jeffrey Parks, Signed"
Jeffrey Parks, Director
"John Bell, Signed"
John Bell, Director
1
STACK
Stack Capital Group Inc.
Condensed Interim Statements of (Loss) Income and Comprehensive (Loss) Income
(Expressed in Canadian Dollars, Unaudited)
| For the three months ended March 31, | Notes | 2025 | 2024 |
|---|---|---|---|
| Income | |||
| Interest income | $ 114,869 | $ 320,923 | |
| Change in unrealized fair value of investments | 3 | (2,413,035) | - |
| Change in unrealized foreign exchange on investments, at fair value | 3 | (91,930) | 1,913,005 |
| Realized gain on forward currency contract | 837,975 | ||
| $ (1,552,121) | $ 2,233,928 | ||
| Expenses | |||
| Management fees | 6 | 556,388 | 416,309 |
| Professional fees | 6 | 90,908 | 161,670 |
| Insurance | 39,279 | 65,028 | |
| General and administrative | 74,396 | 36,539 | |
| Loss (gain) on foreign exchange | 36,668 | (61,769) | |
| Share-based compensation | 5 | 65,300 | 52,771 |
| $ 862,939 | $ 670,548 | ||
| Net Income (Loss) and Comprehensive Income (Loss) for the Period | $ (2,415,060) | $ 1,563,380 | |
| Basic Earnings (Loss) per Share | $ (0.24) | $ 0.17 | |
| Diluted Earnings (Loss) per Share | $ (0.24) | $ 0.17 | |
| Weighted Average Number of Common Shares Outstanding | |||
| Basic | 9,867,853 | 8,999,478 | |
| Diluted | 9,867,853 | 9,024,704 |
The accompanying notes are an integral part of these unaudited condensed Consolidated Interim Financial Statements.
STACK
Stack Capital Group Inc.
Condensed Interim Statements of Cash Flows
(Expressed in Canadian Dollars, Unaudited)
| For the three months ended March 31, | Notes | 2025 | 2024 |
|---|---|---|---|
| Operating Activities: | |||
| Net Income (loss) and comprehensive income (loss) for the year | $ (2,415,060) | $ 1,563,380 | |
| Changes in non-cash operating items: | |||
| Change in unrealized fair value of investments | 3 | 2,413,035 | - |
| Unrealized gain on forward currency contract | (837,975) | - | |
| Share-based compensation | 5 | 65,300 | 52,771 |
| Change in unrealized foreign exchange on investments, at fair value | 3 | 91,930 | (1,913,005) |
| Loss (gain) on foreign exchange | 36,668 | (61,769) | |
| Interest accrued on investments | - | - | |
| Changes in cash operating items: | |||
| Acquisition of investments, net of share issuance | 3 | (3,091,486) | (10,863,080) |
| Changes in non-cash working capital items: | |||
| Prepaid expenses | 21,596 | 27,823 | |
| Accounts payable and accrued liabilities | 6 | (9,982) | (10,486) |
| Amounts due to Manager | 6 | (44,512) | 154,283 |
| Net Cash Used in Operating Activities | $ (3,770,486) | $ (11,050,083) | |
| Financing activities | |||
| Share repurchase | $ (202,416) | $ (21,217) | |
| Warrant exercise | 418,000 | - | |
| Net Cash Provided (Used) by Financing Activities | $ 215,584 | $ (21,217) | |
| Net Change in Cash | $ (3,554,902) | $ (11,071,300) | |
| Cash and cash equivalents, beginning of period | 14,369,167 | 25,074,005 | |
| Effect of foreign exchange changes | (36,668) | 61,769 | |
| Cash and cash equivalents, end of period | $ 10,777,597 | $ 14,064,474 |
The accompanying notes are an integral part of these unaudited condensed Consolidated Interim Financial Statements.
STACK
Stack Capital Group Inc.
Condensed Interim Statements of Changes in Equity
(Expressed in Canadian Dollars, Unaudited)
| Notes | Common shares (#) | Common shares ($) | Equity Reserves | Retained Earnings (Deficit) | Total | |
|---|---|---|---|---|---|---|
| Balance, December 31, 2023 | 8,951,245 | $ 93,480,730 | $ 7,741,289 | $(4,472,542) | $ 96,749,477 | |
| Share repurchase | (2,600) | (27,153) | 5,936 | (21,217) | ||
| Shares issued for acquisition of investments | 273,501 | 2,469,714 | - | 2,469,714 | ||
| Share-based payments (recovery) | - | - | 1,521 | 1,521 | ||
| Net gain (loss) for the period | - | - | - | 1,563,380 | 1,563,380 | |
| Balance, March 31, 2024 | 9,222,146 | 95,923,291 | 7,742,810 | (2,903,226) | 100,762,875 | |
| Share repurchase | (38,600) | (397,906) | 1,327 | (396,579) | ||
| Share issuance for private placement | 1,246,830 | 13,564,651 | 1,933,368 | - | 13,028,305 | |
| Share based compensation | - | - | 224,723 | - | 226,244 | |
| Warrant expiry | - | - | (7,538,624) | 7,538,624 | - | |
| Net income for the year | - | - | - | 14,428,783 | 15,992,163 | |
| Balance, December 31, 2024 | 10,703,877 | 109,090,036 | 2,362,277 | 19,065,508 | 130,517,821 | |
| Share repurchase | 4 | (18,253) | (186,363) | - | (16,053) | (202,416) |
| Share issuance for private placement | 4 | 34,340 | 375,204 | - | - | 375,204 |
| Share based compensation | 5 | - | - | (7,658) | - | (7,658) |
| Warrant exercise | 4 | 38,000 | 514,713 | (96,713) | - | 418,000 |
| Net income for the year | - | - | - | (2,415,060) | (2,415,060) | |
| Balance, March 31, 2025 | 10,757,964 | 109,793,590 | 2,257,906 | 16,634,395 | 128,685,891 |
The accompanying notes are an integral part of these unaudited condensed Consolidated Interim Financial Statements.
STACK
Stack Capital Group Inc.
Interim Schedule of Investment Portfolio as at March 31, 2025
(Expressed in Canadian Dollars, Unaudited)
Private Investments
| Investments | Investment type | Portfolio weight at period end | Cost | Fair value |
|---|---|---|---|---|
| SpaceX^{i} | Units | 18.25% | $ 6,464,130 | $ 23,485,834 |
| Canva | Common shares | 10.75% | 10,864,716 | 13,832,835 |
| Hopper | Series A-1 Preferred shares | 8.98% | 10,368,105 | 11,561,015 |
| Newfront Insurance | Series D-1 Preferred shares | 8.95% | 10,133,737 | 11,517,199 |
| Locus Robotics | Series F preferred shares | 9.27% | 10,822,368 | 11,928,993 |
| Locus Robotics | Common shares | 1.72% | 2,486,406 | 2,210,283 |
| Coreweave | Common shares | 8.47% | 14,031,932 | 10,901,587 |
| Omio^{ii} | Series E-1 Preferred shares | 7.83% | 9,095,738 | 10,077,475 |
| Omio | Common shares | 1.40% | 952,112 | 1,800,912 |
| Prove Identify^{iii} | Common shares | 4.98% | 6,004,207 | 6,409,227 |
| Prove Identify | Series E-1 Preferred shares | 2.78% | 3,921,236 | 3,579,819 |
| Bolt Financial | Series E-1 Preferred shares | 3.21% | 5,091,044 | 4,131,867 |
| Bolt Financial | Series D Preferred shares | 0.97% | 2,577,092 | 1,249,121 |
| Shield AI^{iv} | Units | 3.28% | 2,778,010 | 4,219,376 |
| Varo Money | Common shares | 1.10% | 6,335,194 | 1,418,464 |
| Other Capitalized Legal Fees | 0.04% | 55,616 | 55,692 | |
| Total | 91.99% | $101,981,643 | $ 118,379,699 | |
| Cash | 8.38% | $ 10,777,597 | ||
| Other assets and liabilities | (0.37%) | (471,405) | ||
| Total | 100.00% | $ 128,685,891 |
i the Company invested in units of Space LP which is primarily invested into Space Exploration Technologies Corp. ("SpaceX")
ii the Company invested in shares of GoEuro Corp. which does business as Omio.
iii the fair value of Prove Identity Inc. common shares is net of an unrealized deferred gain of $1,021,025. Refer to Note 3 vii).
STACK
Stack Capital Group Inc.
Notes to the Condensed Consolidated Interim Financial Statements
For the Three Months Ended March 31, 2025
(Expressed in Canadian Dollars, Unaudited)
1. General Information
Stack Capital Group Inc. (the "Company") is an investment holding company. Its business objective is to invest in equity, debt and/or other securities of growth-to-late-stage private businesses. On June 16, 2021, the Company completed its initial public offering, at which time, the Company's common shares commenced trading on the Toronto Stock Exchange ("TSX") under the symbol "STCK". 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.
The Company is federally incorporated and domiciled in Ontario, Canada. The registered office of the Company and the Manager is located at 155 Wellington St. W, Suite 3140, Toronto, ON, M5V 3H1.
The unaudited condensed Consolidated Interim Financial Statements were approved by the Company's Board of Directors on May 7, 2025, for issuance on May 8, 2025.
2. Basis of Presentation, Significant Accounting Policies, and Use of Estimates and Judgments
The unaudited consolidated condensed interim financial statements of the Company were prepared in accordance with the IFRS® Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") 34 Interim Financial Reporting. The unaudited condensed consolidated interim statements of financial position of the Company are presented on a non-classified basis. Except for Investments, all other assets expected to be realized and liabilities expected to be settled within the Company's normal operating cycle of one year are considered current.
The accounting policies and methods of application in these unaudited condensed Consolidated Interim Financial Statements, including comparatives, are consistent with those used in the Company's audited annual financial statements for the year ended December 31, 2024, and should be read in conjunction with those statements.
The preparation of unaudited condensed Consolidated Interim Financial Statements in conformity with IFRS requires the Company's management to make judgments, estimates and assumptions about the carrying amount of its assets and liabilities that are not readily apparent from other sources. On an ongoing basis, management reviews these estimates, which are based on its best knowledge of current events and actions the Company may undertake in the future. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results. The judgements, estimates and assumptions applied in the condensed Consolidated Interim Financial Statements, including the key sources of estimation uncertainty, were the same as those applied in the Company's last audited annual financial statements for the year ended December 31, 2024. There have been no significant changes to the areas of estimation and judgment during the three months ended March 31, 2025.
STACK
Stack Capital Group Inc.
Notes to the Condensed Interim Financial Statements
For the Three Months Ended March 31, 2025
(Expressed in Canadian Dollars, Unaudited)
3. Investments, at Fair Value
A summary of changes in the fair value of the Company's investments the year ended December 31, 2024 is as follows:
| Investments | Investment type | Balance as of January 1, 2024 | Additions | Unrealized Gain (Loss) on Investments | Unrealized Foreign Currency Gains | Balance as of December 31, 2024 |
|---|---|---|---|---|---|---|
| SpaceX^{1} | Units | $ 12,009,093 | $ - | $ 9,940,531 | $ 1,557,448 | $ 23,507,072 |
| Canva^{2} | Common shares | 18,878 | 10,845,838 | 2,192,662 | 787,966 | 13,845,344 |
| Locus Robotics^{3} | Series F preferred shares | 10,585,498 | - | 403,132 | 951,149 | 11,939,780 |
| Locus Robotics^{3} | Common shares | - | 2,486,406 | (402,606) | 128,468 | 2,212,269 |
| Hopper^{4} | Series A-1 Preferred shares | 10,636,198 | - | - | 935,271 | 11,571,469 |
| Newfront^{v} | Series D-1 Preferred shares | 10,595,887 | - | - | 931,727 | 11,527,614 |
| Coreweave^{v} | Common shares | - | 10,953,718 | - | 297,391 | 11,251,110 |
| Omio^{v} | Series E-1 Preferred shares | 9,271,333 | - | - | 815,255 | 10,086,588 |
| Omio^{v} | Common shares | 1,656,849 | - | - | 145,691 | 1,802,541 |
| Prove Identity^{v} | Common shares | 5,898,262 | - | - | 516,741 | 6,415,003 |
| Prove Identity^{v} | Series E-1 Preferred shares | 3,293,455 | - | - | 289,603 | 3,583,058 |
| Bolt Financial^{5} | Series E-1 Preferred shares | 3,291,522 | - | 528,011 | 316,069 | 4,135,603 |
| Bolt Financial^{5} | Series D Preferred shares | 1,651,990 | 8,287 | (529,544) | 119,517 | 1,250,251 |
| Shield AI^{6} | Units | - | 2,778,010 | - | 111,253 | 3,189,990 |
| Varo Money^{v} | Common shares | 2,943,551 | - | (1,697,032) | 173,228 | 1,419,747 |
| Other capitalized legal fees | - | 55,616 | - | 126 | 55,742 | |
| Total | $ 71,852,516 | $ 27,127,875 | $ 10,435,155 | $ 8,076,903 | $ 117,793,178 |
A summary of changes in the fair value of the Company's investments for the period ended March 31, 2025 is as follows:
| Investments | Investment type | Balance as of January 1, 2025 | Additions | Unrealized Gain (Loss) on Investments | Unrealized Foreign Currency Gains | Balance as of March 31, 2025 |
|---|---|---|---|---|---|---|
| SpaceX^{1} | Units | $ 23,507,072 | $ - | $ - | $ (21,238) | $ 23,485,834 |
| Canva^{2} | Common shares | 13,845,344 | - | - | (12,509) | 13,832,835 |
| Locus Robotics^{3} | Series F preferred shares | 11,939,780 | - | - | (10,787) | 11,928,993 |
| Locus Robotics^{3} | Common shares | 2,212,269 | - | - | (1,985) | 2,210,283 |
| Hopper^{4} | Series A-1 Preferred shares | 11,571,469 | - | - | (10,454) | 11,561,015 |
| Newfront^{v} | Series D-1 Preferred shares | 11,527,614 | - | - | (10,415) | 11,517,199 |
| Coreweave^{v} | Common shares | 11,251,110 | 3,091,486 | (3,446,013) | 5,004 | 10,901,587 |
| Omio^{v} | Series E-1 Preferred shares | 10,086,588 | - | - | (9,113) | 10,077,475 |
| Omio^{v} | Common shares | 1,802,541 | - | - | (1,629) | 1,800,912 |
| Prove Identity^{v} | Common shares | 6,415,003 | - | - | (5,776) | 6,409,227 |
| Prove Identity^{v} | Series E-1 Preferred shares | 3,583,058 | - | - | (3,237) | 3,579,819 |
| Bolt Financial^{5} | Series E-1 Preferred shares | 4,135,603 | - | - | (3,736) | 4,131,867 |
| Bolt Financial^{5} | Series D Preferred shares | 1,250,251 | - | - | (1,130) | 1,249,121 |
| Shield AI^{6} | Units | 3,189,990 | - | 1,032,978 | (3,592) | 4,219,376 |
| Varo Money^{v} | Common shares | 1,419,747 | - | - | (1,283) | 1,418,464 |
| Other capitalized legal fees | 55,742 | - | - | (50) | 55,692 | |
| Total | $ 117,793,178 | $ 3,091,486 | $ (2,413,035) | $ (91,930) | $ 118,379,699 |
- The fair value of Prove Identity Inc. common shares is net of an unrealized deferred Day 1 gain of $1,021,025. Refer to Note 3 viii).
STACK
Stack Capital Group Inc.
Notes to the Condensed Interim Financial Statements
For the Three Months Ended March 31, 2025
(Expressed in Canadian Dollars, Unaudited)
3. Investments, at Fair Value (Continued)
i) Space LP is a special purpose vehicle, which is wholly owned and controlled by the Company, it is invested in shares of Space Exploration Technologies Corp. ("SpaceX"). Substantially all of Space LP's value is derived from SpaceX. SpaceX, based in Hawthorne, California, is a designer and provider of space transportation services, as well as a satellite communications provider through its Starlink brand.
The Company invested $6,464,130 (US$5,000,000) in limited partnership units in SpaceX SPV during 2021. SpaceX completed an offering in Q4-2024 which valued SpaceX at US$350 billion. Management updated their valuation in SpaceX SPV during the year ended December 31, 2024 to reflect the changes in value relevant to this offering. As at March 31, 2025, management has based the valuation in SpaceX SPV based on the recent market transactions resulting in a fair value of $23,485,834 (December 31, 2024: $23,507,072).
ii) Canva, Inc. ("Canva"), based in Sydney, Australia, Canva is a graphic design platform that's used for creating visual content, presentations, posters, and documents. During the quarter ended March 31, 2024, the company invested $10,845,838 (US$8,007,183) in common shares of Canva. In Q4-2024 Canva completed an offering which valued Canva at US$32 billion. As at March 31, 2025, management has determined that the transaction price is representative of a fair value of $13,832,835 (December 31 2024: $13,845,344).
iii) Locus Robotics Corp. ("Locus"), headquartered in Wilmington, Massachusetts, is a provider of enterprise robotics solutions for some of the world's most dynamic warehouses and leading brands operating in third-party logistics, retail & e-commerce, healthcare, and the industrial sectors. During the year ended December 31, 2022, the Company invested $10,822,368 (US$8,003,552) in Series F preferred shares of Locus. Additionally, during the quarter ended March 31, 2024, the Company purchased $2,469,714 in common shares of Locus in share swap for 273,501 shares of Stack Capital Group Inc. The transaction took place on March 4, 2024, therefore the share swap was priced at the closing price of the Company's shares as at March 3, 2024 of $9.03. As at March 31, 2025, management has determined that the transaction price of the series F preferred shares and the common shares is representative of fair value of $11,928,993 and $2,210,283 respectively (December 31, 2024: $11,939,780 series F preferred shares and $2,212,269 common shares).
iv) Hopper Inc. ("Hopper"), based in Montreal, Quebec, is an AI-powered and mobile focused online travel agency, specializing in hotels, flights, car rentals and homes. During the first quarter ended March 31, 2022, the Company invested $7,656,901 (US$6,020,385) in Class A-1 preferred shares of Hopper. During the second quarter ended June 30, 2023 additional Class A-1 preferred shares were purchased for $2,711,204 (US$2,021,500). As at March 31, 2025, management has determined that the recent transaction price is representative of fair value of $11,561,015 (December 31, 2024: $11,571,469).
v) Newfront Insurance Holdings, Inc. ("Newfront"), based in Sacramento, California, is an insurance brokerage focused on leveraging technology intended to assist large businesses in purchasing insurance packages based on insight-based recommendations. During the quarter ended June 30, 2022, the Company invested $10,133,737 (US$8,011,407) in Series D-1 preferred shares of Newfront. As at March 31, 2025, management has determined that the recent transaction price is representative of fair value of $11,517,199 (December 31, 2024: 11,527,614).
vi) Coreweave, Inc. ("Coreweave"), headquartered in Roseland, New Jersey, specializes in providing cloud-based graphics processing unit (GPU) infrastructure to artificial intelligence developers. During the year ended December 31, 2024 the company invested $10,953,718 (US$7,819,244). During the quarter ended March 31, 2024, purchased common shares of Coreweave, Inc. for consideration of US$2,161,000. US$1,161,000 is related to an investment was made directly by the Company into Coreweave. An additional investment of US$1,000,000 was made through Stack CW LP, a special purpose vehicle wholly invested in Coreweave, Inc. On March 28, 2025 Coreweave went public on the NASDAQ under the ticker: CRWV. As at March 31, 2025, management has deferred the trading price is representative of fair value of $10,901,584 (December 31, 2024: $11,251,110). As Coreweave is now a publicly traded entity, this is now a Level 1 investment (see note 7).
STACK
Stack Capital Group Inc.
Notes to the Condensed Interim Financial Statements
For the Three Months Ended March 31, 2025
(Expressed in Canadian Dollars, Unaudited)
3. Investments, at Fair Value (Continued)
vii) GoEuro Corp. (known as "Omio"), headquartered in Berlin, Germany and domiciled in the United States, is an operator of a multi-modal travel booking platform intended to help travellers in Europe, the United States and Canada to compare, plan and book trains, buses, ferries, and flights. During the quarter ended June 30, 2022, the Company invested $9,095,738 (US$7,009,929) in Series E-1 preferred shares of Omio. During the quarter ended September 30, 2023, the Company also invested $953,258 (US$704,225) in common shares of Omio. As at March 31, 2025, management has determined that the most recent transaction price is representative of fair value of $10,077,475 and $1,800,912 for preferred shares and common shares, respectively (December 31, 2024: $10,086,588 preferred shares, $1,802,541 common shares).
viii) Prove Identity Inc. ("Prove"), based in New York City, New York, is a software developer of identity-verification software designed to protect against identity theft and social engineering attacks from professional attackers.
In 2021, the Company invested $1,083,556 (US$822,500) and $3,921,236 (US$3,060,106) in common shares and Series E-1 preferred shares of Prove, respectively, in two market transactions. During the quarter ended June 30, 2022 the Company acquired additional common shares for $2,761,603 (US$2,137,238). During the quarter ended September 30, 2022, the Company acquired additional common shares of Prove in a private transaction with a motivated seller for a combination of 139,440 common shares of the Company valued at 1,020,639 (US$782,012) and $1,116,689 (US$855,605) in cash. In addition, during the quarter ended December 31, 2022, the Company acquired additional common shares of Prove in a private transaction for $135,220 (US$100,000) in cash. On initial recognition, the fair value of the acquired common shares of Prove was estimated at $3,429,818. Given the nature of the private transaction, the fair value of acquired common shares exceeded the transaction price of $2,272,548 by $1,157,270. Following the IFRS 9 Financial Instruments requirements, this difference, referred hereafter as Day 1 gain, was deferred on the Consolidated Statements of Financial Position as the fair value of Prove is determined using the valuation technique that includes unobservable (L3) inputs. The carrying value of common shares on the Consolidated Statements of Financial Position is net of the unrealized deferred Day 1 gain, revalued at to be $1,021,025 (December 31 2024: $1,021,949).
As at March 31, 2025, the Company estimated the fair value of Prove based on recent market transaction data, and the common shares and Series E-1 Preferred shares of Prove had a fair value of $6,409,227 and $3,579,819, respectively (December 31, 2024: $6,415,003 common shares and $3,583,058 series E-1 preferred shares).
ix) Bolt Financial Inc. ("Bolt"), based in San Francisco, California, is a software developer of a one-click checkout process and fraud protection for online retailers. During 2021, the Company invested $2,568,361 (US$2,013,986) in Series D preferred shares and $5,091,044 (US$4,031,233) in convertible debentures of Bolt.
The fair value of the Bolt's Series E-1 and Series D preferred shares as at March 31, 2025 was $4,131,867 and $1,249,121 (December 31, 2023: $4,135,603 and $1,250,251), respectively.
x) Defence AI LP, a special purpose vehicle ("SPV"), that holds an investment in Shield AI. Shield AI is an American aerospace and defense technology company based in San Diego, California. It develops artificial intelligence-powered fighter pilots, drones, and technology for defense operations. During the year ended December 31, 2024 the Company invested $2,778,010 (US$2,000,000). The instrument entitles the Company an annual interest rate of 13.74% paid in kind and an equity fee paid in common shares of the military defence company that will range from 30.4% to 42.8% depending on time until a liquidity event. There is no end of term for this investment. The fair value as at March 31, 2025 was $4,219,376 (December 31, 2024: 3,189,990)
xi) Varo Money, Inc. ("Varo"), based in San Francisco, California, is the first all-digital bank in the United States to secure a national bank charter allowing it to offer more products, including loans, to its clients. During 2021, the Company invested $6,335,194 (US$5,062,126) in common shares of Varo. The fair value of Varo as at March 31, 2025 was $1,418,464 (December 31, 2024: $1,419,747)
STACK
Stack Capital Group Inc.
Notes to the Condensed Interim Financial Statements
For the Three Months Ended March 31, 2025
(Expressed in Canadian Dollars, Unaudited)
4. Share Capital and Equity Reserves
a. Authorized Share Capital
As at March 31, 2025, the authorized share capital consisted of an unlimited number of common shares.
b. Common Shares Issued
As at March 31, 2025, the issued share capital was as follows:
| Number of Common Shares | Amount | |
|---|---|---|
| Balance, December 31, 2023 | 8,951,245 | $ 93,480,730 |
| Share repurchase | (2,600) | (27,153) |
| Shares issued for acquisition of investments | 273,501 | 2,469,714 |
| Balance, March 31, 2024 | 9,222,146 | $ 95,923,291 |
| Share repurchase | (38,600) | (397,906) |
| Share issuance for private placement | 1,246,830 | 13,564,651 |
| Balance, December 31, 2024 | 10,703,877 | $ 109,090,036 |
| Share repurchase^{i} | (18,253) | (186,363) |
| Warrant exercise^{ii} | 38,000 | 514,713 |
| Share issuance private placement^{iii} | 34,340 | 375,204 |
| Balance, March 31, 2025 | 10,757,964 | $ 109,793,590 |
i) For the period ended March 31, 2025, the Company repurchased and cancelled a total of 18,253 (2024: 41,200) common shares for $202,416 (2024: 417,796).
ii) During the quarter ended March 31, 2025, 38,000 warrants were exercised for common shares.
iii) For the period, the company issued 34,340 common shares. The Company issued 2,160 common shares, after the related RSU's fully vested in period (see note 5). The shares were issued at an average price of $11.50, for $24,840. The company also issued 32,180 common shares in Q1'25 related to the private placement incurred for the 2024 year end for 353,755.
c. Warrants
The following table reflects the continuity of warrants for the years ended December 31, 2024 to March 31, 2025:
| Number of Warrants | Amount | |
|---|---|---|
| Balance, December 31, 2023, and March 31, 2024 | 4,913,167 | $ 7,538,624 |
| Expired | (4,913,167) | $ (7,538,624) |
| Issued | 757,953 | $ 1,933,368 |
| Balance December 31, 2024 | 757,953 | $ 1,933,368 |
| Exercise | (38,000) | (96,712) |
| Balance, March 31, 2025 | 719,948 | 1,836,655 |
The following table reflects the warrants outstanding and exercisable as of March 31, 2025:
| Expiry Date | Exercise Price ($) | Weighted Average Remaining Contractual Life (Years) | Number of Warrants Outstanding and Exercisable |
|---|---|---|---|
| October 30, 2027 | 11.00 | 2.58 | 680,918 |
| November 22, 2027 | 11.00 | 2.64 | 39,030 |
10
STACK
Stack Capital Group Inc.
Notes to the Condensed Interim Financial Statements
For the Three Months Ended March 31, 2025
(Expressed in Canadian Dollars, Unaudited)
4. Share Capital and Equity Reserves (Continued)
d. Capital Management
The Company actively manages capital to maintain a strong and efficient capital base to maximize risk-adjusted returns to shareholders and to invest in future growth opportunities, while ensuring there is available capital to fund the Company's operation. The Company's capital consists of share capital and warrants.
5. Long-term Incentive Plan
The Company has a long-term incentive plan ("LTIP"), which was approved by shareholders on May 18, 2022 at the annual and special general meeting of shareholders. The LTIP will facilitate the granting of stock options, restricted share units ("RSUs"), performance share units ("PSUs"), and deferred share units ("DSUs"), representing the right to receive one Common Share of the Company in accordance with the terms of the LTIP. The LTIP is not intended to be granted to the founders of the Company and the Manager. As per the terms of the LTIP, the maximum aggregate number of Common Shares reserved for issuance under the LTIP shall not exceed a combined total of 10% of the Company's issued and outstanding Common Shares.
a. Options
During the year ended December 31, 2023, the Company granted 3,750 stock options with a weighted average exercise price of $7.00. All outstanding stock options vest and become exercisable over a period not exceeding five years (time vesting) from the date of grant. Additionally, during the year ended December 31, 2024, the Company granted 4,002 stock options with a weight average exercise price of $10.00. All outstanding stock options vest and become exercisable over a period not exceeding five years (time vesting) from the date of grant. The estimated weighted average grant date fair value for these grants was $8.55 per stock option, as determined using the Black-Scholes valuation model and the following assumptions: risk free interest rate – 3.940%, expected life in years 0 - 5 years, expected volatility – 37.50%, expected dividend – 0% and expected forfeiture – 0%.
The following table reflects the options outstanding as of March 31, 2025:
| Expiry Date | Exercise Price ($) | Weighted Average Remaining Contractual Life (Years) | Number of Options Issued and Outstanding | Number of Exercisable options |
|---|---|---|---|---|
| September 6, 2028 | 7.00 | 3.44 | 3,750 | 1,250 |
| November 1, 2029 | 10.00 | 4.60 | 4,002 | - |
| Total | 7,752 | 1,250 |
b. Deferred Stock Units
During the year ended December 31, 2023, the Company granted 25,217 DSUs to directors with a weighted average cost of $7.96. Additionally, during the year ended December 31, 2024 the Company granted 17,811 DSUs to directors with a weighted average cost of $11.51. The Company has a total pool of 150,000 DSUs that can be issued in aggregate, as of March 31, 2025, the company has 106,972 DSUs remaining that can be issued. As of March 31, 2025 no shares have been released in share capital.
c. Restricted Stock Units
The Company has a pool of 25,000 RSUs that can be issued in aggregate. During the year ended December 31, 2024 the Company issued 2,160 RSU's for consulting services with a six month vesting period, these shares vested on February 28, 2025 and were released into share capital. On March 1, 2025 and additional 2,098 RSUs were issued for consulting services also with a six month vesting period, and will be released into share capital in August 2025.
STACK
Stack Capital Group Inc.
Notes to the Condensed Interim Financial Statements
For the Three Months Ended March 31, 2025
(Expressed in Canadian Dollars, Unaudited)
6. Related Party Transactions
During the period ended March 31, 2025, the Company incurred $632,638 (March 31, 2024: $492,559) to related parties consisting of director fees of $76,250 (March 31, 2024: $76,250) and management fees of $556,388 (March 31, 2024: $416,309) pursuant to the Management Agreement. In addition, included in general and administrative expenses are $21,000 (March 31, 2024: $19,250) reimbursed to the Manager for accounting and administrative services provided by an employee of the Manager.
As at March 31, 2025, included in accounts payable and accrued liabilities are $76,250 (2024: $76,250) pertaining to director fees. Included in amounts due to Manager are $189,145 (2024: $301,414) which include management fees of $182,145 related to the months of March (March 31, 2024: $282,164) and $7,000 (March 31, 2024: $19,250) for expenses reimbursed to the Manager.
Management Agreement
At the time of the Company's initial public offering on June 16, 2021, the Company entered into a Management Agreement with the Manager to provide administration and investment services to the Company (the "Management Agreement"). As compensation for the provision of the services to be provided to the Company by the Manager, the Company will pay the management fee and, if applicable, the performance fee, in each case, together with any applicable sales taxes thereon, to the Manager. The management fee is a monthly amount equal to 1/12 of 1.5% of the total assets less the total liabilities, excluding any deferred taxes, plus any sales taxes thereon (defined in the Management Agreement as "Book Value").
The performance fee is 15% of the Book Value on a per share basis using the time-weighted average common shares outstanding (defined in the Management Agreement as "Book Value per Share") that exceeds the amount of Book Value per Share at any time which must be achieved before any performance fee would be payable. This amount of Book Value per Share is sometimes referred to as the "High Watermark." The performance fee is calculated and paid for after the Company's year-end results have been filed each calendar year. The performance fee will be payable in cash, or at the option of the Manager, in Common Shares of the Company. For the period ended March 31, 2025, there was no performance fee (March 31, 2024: nil) incurred to the Manager.
7. Financial Instruments
a. Fair Value Estimation
The carrying value of cash, and accounts payable and accrued liabilities, approximate their fair values due to the relatively short-term maturities of these financial instruments. The three levels of the fair value hierarchy are described below:
Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2 – Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly; and
Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
STACK
Stack Capital Group Inc.
Notes to the Condensed Interim Financial Statements
For the Three Months Ended March 31, 2025
(Expressed in Canadian Dollars, Unaudited)
7. Financial Instruments
a. Fair Value Estimate (Continued)
The following table presents the Company's assets and liabilities that are measured at fair value as at March 31, 2025:
| Level 1 | Level 2 | Level 3 | Total | |
|---|---|---|---|---|
| Assets | ||||
| Financial assets at fair value through profit or loss | ||||
| Cash and restricted cash | $ 10,777,597 | $ - | $ - | $ 10,777,597 |
| Investments, at fair value | 10,901,587 | - | 107,478,112 | 118,379,699 |
| Total Net Financial assets | $ 21,679,184 | $ - | $107,478,112 | $ 129,157,296 |
The following table presents the Company's assets and liabilities that are measured at fair value as at December 31, 2024:
| Level 1 | Level 2 | Level 3 | Total | |
|---|---|---|---|---|
| Assets | ||||
| Financial assets at fair value through profit or loss | ||||
| Cash and restricted cash | $ 14,369,165 | $ - | $ - | $ 14,369,167 |
| Investments, at fair value | - | - | 117,793,178 | 117,793,178 |
| Liabilities | ||||
| Financial liabilities at fair value through profit or loss | ||||
| Forward foreign currency contract | - | (773,975) | - | (773,975) |
| Total Net Financial assets | $ 14,369,165 | $ (773,975) | $117,974,234 | $ 131,388,370 |
The fair value of financial instruments traded in active markets is determined using the quoted prices where they represent those at which regularly and recently occurring transactions take place.
Level 1 instrument includes cash deposit in Canadian chartered banks, and investment in Coreweave publicly listed on the NASDAQ under the ticker CRWV.
Level 2 instrument includes forward foreign currency contract. The Company's foreign currency forward contracts are valued using standard calculations/models that are primarily based on observable inputs, such as foreign currency exchange rates, or can be corroborated by observable market data.
Level 3 instrument includes investments measured at fair value. The fair values of private investments cannot be derived from an active market and accordingly, are determined using industry accepted valuation techniques and models. Market observable inputs are used where possible, with unobservable inputs used where necessary. Use of unobservable inputs can involve significant judgment and may materially affect the reported fair value of these investments. The Company's investments are focused on private issuers which may have unobservable inputs.
STACK
Stack Capital Group Inc.
Notes to the Condensed Interim Financial Statements
For the Three Months Ended March 31, 2025
(Expressed in Canadian Dollars, Unaudited)
7. Financial Instruments
a. Fair Value Estimate (Continued)
The following table presents changes in level 3 instruments for the period ended March 31, 2025.
| Amount | |
|---|---|
| Balance, December 31, 2023 | $ 71,852,516 |
| Purchases | 27,428,603 |
| Unrealized gain on investments | 10,435,155 |
| Unrealized foreign exchange gain on investments, at fair value | 8,076,903 |
| Balance, December 31, 2024 | $ 117,793,178 |
| Purchases | 3,091,486 |
| Unrealized loss on investments | (2,413,035) |
| Unrealized foreign exchange loss on investments, at fair value | (91,930) |
| Transfers out of level 3¹ | (10,901,587) |
| Balance, March 31, 2025 | $ 107,478,112 |
¹ Coreweave, went public on March 28, 2025 on the NASDAQ, as this investment is now a listed investment on an active stock exchange it is now classified as a level 1 financial asset
Coreweave valued at $10,901,587 (2024: nil) was transferred into level 1 from level 3 during the period ended March 31, 2025.
b. Financial Risk Factors
The Company's activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. In the NICB
of business, the Company manages these risks as they arise as a result of its use of financial instruments.
Market Risk
Market risk is the risk of a financial loss resulting from adverse changes in underlying market factors, such as foreign exchange rate, interest rates, and equity and commodity prices.
i) Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument or another asset or liability will fluctuate due to changes in exchange rates.
As at March 31, 2025, some of cash and substantially all of the Company's investments, at fair value are denominated in U.S. dollars. The impact of fluctuations in foreign currency on cash and investments are primarily subject to fluctuations between the U.S. dollar and the Canadian dollar. A 10% change in the value of the Canadian dollar relative to the U.S. dollar would affect the value of cash and investments as at March 31, 2025 by approximately $12,217,000 (December 31, 2024: $12,300,100).
The Company uses forward foreign currency contract to manage foreign currency risk relating to foreign exchange rates. The Company does not use these instruments for speculative or trading purposes. The Company's objective is to reduce the risk to earnings and cash flows associated with changes in foreign currency exchange rates.
STACK
Stack Capital Group Inc.
Notes to the Condensed Interim Financial Statements
For the Three Months Ended March 31, 2025
(Expressed in Canadian Dollars, Unaudited)
- Financial Instruments (Continued)
b. Financial Risk Factors (Continued)
Market Risk (Continued)
ii) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. Typically, as interest rates rise, the fair values of fixed income investments decline and, conversely, as interest rates decline, the fair values of fixed income investments rise. In each case, the longer the maturity of the financial instrument, the greater the consequence of a change in interest rates.
The Company has exposure to the risk related to changes in interest rates on its cash balances. The Company does not have outstanding debt and does not have exposure to interest rate risk related to this for the period ended March 31, 2025 and December 31, 2024.
iii) Price Risk
Price risk is the risk that the fair value or future cash flows of an equity investment or limited partnership investment will fluctuate due to changes in market prices (other than those arising from interest rate risk or foreign currency risk), whether those changes are caused by factors specific to the individual investment or its issuer, or other factors affecting all similar investments in the market.
The Company is not exposed to commodity price risk. The Company is exposed to equity securities price risk on investments. The Company's investments that have price risk include investments in private issuers of $118,379,699 as at March 31, 2025 (December 31, 2024: $117,793,178). The effect of a 10% decline or increase in the value of investments would affect the value of investments as at March 31, 2025 by approximately US$8,234,160 (December 31, 2024: US$8,186,000).
Credit Risk
Credit risk is the risk of loss resulting from the failure of a counterparty to honour its financial obligations to the company and arises predominantly with respect to cash and cash equivalents, restricted cash deposits, term deposits, short term investments and investments in debt instruments.
The Company is exposed to credit risk, which is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company has no debt outstanding, and the credit risk is considered limited. The Company's only exposure to variable rates is with the interest derived from its bank balance.
Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Company manages liquidity risk by maintaining sufficient liquid assets to enable settlement of financial commitments on their respective due dates. All accounts payable and accrued liabilities are due within three months, and income taxes payable must be remitted to the tax jurisdiction as they are due. There were no significant changes to the Company's exposure to liquidity risk or the framework used to monitor, evaluate and manage liquidity risk as at March 31, 2025.
The undeployed cash and investments at March 31, 2025 provide adequate liquidity to meet the Company's remaining known significant commitments over the next twelve months, which are principally comprised of the management fees and operating expenses. The Company has adequate working capital to support its operations.
As at March 31, 2025, there were no performance fee obligations (March 31, 2024: $Nil) (Note 6).
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