Investment
Flow Capital Announces the Buyout of Its Investment in Wedge Networks, Inc. and a Normal Course Issuer Bid for Common Shares – GlobeNewswire
TORONTO, Dec. 24, 2020 (GLOBE NEWSWIRE) — Flow Capital Corp. (TSXV: FW) (“Flow Capital” or the “Company”) is announcing that Wedge Networks, Inc. (“Wedge”) has completed a buyout of Flow Capital’s royalty investment for $1,250,000.
“The team at Wedge has developed a compelling solution to address cyber security threats. With the increased dependence on telecommuting, due to the ongoing pandemic, and a global digital cold war, safeguards against such threats have become even more critical. Flow Capital is glad to have participated in their growth, and we wish them well,” said Alex Baluta, CEO, Flow Capital.
“Partnering with Flow has been very important to Wedge. Alex and his team at Flow demonstrated an ability to understand the capabilities of our innovations and to visualize the potential of our solutions. The past twelve months have been nothing like anyone had anticipated. Working with Flow has enabled Wedge to transition through an unforeseeable period of global dislocation, brought on by the global pandemic, and to position itself for growth,” stated Rob Fong, Chief Operating Officer and CFO, Wedge Networks, Inc.
The Company also announces today its intention to commence a normal course issuer bid through the facilities of the TSX Venture Exchange (the “TSXV”) to repurchase, for cancellation, up to 2,548,000 common shares of the Company, representing approximately 7.92% of the Company’s presently issued and outstanding common shares (the “NCIB”). The NCIB remains subject to the final approval of the TSXV.
The NCIB will commence on December 30, 2020 and will terminate upon the earliest of (i) the Company purchasing 2,548,000 common shares, (ii) the Company providing notice of termination of the NCIB, and (iii) December 29, 2021.
The Company believes that, from time to time, the market price of its common shares does not adequately reflect the Company’s underlying value and future prospects and that, at such times, the purchase of the Company’s common shares represents an appropriate use of the Company’s financial resources and will enhance shareholder value.
The Company has engaged Hampton Securities Ltd. to act as its broker for the NCIB (the “Broker”). The NCIB will be made through the facilities of the TSXV and the purchase and payment for the common shares, will be made in accordance with TSXV requirements at the market price of the applicable securities at the time of acquisition, plus brokerage fees, if any, charged by the Broker. All securities purchased by the Company under the NCIB will be cancelled.
The Company may enter into a pre-defined plan with the Broker to allow for the purchase of securities by the Company under the NCIB at times when it ordinarily would not be active in the market due to internal trading blackout periods.
To the Company’s knowledge, none of the directors, senior officers or insiders of the Company, or any associate of such person, or any associate or affiliate of the Company, has any present intention to sell any securities to the Company during the course of the NCIB. The Company completed i) a normal course issuer bid on December 23, 2019, where the Company purchased 1,548,250 common shares at an average price of $0.28505 per share, for an aggregate purchase price of $441,334; ii) a normal course issuer bid on August 1, 2019, where the Company purchased 4,334,500 common shares at an average price of $0.126628 per share, for an aggregate purchase price of $548,847 and iii) a substantial issuer bid on October 17, 2019, where 5,708,090 common shares at a price of $0.20 per share were purchased by the Company, for an aggregate purchase price of $1,141,618.
A copy of each Form 5G – Notice of Intention to make a Normal Course Issuer Bid filed by the Company with the TSXV in respect of the NCIBs can be obtained from the Company upon request without charge.
About Flow Capital
Flow Capital Corp. is a diversified alternative asset investor, specializing in providing minimally dilutive capital to high-growth businesses. To apply for financing, visit www.flowcap.com.
For further information, please contact:
Flow Capital Corp.
Alex Baluta
Chief Executive Officer
alex@flowcap.com
1 Adelaide Street East, Suite 3002,
PO Box 171,
Toronto, Ontario M5C 2V9
About Wedge Networks
Wedge Networks, Inc. is a Real-Time Threat Prevention solutions company. Its innovative technology platform, Wedge Absolute Real-time Protection (WedgeARP™), is a software defined orchestrated network security system. WedgeARP™ provides network-based, real-time threat protection for all types of endpoints in a wide range of networks (mobile data, 5G, SD-WAN, SASE, and smart-city/IIoT). Deployed via the cloud, on premises, in data centers or in a virtualized environment by enterprises, governments, and managed security service providers, WedgeARP™ inspects, detects, and blocks in real-time, malware and cyber threats (known, unknown and customized). Wedge does this through its portfolio of patented and patent-pending innovations, including Deep Content Inspection (DCI) technologies embedded with artificial intelligence and industry best-of-breed security functions. WedgeARP™ is a highly effective, flexible and autonomous approach to enable real-time threat prevention across the entire spectrum of scale – serving SMBs to mega organizations – protecting over 100 million endpoints in 17 countries.
Awarded a Gartner Cool Vendor designation, and twice bestowed with Build-In-Canada Innovation awards, Wedge Networks is headquartered in Calgary, Canada with international teams in the North America, Asia Pacific, and the Middle East and North Africa regions.
For more information on Wedge Networks, visit http://www.wedgenetworks.com/
Please forward any media or PR inquiries to: PR@wedgenetworks.com
Forward-Looking Information and Statements
This press release contains certain “forward-looking information” and “forward-looking statements” within the meaning of applicable securities legislation. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only Flow Capital’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Flow Capital’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. By identifying such information and statements in this manner, Flow Capital is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such information and statements. Forward-looking information in this press release includes, but is not limited to, the quantum and timing of payments to be made by Flow Capital under the terms of the Transaction and the expected cash balance of Flow Capital following the completion of the Transaction.
An investment in securities of the Company is speculative and subject to a number of risks including, without limitation, risks relating to: the need for additional financing; the relative speculative and illiquid nature of an investment in the Company; the volatility of the Company’s share price; the Company’s ability to generate sufficient revenues; the Company’s ability to manage future growth; the limited diversification in the Company’s existing investments; the Company’s ability to negotiate additional royalty purchases or other forms of investment from new investee companies; the Company’s dependence on the operations, assets and financial health of its investee companies; the Company’s limited ability to exercise control or direction over investee companies; potential defaults by investee companies and the unsecured nature of certain of the Company’s investments; the Company’s ability to enforce on any default by an investee company; competition with other investment entities; tax matters, including the potential impact of the Foreign Account Tax Compliance Act on the Company; the potential impact of the Company being classified as a Passive Foreign Investment Company; the Company’s ability to pay dividends in the future and the timing and amount of those dividends; reliance on key personnel; dilution of shareholders’ interest through future financings; and general economic and political conditions; as well as the risks discussed in the Company’s public filings. Although Flow Capital has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information and forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.
In connection with the forward-looking information and forward-looking statements contained in this press release, Flow Capital has made certain assumptions. Assumptions about the performance of the Canadian and U.S. economies over the next 24 months and how that will affect the Company’s business and its ability to identify and close new opportunities with new investees are material factors that the Company considered when setting its strategic priorities and objectives, and its outlook for its business, including its ability to satisfy required payments under the Transaction. Although Flow Capital believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements.
The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and Flow Capital does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward- looking information and statements attributable to Flow Capital or persons acting on its behalf is expressly qualified in its entirety by this notice.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Investment
BWXT announces $80M investment for plant in Cambridge – CityNews Kitchener
BWX Technologies (BWXT) in Cambridge is investing $80-million to expand their nuclear manufacturing plant in Cambridge.
Minister of Energy, Todd Smith, was in the city on Friday to join the company in the announcement.
The investment will create over 200 new skilled and unionized jobs. This is part of the province’s plan to expand affordable and clean nuclear energy to power the economy.
“With shovels in the ground today on new nuclear generation, including the first small modular reactor in the G7, I’m so pleased to see global nuclear manufacturers like BWXT expanding their operations in Cambridge and hiring more Ontario workers,” Smith said. “The benefits of Ontario’s nuclear industry reaches far beyond the stations at Darlington, Pickering and Bruce, and this $80 million investment shows how all communities can help meet Ontario’s growing demand for clean energy, while also securing local investments and creating even more good-paying jobs.”
The added jobs will support BWXT’s existing operations across the province as well as help the sector’s ongoing operations of existing nuclear stations at Darlington, Bruce and Pickering.
“Our expansion comes at a time when we’re supporting our customers in the successful execution of some of the largest clean nuclear energy projects in the world,” John MacQuarrie, President of Commercial Operations at BWXT, said.
“At the same time, the global nuclear industry is increasingly being called upon to mitigate the impacts of climate change and increase energy security and independence. By investing significantly in our Cambridge manufacturing facility, BWXT is further positioning our business to serve our customers to produce more safe, clean and reliable electricity in Canada and abroad.”
Investment
AI investments will help chip sector to recover: Analyst – Yahoo Finance
The semiconductor sector is undergoing a correction as interest rate cut expectations dwindle, prompting concerns about the impact on these high-growth, technology-driven stocks. Wedbush Enterprise Hardware Analyst Matt Bryson joins Yahoo Finance to discuss the dynamics shaping the chip industry.
Bryson acknowledges that the rise of generative AI has been a significant driving force behind the recent success of chip stocks. While he believes that AI is shifting “the way technology works,” he notes it will take time. Due to this, Bryson highlights that “significant investment” will continue to occur in the chip market, fueled by the growth of generative AI applications.
However, Bryson cautions that as interest rates remain elevated, it could “weigh on consumer spending.” Nevertheless, he expresses confidence that the AI revolution “changing the landscape for tech” will likely insulate the sector from the effect of high interest rates, as investors are unwilling to miss out on the “next technology” breakthrough.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance.
This post was written by Angel Smith
Video Transcript
BRAD SMITH: As rate cut bets shift, so have moves in one sector, in particular. Shares of AMD and Intel, both down over 15% in the last 30 days. The Philadelphia Semiconductor Index, also known as Sox, dropping over 10% from recent highs, despite a higher rate environment.
Our next guest is still bullish on the sector. Matt Bryson, Wedbush Enterprise Hardware analyst, joins us now. Matt, thanks so much for taking the time here. Walk us through your thesis here, especially, given some of the pullback that we’ve seen recently.
MATT BRYSON: So I think what we’ve seen over the last year or so is that the growth of generative AI has fueled the chip stocks. And the expectation that AI is going to shift everything in the way that technology works.
And I think that at the end of the day, that that thesis will prove out. I think the question is really timing. But the investments that we’ve seen that have lifted NVIDIA, that have lifted AMD, that have lifted the chip stock and sector, in general, the large cloud service providers, building out data centers. I don’t think anything has changed there in the near term.
So when I speak to OEMs, who are making AI servers, when I speak to cloud service providers, there is still significant investment going on in that space. That investment is slated to continue certainly into 2025. And I think, as long as there is this substantial investment, that we will see chip names report strong numbers and guide for strong growth.
SEANA SMITH: Matt, when it comes to the fact that we are in this macroeconomic environment right now, likelihood that rates will be higher for longer here, at least, when you take a look at the expectations, especially following some of the commentary that we got from Fed officials this week, what does that signal more broadly for the AI trade, meaning, is there a reason to be a bit more cautious in this higher for longer rate environment, at least, in the near term?
MATT BRYSON: Yeah. I think certainly from a market perspective, high interest rates weight on the market. Eventually, they weigh on consumer spending. Certainly, for a lot of the chip names, they’re high multiple stocks.
When you think about where there can be more of a reaction or a negative reaction to high interest rates, certainly, it has some impact on those names. But in terms of, again, AI changing the fundamental landscape for tech, I don’t think that high interest rates or low interest rates will change that.
So when you think about Microsoft, Amazon, all of those large data center operators looking at AI, potentially, changing the landscape forever and wanting to make a bet on AI to make sure that they don’t miss that change, I don’t think whether interest rates are low or high are going to really affect their investment.
I think they’re going to go ahead and invest because no one wants to be the guy that missed the next technology wave.
Investment
If pension funds can't see the case for investing in Canada, why should you? – The Globe and Mail
It’s time to ask a rude question: Is Canada still worth investing in?
Before you rush to deliver an appropriately patriotic response, think about the issue for a moment.
A good place to begin is with the federal government’s announcement this week that it is forming a task force under former Bank of Canada governor Stephen Poloz. The task force’s job will be to find ways to encourage Canadian pension funds to invest more of their assets in Canada.
Wooing pension funds has become a high-priority matter for Ottawa because, at the moment, these big institutional investors don’t invest all that much in Canada. The Canada Pension Plan Investment Board, for instance, had a mere 14 per cent of its massive $570-billion portfolio in Canadian assets at the end of its last fiscal year.
Other major Canadian pension plans have similar allocations, especially if you look beyond their holdings of government bonds and consider only their investments in stocks, infrastructure and real assets. When it comes to such risky assets, these big, sophisticated players often see more potential for good returns outside of Canada than at home.
This leads to a simple question: If the CPPIB and other sophisticated investors aren’t overwhelmed by Canada’s investment appeal, why should you and I be?
It’s not as if Canadian stocks have a record of outstanding success. Over the past decade, they have lagged far behind the juicy returns of the U.S.-based S&P 500.
To be fair, other countries have also fallen short of Wall Street’s glorious run. Still, Canadian stocks have only a middling record over the past 10 years even when measured against other non-U.S. peers. They have trailed French and Japanese stocks and achieved much the same results as their Australian counterparts. There is no obvious Canadian edge.
There are also no obvious reasons to think this middle-of-the-pack record will suddenly improve.
A generation of mismanagement by both major Canadian political parties has spawned a housing crisis and kneecapped productivity growth. It has driven household debt burdens to scary levels.
Policy makers appear unwilling to take bold action on many long-standing problems. Interprovincial trade barriers remain scandalously high, supply-managed agriculture continues to coddle inefficient small producers, and tax policy still pushes people to invest in homes rather than in productive enterprises.
From an investor’s perspective, the situation is not that appetizing. A handful of big banks, a cluster of energy producers and a pair of railways dominate Canada’s stock market. They are solid businesses, yes, but they are also mature industries, with less than thrilling growth prospects.
What is largely missing from the Canadian stock scene are big companies with the potential to expand and innovate around the globe. Shopify Inc. SHOP-T and Brookfield Corp. BN-T qualify. After that, the pickings get scarce, especially in areas such as health care, technology and retailing.
So why hold Canadian stocks at all? Four rationales come to mind:
- Canadian stocks have lower political risk than U.S. stocks, especially in the run-up to this year’s U.S. presidential election. They also are far away from the front lines of any potential European or Asian conflict.
- They are cheaper than U.S. stocks on many metrics, including price-to-earnings ratios, price-to-book ratios and dividend yields. Scored in terms of these standard market metrics, they are valued more or less in line with European and Japanese stocks, according to Citigroup calculations.
- Canadian dividends carry some tax advantages and holding reliable Canadian dividend payers means you don’t have to worry about exchange-rate fluctuations.
- Despite what you may think, Canada’s fiscal situation actually looks relatively benign. Many countries have seen an explosion of debt since the pandemic hit, but our projected deficits are nowhere near as worrisome as those in the United States, China, Italy or Britain, according to International Monetary Fund figures.
How compelling you find these rationales will depend upon your personal circumstances. Based strictly on the numbers, Canadian stocks look like ho-hum investments – they’re reasonable enough places to put your money, but they fail to stand out compared with what is available globally.
Canadians, though, have always displayed a striking fondness for homebrew. Canadian stocks make up only a smidgen of the global market – about 3 per cent, to be precise – but Canadians typically pour more than half of their total stock market investments into Canadian stocks, according to the International Monetary Fund. This home market bias is hard to justify on any rational basis.
What is more reasonable? Vanguard Canada crunched the historical data in a report last year and concluded that Canadian investors could achieve the best balance between risk and reward by devoting only about 30 per cent of their equity holdings to Canadian stocks.
This seems to be more or less in line with what many Canadian pension funds currently do. They have about half their portfolio in equities, so devoting 30 per cent of that half to domestic stocks works out to holding about 15 per cent of their total portfolio in Canadian equities.
That modest allocation to Canadian stocks is a useful model for Canadian investors of all sizes. And if Ottawa doesn’t like it? Perhaps it could do more to make Canada an attractive investment destination.
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