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Kingsway Financial Services Inc . (NYSE:KFS), a company specializing in fire, marine, and casualty insurance with a market capitalization of $216 million, has successfully completed a private placement of a newly created class of preferred stock, raising a total of over $6 million. According to InvestingPro data, the company is currently trading near its 52-week low of $7.60, with the stock showing a negative earnings per share of -$0.27 over the last twelve months. This follows the initial announcement on February 18, 2025, as detailed in the company’s prior 8-K filing.
From February 18 through February 24, 2025, Kingsway entered into additional Subscription Agreements, resulting in the sale of 63,244 shares of its Class C Preferred Stock at $25 per share, generating aggregate proceeds of $1,581,100. This second closing complements the initial sale of 176,756 shares, which had already secured $4,418,900 for the company. InvestingPro analysis reveals that while the company maintains a strong gross profit margin of 67.7%, it faces profitability challenges, with additional insights available in the comprehensive Pro Research Report covering this and 1,400+ other US equities.
The Class C Preferred Stock was offered to accredited investors without registration under the Securities Act of 1933, in reliance upon exemptions provided by Section 4(a)(2) of the Act and/or Rule 506 of Regulation D. This strategic move by Kingsway indicates a focus on expanding its financial base without the immediate need for public offering.
The shares are not registered under the Securities Act or any state securities laws, and the company has made it clear that there has been no general solicitation or advertising in connection with this offering. The offering was conducted privately and is now concluded.
Kingsway’s latest financial maneuver, as disclosed in the SEC filing, reflects an effort to strengthen its capital structure and potentially fund its growth initiatives or other corporate purposes. This move is consistent with the company’s strategy to optimize its financial flexibility. InvestingPro data shows the company has achieved a modest revenue growth of 2.02% over the last twelve months, with annual revenue reaching $108.63 million. Subscribers to InvestingPro can access additional ProTips and detailed financial metrics to better understand the company’s strategic positioning and growth potential.
The information for this news article is based on statements from a press release and SEC filings by Kingsway Financial Services Inc.
In other recent news, Kingsway Financial Services Inc. announced a private placement of its newly created Class C Preferred Stock, raising $4.4 million. The company sold 176,756 shares at $25 per share to accredited investors between February 12 and February 14. This transaction is part of a broader strategy to bolster Kingsway’s capital, with the potential for additional sales up to $6 million, less the initial proceeds. The Class C Preferred Stock offers an 8% annual dividend, paid quarterly, which increases to 18% if unpaid for more than two quarters. These shares are convertible into common stock, with each preferred share converting to 2.63158 common shares before February 12, 2032. Kingsway is required to redeem all outstanding Class C Preferred Stock by February 12, 2032, at $25 per share plus accrued dividends. Furthermore, the company can redeem 25% of the issued Class C Preferred Stock following significant asset sales, ensuring a 15% internal rate of return for investors. The holders of this stock do not have voting rights at shareholder meetings.
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