Bullish indicating open at $55-$60, IPO prices at $37
Kingsway Financial Services Inc . (NYSE:KFS), a $283.63 million market cap company trading at $10.30 per share, announced the issuance of a new class of preferred stock, raising $2 million in a private placement to accredited investors. The transaction involved the sale of 80,000 shares of Class D Preferred Stock with a liquidation preference of $25 per share. According to InvestingPro data, the company has demonstrated strong momentum with a 29.56% return over the past year, despite currently not being profitable.
The Class D Preferred Stock, which ranks senior to all other classes and series of the company’s capital stock, entitles holders to fixed cumulative preferential cash dividends at a rate of 8% per annum, payable quarterly if declared by the board. In case of non-payment of dividends for more than two consecutive quarters, the dividend rate will increase to 18% per annum. With a current ratio of 1.33 and revenue of $114.71 million in the last twelve months, the company maintains adequate liquidity to support its dividend obligations.
Each share of Class D Preferred Stock is convertible into 2.6316 shares of common stock at any time before May 7, 2032, subject to adjustments. The maximum number of common shares issuable upon conversion is 210,526. The conversion terms include adjustments for stock dividends, subdivisions, consolidations, rights offerings, special distributions, capital reorganizations, and reclassifications.
In the event of liquidation, dissolution, or winding-up of the company, holders of the Class D Preferred Stock will have the right to receive $25.00 per share plus accrued but unpaid dividends before any distribution to holders of junior stock. The company has the obligation to redeem all outstanding shares of Class D Preferred Stock on May 7, 2032, at the redemption price of $25.00 per share, plus accrued dividends.
Additionally, the company may redeem 25% of the issued Class D Preferred Stock following a sale of assets that represent more than 15% of its consolidated revenues in the prior 12-month period, at a price that would yield a total internal rate of return of 15%.
Holders of the Class D Preferred Stock do not have voting rights in company meetings.
This strategic financial move, detailed in the company’s 8-K filing, is aimed at bolstering Kingsway’s capital structure without the immediate dilution of common stock. The filing also noted the creation of this new stock class following the filing of the Class D Certificate of Designations with the Secretary of State of Delaware.
The information herein is based on Kingsway Financial Services Inc.’s recent SEC filing and is intended to provide investors with key insights into the company’s latest financial undertaking. For a comprehensive analysis of KFS’s financial health, including 8 additional ProTips and detailed valuation metrics, investors can access the full company research report on InvestingPro, which provides expert insights and advanced analytical tools for informed investment decisions.
In other recent news, Kingsway Financial Services Inc. reported its financial results for the first quarter of 2025, highlighting an 8.4% year-over-year increase in revenue, bringing the total to $28.3 million. Despite this growth, the company’s consolidated adjusted EBITDA experienced a decline of $800,000 compared to the previous year. Kingsway also announced strategic acquisitions, acquiring MLC Plumbing and Viewpoint, to enhance its platform and service offerings. These acquisitions are expected to contribute positively to Kingsway’s financial performance, with MLC Plumbing adding approximately $800,000 of annual adjusted EBITDA and Viewpoint adding over $1,000,000 of unaudited annual recurring revenue.
The company further strengthened its leadership by appointing two new independent directors to its board, aligning with its strategic growth objectives. In terms of analyst activity, there were no specific upgrades or downgrades reported, but the company’s strategic moves and financial results could influence future analyst opinions. Kingsway’s focus remains on expanding its Kingsway Search Accelerator and extended warranty segments, while exploring new opportunities in insurance brokerage, wealth management, and accounting services. These recent developments position Kingsway for potential growth and expansion in its respective markets.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.