Kingsway Financial Services Announces Private Placement of Class C Preferred Stock

Kingsway Financial Services Inc. recently disclosed its entry into a material definitive agreement involving a private placement of Class C Preferred Stock. The Delaware corporation finalized Subscription Agreements on February 12, 13, and 14, 2025, initiating the issuance and sale of 176,756 shares of the newly designated Class C Preferred Stock. This private placement, known as the Offering, raised an initial $4,418,900 from accredited investors.

Additional shares of Class C Preferred Stock may be issued in further closings, potentially totaling up to $6,000,000, excluding the Initial Closing proceeds. All shares issued within the Offering were transacted without registration under the Securities Act of 1933, relying on exemptions outlined in Section 4(a)(2) and/or Rule 506 of Regulation D.

The Class C Preferred Stock carries significant terms outlined in the Certificate of Designations filed by the company with the Delaware Secretary of State. Each share can be converted into 2.63158 shares of the company’s common stock before February 12, 2032, subject to specific adjustments. The stock holders are entitled to fixed, cumulative dividends at a rate of 8% annually, increasing to 18% if dividends remain unpaid for over two consecutive quarters.

In events of liquidation, dissolution, or winding-up, Class C Preferred Stock holders are prioritized to receive $25 per share, along with accrued but unpaid dividends, ahead of junior stockholders. The stock also features mandatory redemption in 2032 and the company’s option for partial redemption post asset sales exceeding 15% of consolidated revenues.

Moreover, the Class C Preferred Stock holders do not possess voting rights within the company. The corporation, in a related filing, incorporated the key terms of the Class C Certificate of Designations into its legal framework.

The transactions prompt the company to report the creation of a financial obligation under an off-balance sheet arrangement, unregistered sales of equity securities, and the amendment to its Articles of Incorporation or Bylaws. The filing also includes essential financial statements and exhibits associated with the private placement.

The report does not act as an offer to solicit security purchase interests. With Kent A. Hansen serving as the Chief Financial Officer, the document was duly authorized and signed on behalf of Kingsway Financial Services Inc. on February 18, 2025.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Kingsway Financial Services’s 8K filing here.

Kingsway Financial Services Company Profile

Kingsway Financial Services Inc, through its subsidiaries, engages in the extended warranty and business services in the United States. The company operates through two segments, Extended Warranty and Kingsway Search Xcelerator. The Extended Warranty segment markets, sells, and administers vehicle service agreements and related products for new and used automobiles, motorcycles, and ATVs.