Kingsway Financial Services Inc. Files 8-K with Key Agreements

TL;DR

Kingsway Financial Services Inc. filed an 8-K detailing material agreements, financial obligations, and equity sales.

AI Summary

On September 24, 2024, Kingsway Financial Services Inc. entered into a material definitive agreement and created a direct financial obligation. The company also reported on unregistered sales of equity securities and amendments to its articles of incorporation or bylaws. This filing also includes Regulation FD disclosures and financial statements/exhibits.

Why It Matters

This 8-K filing indicates significant corporate actions, including new financial obligations and equity transactions, which could impact the company's financial structure and shareholder value.

Risk Assessment

Risk Level: medium — The filing involves material definitive agreements, financial obligations, and unregistered equity sales, which can introduce financial and operational risks.

Key Numbers

• 12-31 — Fiscal Year End (Indicates the end of the company's financial reporting year.)

Key Players & Entities

• KINGSWAY FINANCIAL SERVICES INC. (company) — Registrant
• September 24, 2024 (date) — Date of earliest event reported
• Delaware (jurisdiction) — State of incorporation
• 001-15204 (commission_file_number) — SEC File Number

FAQ

Key Financial Figures

• $0.01 — h registered Common Stock , par value $0.01 per share KFS New York Stock Exchang
• $25 — Stock, with a liquidation preference of $25 per share (the " Class B Preferred Stoc
• $8,2500,000 — red Stock "), for aggregate proceeds of $8,2500,000. The shares of Class B Preferred Stock
• $25.00 — erred Stock will be entitled to receive $25.00 per share of Class B Preferred Stock, p
• $19,638,454 — Buyer paid cash consideration equal to $19,638,454 (the " Closing Consideration "), of whi
• $220,000 — he " Closing Consideration "), of which $220,000 was delivered to an escrow account for
• $120,000 — ons to a maximum liability cap equal to $120,000 in certain circumstances. In connection
• $7.75 million — . The new facility comprises a six year $7.75 million term loan (the " Term Loan ") and a two
• $500,000 — year revolving credit facility of up to $500,000 (the " Revolver "). The payment and per

Filing Documents

• kfs20240926_8k.htm (8-K) — 55KB
• ex_727852.htm (EX-3.1) — 119KB
• ex_727850.htm (EX-10.1) — 82KB
• ex_727851.htm (EX-10.2) — 92KB
• ex_727732.htm (EX-10.3) — 484KB
• ex_727733.htm (EX-10.4) — 728KB
• ex_727879.htm (EX-99.1) — 14KB
• avidlogo.jpg (GRAPHIC) — 15KB
• fitzgeraldsig.jpg (GRAPHIC) — 3KB
• islogo.jpg (GRAPHIC) — 11KB
• logo01.jpg (GRAPHIC) — 5KB
• 0001437749-24-030176.txt ( ) — 2046KB
• kfs-20240924.xsd (EX-101.SCH) — 3KB
• kfs-20240924_def.xml (EX-101.DEF) — 12KB
• kfs-20240924_lab.xml (EX-101.LAB) — 16KB
• kfs-20240924_pre.xml (EX-101.PRE) — 12KB
• kfs20240926_8k_htm.xml (XML) — 3KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. Private Placement of Class B Preferred Stock On September 24, 2024, Kingsway Financial Services Inc., a Delaware corporation (the " Company "), entered into certain Subscription Agreements (the " Subscription Agreements ") pursuant to which the Company issued and sold in a private placement (the " Private Placement ") to accredited investors in the aggregate 330,000 shares of a newly created class of preferred stock designated Class B Preferred Stock, with a liquidation preference of $25 per share (the " Class B Preferred Stock "), for aggregate proceeds of $8,2500,000. The shares of Class B Preferred Stock were offered and sold without registration under the Securities Act of 1933, as amended (the " Securities Act "), in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated thereunder. On September 24, 2024 the Company filed a certificate of designations for the Class B Preferred Stock with the Delaware Secretary of State (the " Class B Certificate of Designations ") which sets forth the following key terms. The following description of the Class B Certificate of Designations does not purport to be complete and is qualified in its entirety by reference to the full text of the Class B Certificate of Designations, a copy of which is attached hereto as Exhibit 3.1 and incorporated herein by reference. Conversion Terms Each share of Class B Preferred Stock is convertible at the option of the holder thereof into 2.6316 shares of the Company's common stock, par value $0.01 per share (the " Common Shares "), at any time prior to September 24, 2031. Subject to certain adjustments set forth in the Class B Certificate of Designations, the maximum number of Common Shares issuable upon conversion of the Class B Preferred Stock is 842,112 Common Shares. The number of Common Shares into which the Class B Preferred Stock will be convertible

02 Unregistered Sales of Equity Securities

Item 3.02 Unregistered Sales of Equity Securities. The information provided in response to Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02. The offer and sale of the Class B Preferred Stock in the Private Placement was made in reliance on the exemption from registration afforded under Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated under the Securities Act. This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

03 Amendments to Articles of Incorporation or Bylaws Change in Fiscal Year

Item 5.03 Amendments to Articles of Incorporation or Bylaws Change in Fiscal Year. On September 24, 2024, the Company filed the Class B Certificate of Designations with the Secretary of State of the State of Delaware. The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 5.03.

01 Regulation FD Disclosure

Item 7.01 Regulation FD Disclosure. On September 27, 2024, the Company issued a press release announcing the acquisition of IS LLC. The press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The information contained in this Item 7.01 and Exhibit 99.1 attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the " Exchange Act "), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits. Exhibit Number Description 3.1 Class B Certificate of Designations 10.1 Form of Subscription Agreement – Legal Entity 10.2 Form of Subscription Agreement – Individual Investor 10.3 Membership Interest Purchase Agreement, dated as of September 26, 2024, by and among Steel Bridge Acquisition LLC, Image Solutions, LLC, Post IS Holdings, LLC and Garrett S. Williams* 10.4 Credit Agreement, dated as of September 26, 2024, between Image Solutions, LLC, Steel Bridge Acquisition LLC and Avidbank* 99.1 Kingsway Financial Services Inc. press release, dated September 27, 2024 104 Cover Page Interactive Data File *The annexes, schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of such annexes, schedules and exhibits, or any section thereof, to the Securities and Exchange Commission upon request. 5

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. KINGSWAY FINANCIAL SERVICES INC. Date: September 27, 2024 By: /s/ Kent A. Hansen Name: Kent A. Hansen Title: Chief Financial Officer

View Full Filing

View this 8-K filing on SEC EDGAR