FLINT Announces Transformational Recapitalization

Executive Summary

• FLINT Corp. announced a proposed recapitalization transaction to significantly reduce debt, eliminate annual interest costs, and simplify its capital structure through a plan of arrangement.
• The transaction involves exchanging approximately $135.3 million in Senior Secured Notes and all outstanding Series 1 and Series 2 Preferred Shares for new Common Shares, effectively converting debt and preferred equity into common equity.
• The recapitalization is supported by Canso Investment Counsel Ltd., the company's largest shareholder and primary lender, which controls 97% of the Senior Secured Notes and 99% of the Preferred Shares.

Key Details

• Debt Extinguishment: All of the Company's 8.00% senior secured debentures due October 14, 2027, with an aggregate principal amount of $135,335,053, plus accrued interest from June 30, 2025, will be exchanged for new Common Shares.
• Preferred Share Extinguishment: All entitlements to accrued and unpaid dividends under the Series 1 and Series 2 cumulative redeemable convertible preferred shares will be extinguished.
• Share Exchange Ratios:
  • The Senior Secured Notes will be exchanged for Common Shares representing approximately 90% of the total Common Shares issued and outstanding post-recapitalization.
  • The Preferred Shares will be exchanged for Common Shares representing approximately 7.5% of the total Common Shares issued and outstanding post-recapitalization.
  • Existing Common Shareholders will retain their shares (subject to consolidation) but will own only approximately 2.5% of the total Common Shares issued and outstanding post-recapitalization.
• Share Consolidation: Common Shares will be consolidated on a basis of one post-consolidation Common Share for every 40 pre-consolidated Common Shares.
• Total Shares Issued: The aggregate number of Common Shares expected to be issued is 107,251,209 (post-consolidation basis), representing approximately 97.5% of the total issued and outstanding Common Shares on a pre-closing non-diluted basis.
• Financial Impact: Total debt will be reduced by approximately C$135,335,053, and annual cash interest expense will be reduced by approximately C$10,826,804.
• Voting Support: Canso has agreed to vote 97% of outstanding Senior Secured Notes, 99% of outstanding Preferred Shares, and 10% of outstanding Common Shares in favor of the transaction. Directors holding shares have agreed to vote approximately 6.9% of Common Shares and 0.057% of Preferred Shares in favor.
• Registration Rights: The Company entered into a registration rights agreement with Canso, granting Canso certain registration rights for future sales of Common Shares as long as it beneficially controls at least 10% of the Common Shares.
• Timeline and Approvals: The transaction requires approval by holders of Senior Secured Notes, Preferred Shares, and Common Shares (via separate meetings), as well as regulatory approval from the TSX and the Court of King's Bench of Alberta. Meetings are expected in late September 2025, with closing anticipated by the end of September 2025.
• Advisors: ATB Securities Inc. is the financial advisor to the Company; Origin Merchant Partners is the independent financial advisor to the Independent Committee; Blake, Cassels & Graydon LLP is legal counsel to FLINT.

Notable Quotes

• Barry Card, Chief Executive Officer: "This Recapitalization marks a pivotal milestone in FLINT's evolution. With the continued support of Canso and our other stakeholders, we are well-positioned to accelerate our strategic objectives. The Recapitalization enhances our ability to deliver our comprehensive service offerings, broaden our geographic reach, and further diversify our end markets. We are energized by the opportunities ahead and remain committed to creating long-term value for our shareholders and all stakeholders."