Good morning, ladies and gentlemen, welcome to the Flow Capital's Q3 2022 earnings call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. I would now like to turn the conference over to Alex Baluta. Please go ahead, sir.
Thank you very much, operator. Thank you, everybody, for joining the call. Good morning. I'm joined by Gaurav Singh, our Chief Financial Officer. After the close of the market on Friday, we released our financial results for the third quarter, ending September 31st. Details can be found on our website or on SEDAR. We had a peak quarter continuing the progress we made last year, on the track last quarter, and the progress we've been making, pretty much for the last three to four years.
Here are the financial highlights. Recurring Revenue is CAD 1.6 million, up over 40% from last year. Adjusted Recurring Free Cash Flow of approximately CAD 400,000 in the quarter. That represents CAD 2 million in Adjusted Free Cash Flow year-to-date, and CAD 2.3 million in Adjusted Free Cash Flow over the past four quarters.
That number represents a record of Free Cash Flow for us going back at least four years. Total assets of approximately CAD 52 million compared to CAD 44 million at year-end, 2021, and up from CAD 51 million last quarter. Approximate cash of CAD 9.5 million compared to CAD 4.1 million at year-end, although that has since gone down through the payment of some payables as well as an investment that we closed shortly after the quarter. Book Value is now up to CAD 0.95 per share. That's up 27% year-to-date, and it's up from CAD 0.91 last quarter. Note that Some of the numbers quoted above are referred to our adjusted numbers, not our IFRS numbers, and we tend to focus on Recurring Revenue.
IFRS numbers can be volatile due to the unpredictable timing of biotech or unrealized fair value and FX adjustments. Given that, we feel the more appropriate metric to view our progress is based on Recurring Revenue from existing investments and Adjusted Recurring Free Cash Flow. I'm not gonna go into the detailed financial statements, but I do encourage everybody to download the report either from our website or from SEDAR. As you know, the last three years we've been transitioning away from royalties towards venture debt. We would have called those royalties quasi-equity type investments given the level of risk associated. Until we've been coming dramatically down the risk curve with the venture debt investments.
We really focus on growth companies that have growth north of 20% and are, you know, revenue above CAD 5 million and have good, strong governance in place, either through existing venture investors or bootstrap companies that have good, strong governance. Today we only have one revenue significant royalty.
I should say revenue royalty that's of any significant size remaining. I think our revenue co-contribution from royalties is down below 20%, and probably by the end of next year, it'd be down to well below 10%, if not zero. We rarely issue term sheets for royalties. It's always about these high-quality, senior, top-of-stack type debt loans that we make to high-growth companies. It is worth noting that our revenue this quarter is down sequentially from Q2 this year.
Last quarter, we had some gains in the revenue line from early exit, a company called Performio that did phenomenally well. Our numbers this year at CAD 1.67 did beat our internal forecast for this quarter. Turning to book value, as I said last quarter, honestly, I couldn't be more proud of our performance when it comes to book value and in creating shareholder value over the past four quarters. I will note that book value is now up almost 28% from the beginning of the year, up over 71% from the year-end 2020, and up over 111% from year-end 2019. I think our low in the last four years in terms of book value is around 40%, and we're now up to CAD 0.95.
I challenge you to find any other company, a comparable company to us in the same business that we do, that's had the same or better Book Value increase over the same time frame. In terms of Free Cash Flow, as I mentioned, over the trailing four quarters, we generated CAD 2.2 million in Adjusted Free Cash Flow from recurring revenues. As I said, we manage our business using that metric. That's probably the most important metric to that we key that and revenue growth. Our Adjusted Free Cash Flow metric is a very simple one. It's Recurring Revenue, less cash expenses, less interest expense. No changes in the balance sheet are included in that change in cash flow.
In terms of new deployments, we didn't have any new deployments in the quarter, although we did close a deal over CAD 2 million just a couple of weeks after the end of the quarter into another SaaS company. While the new deployments this year has been a little bit disappointing, we have seen an interesting and material change in our pipeline since about the September timeframe.
It's worth pointing out that the beginning of the year was a very weird time in terms of the deal flow that we were seeing. I'd suggested that what was really going on is companies who are primarily looking for equity to grow their business weren't understanding the changes in the markets as the equity market funding slowed down. There's a really good presentation out there by a venture capital company called Battery Ventures.
It did an analysis of the median valuation multiples between 2015 and 2020. Then compare that to the peak multiples in 2021. You know, then segmented that by growth rate. To give you an example, companies growing 20%-30% had a median multiple to revenue in the 2015-2019 timeframe of 6.45. The peak 2021 multiple was almost 24x. By the end of Q2 this year, that multiple had actually reverted to below that mean, and it was about the end of 6.3x revenue. You know, we saw this in a lot of our deals in 2021 and 2022. Companies were still thinking that they were worth 20 and 20, sometimes higher multiples of revenue.
That has disappeared from the equity markets. It's taking that a little bit of time to flow through into the expectations and perceptions of the companies that we fund. Because of that, we've seen a fairly dramatic increase in the number of deals that we're seeing and the quality of deals that we're seeing. For example, you know, normally we see about 1,000 leads per year. We're still on track. Year to date, we've seen about 850 deals, and we closed on three, whereas this time last year we closed on seven. What's interesting is that in the last couple of months, the deals that are getting very deep into our pipeline, there's over 10 of them.
There's, I would argue that most of those are of a quality and size that we haven't seen for quite some time. You know, one thing to note is we close on less than 1% of the deals that we see. We're very selective in our deal selection and the deals that we fund. Part of that is our focus on quality. I'm very encouraged by the-- Not the trends in the overall numbers. Those are on track, and we continue to try to grow the top of the funnel. I'm very encouraged by the types of deals that we've started seeing in the last couple of months. Continue on in terms of maturity and earnings.
We did not have any exits in the quarter, although we are expecting an exit imminently that we'll press release. You'll see that that deal carries a compounded annual growth rate in terms of return of over 20%, and that excludes the value of the warrants, which are still have a couple of years in terms of life to those warrants. You know, it's worth reiterating the type of investments that we do. We charge a cash yield plus a small sliver of warrants. That on average leaves us with about 1%-3% ownership of the company that we invest in through warrants. Right now there's 15 active investments, 13 warrant positions, and three common equity positions.
Those warrant positions are important because they represent upside that sometimes takes a longer time to materialize, given that the warrants normally have a six-year life. But when they do, they represent a very meaningful contribution to our returns of shareholder returns over time. We expect that over time, as we reach our CAD 100 million assets, and then we continue to grow, our warrant portfolio, which as I said is 13 right now, should be over 20. We do not do deals without warrants. We call this a minimally dilutive strategy as a replacement for equity. It's been very successful, and those warrants represent a very meaningful contribution to our upside over time. And frankly, downside protection.
In terms of assets, just to mention, we hit the CAD 53 million assets this quarter, up from CAD 51 million in Q2, largely driven by FX. We continue to have good performance in all of our underlying investments. Our book value is at CAD 0.95 per share. At the end of the quarter, we had CAD 9.5 million cash, that's down a little bit from investments and the availability of some tax in the U.S. With that, I will pause my commentary and see if we have any questions. Operator, back to you.
Thank you, sir. Ladies and gentlemen, we will now begin the question- and- answer session. Should you have a question, please press star followed by one on your touchtone phone. If you would like to withdraw your request, please press star followed by two. Ladies and gentlemen, as a reminder, should you have any questions, please press star followed by one. There are no questions at this time. I'll be turning the call over back to Mr. Alex Baluta. Sir, please proceed.
Thank you very much, operator. Appreciate everybody's time, and I look forward to speaking to you again at the end of the year. Thank you very much.
Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.