Good morning, ladies and gentlemen. Welcome to the Flow Capital Corp.'s earnings call for the Q2 2023. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. If anyone has difficulties hearing the conference, you may press star zero for operator assistance at any time. I would like to remind everyone that today's discussions may contain forward-looking statements that reflect current views with respect to future events. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. For more information on Flow Capital's risks and uncertainties related to these forward-looking statements, please refer to the company's management discussion and analysis dated August 28, 2023, which is available on SEDAR.
Today's call is being recorded on Tuesday, August 29th, 2023. I would now like to turn the meeting over to Alex Baluta, Chief Executive Officer of Flow Capital. Please proceed.
Thank you, Cheryl. Good morning, and thank you all for participating in today's call or for listening in on the recording. I'm joined by Gaurav Singh, our current Chief Financial Officer. After the closing market yesterday, we released our financial results for the second quarter ending June 30, 2023. Details can be found on our website at flowcap.com or as filed on CR. Similar to Q1, we had a relatively flat quarter that was in line with our expectations. I will not be going through the full financial statements on this call, but a few highlights. If you'd like more detail, I would encourage you to read our full financial statements. Again, there you can find on our website on SEDAR.
Recurring interest revenue was $ 1.45 million, down slightly from the prior year and essentially flat to the $ 1.5 million in recurring revenue from Q1 of this year. As I've mentioned several times in the past, our definition of recurring revenue is a non-IFRS metric. Our total revenue, as reported under IFRS for the quarter, was actually $2.3 million. However, IFRS revenue can be slightly distorting and hard to follow, as under IFRS, changes in the balance sheet need to flow through the income statement, and that can lead to things like negative revenue for the quarter, making it hard to track real performance of our core business. This is why we talk about recurring revenue and recurring free cash flow, which we believe are better metrics to track, and it's how we track ourselves.
As you mentioned on our Q1 call, we expected our revenue to be flat because we had several early repayments last year and early this year, and our redeployment of capital was not keeping pace with those early repayments. Although that is now changing as we deployed more than $6 million in capital in the last two months. But more on that in a moment. Which is recurring revenue, early repayments of Performio, Hereta, that was last year, two of our investments, and in April of this year, we had the repayment of Covo, all of which were earlier than the maturity date. However, over that same, same time period, we only had one new investment, and that was a relatively small investment into a company called Prolific. It was late last year.
Since we generate recurring interest and revenue from senior secured loans to the high-growth companies, when redeployments don't keep up with early repayments, we would expect the recurring revenue to be down, and that's what we're seeing now. Recurring cash flow, another non-IFRS metric, IFRS metric, defined as recurring revenue, less cash expense and less interest costs, was +$ 127,000 in the quarter and $727,000, $725,000 over the past four quarters. Again, these numbers are down slightly compared to prior periods for primarily the same reasons. Costs from our perspective were in line with our expectations. While slower redeployment is not optimal, it is primarily because we're being particularly selective in the deals that we choose to do, and this is one of the reasons why our five-year IRR is over 30%.
And again, more on that in a moment. But we're finally starting to redeploy our cash, which by the way, the cash at the end of the quarter was $ 8 million on our balance sheet. But as late in the quarter, we closed on an investment named Wrisk that is spelled W-R-I-S-K, Wrisk. It is a U.K.-based B2B2C SaaS company in the InsurTech space. And a few weeks ago, we also closed on an investment in the B2C space with a company in the sleep wellness, sorry, a B2C company in the sleep wellness space. In aggregate, between these two companies, we deployed approximately $6 million in the last two months.
Both of these investments carry an interest rate that is higher than our average rate from a few years ago, reflecting the change in the broader interest rate environment that we are seeing. We expect to see more deployments in the coming weeks and months. I have mentioned for several quarters now how our pipeline has been incredibly strong, and that strength continues, and we're finally starting to see some conversions of the pipeline. The strength has been driven by broader changes in the investment landscape. In particular, venture capitalists are still not investing in the companies that are either pure AI or they're growing at 100% or more. So if you're not pure AI or have, like, a 100%+ growth rate, venture capitalists are not interested. To be honest, those kind of companies are few and far between.
They're also avoiding down rounds in their existing companies in this current environment, which means they're not supporting their existing portfolio of investments. Add this to the fact that public markets are essentially closed and ultimately raising capital or large amounts of equity for most companies is a challenge. Yet there's a huge universe of great companies out there that are generating anywhere from $3 million- $15 million in revenue, which is our target. They're at or near breakeven because all of them have cut costs in this current environment, and for whatever reason, they need capital. And the VCs aren't there, and so it creates a fantastic opportunity for companies like Flow to make investments into those companies. So I'd like to give you a few stats to support what we're seeing in our pipeline. The stages in our pipeline start at the top.
We have a lead that progresses downward to market qualified lead, sales qualified lead, IC, or investment committee, term sheet, due diligence, and then portfolio. So to give you an idea, normally we see about 900+ leads at the top of the funnel every year, and we close on less than 1% of those. The key stages or key stage, I should say, in our IC level or investment committee, this is where the company's been preliminarily, fully qualified. I mean, they meet our standards, they understand our structure and our requirements, and so we both feel that there's a fit, and we start getting to know them better. This year, to date, we've had over 40 companies progress to the IC level in our pipeline. That compares with only 31 in all of 2022.
I would not be surprised if we see 90 companies-60 companies progress to the IC level in our pipeline this year. Furthermore, so far this year, we've issued 25 term sheets. Of those 25, we signed nine. We closed on two, as I mentioned, for approximately $ 6 million. We've rejected three in due diligence, and four are currently in due diligence. Of these four, we expect to close on most or all of them before the end of the year. And if we do, as we do, revenue and free cash flow growth should resume. For example, for the $ 6 million deployed earlier this year, that would generate over $ 1 million, roughly $ 1 million dollars in new revenue plus on a yearly basis. I also mentioned that in our pipeline stats, we rejected three deals this year after signing a term sheet and after doing detailed due diligence.
This selectivity and focus on quality is a good lead-in to the discussion about our five-year performance. On June 27th, we issued a press release that summarized our five-year investment performance. Specifically, we've invested $ 36 million into 16 portfolio companies. Our gross top-level IRR was 30.5% on capital deployed. Our loss ratio was less than 1% on 0.7%, which represented about a $ 300,000 cash loss. We increased book value per share from a low of $ 0.45 a share in Q4 2019, to a high of $ 1.23 per share in Q1 2022. That's an increase of 172%.
I will mention that for the quarter, we just book value down a couple of pennies to $ 1.18, primarily because of the issuance of shares and their, I should say, shares on the conversion of warrants and option exercise. Over the investment period that we mentioned, for the past three years, we've been generating positive EBITDA and positive free cash flow, and that continued again this quarter. We repurchased 14 million shares, about 31% of the outstanding common shares, at a weighted average price of 48% discount to book value. So essentially, we're buying dollars for $50 cents when we buy our own stock.
I'll also point out that we continue to be active in our NCIB, and in the past 9 months, we've purchased almost 1.7 million shares for $ 930,000, and again, $ 0.50. I expect that we'll continue our NCIB, given that we're cash flow positive and expect to be cash flow positive, we'll continue our NCIB into the future. While the 30.5% IRR is remarkable, and it's a testament to the team, to our process, and to our investment strategy and focus, for us, I would say that maintaining that 30% is probably not realistic over the long term. But as a recap, we invest in high-growth companies, primarily in tech. These are asset-light companies that are a perfect fit for our capital.
I will say that we do sometimes look outside of tech. What we primarily look for is good companies with great management, that have high growth. For us, high growth is generally defined to be 20%-50%+ growth, which, as I mentioned earlier in my statement, is below the threshold where most venture capitalists get interested. We focus on high growth because in these high growth companies, in addition to paying us high cash interest, we can generate disproportionate larger returns in equity upside. What we're really looking for is senior, the security of senior debt with equity upside, and we find our best bang for the buck is in growth companies.
As a reminder, in addition to taking mid-teen cash interest rate, we also end up owning two warrants or other bonus structures, somewhere between 1%-3% of the companies that we invest in. And it's through those bonus, the cash interest, it's both through the cash interest payments as well as through the gains in our warrants in our portfolio, bonus portfolio, that we have generated that 30% IRR. I would encourage you to read that June 27th press release, because if you haven't seen it, it's got some great details in it. While we're proud of our five-year performance, we're also realistic. Our long-term IRR target is in the low- to mid-20s, which is still a fantastic long-term return.... And if we hit that return, it will generate meaningful return on equity and book value growth for our stockholders.
Next, to help us capitalize on the quality and volume of deals that we're seeing and to help us continue to scale the business, we recently launched a new redeemable debenture. The debenture carries a floating rate of interest. The F series currently pays 10.5%, with a floor of 8% and a cap of 12%. For holders of greater than $ 1 million, it currently pays 50 basis points plus, meaning 11% interest, with a floor of 8.5% and a cap of 12.5%. It's RRSP eligible, it's redeemable by the holder on 90 days notice, and it sits senior to almost $ 30 million of equity that's on our balance sheet.
We're hopeful that this structure will appeal to investors as we plan on using this vehicle to raise capital to help scale our business and to continue to grow our portfolio. Finally, we're also announcing a CFO transition. Michael Denny will be joining us on September 5. Michael has over 25 years experience in investment banking and most recently was a managing director with private equity manager, Lynx Equity, where he managed the Lynx Equity Income Trust. He brings a mix of investment, financial, and capital raising skills that will help us to continue to scale our business. Gaurav Singh, our current CFO, will be leaving at the end of September. He'll be here for several weeks to help with the transition.
Gaurav has made a significant contribution to our business, as is evidenced by our book value growth and our profitability, and return to sustainable profitability and free cash flow growth, all during his tenure. He's left us well positioned for growth. I'd like to thank him for his hard work and his dedication, and wish him every success in the future. With that, I'll stop with my remarks and turn it back to the operator.
Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a one-tone prompt acknowledging your request. Questions will be taken in the order received. Should you wish to withdraw from the question queue, please press the star followed by the number two. If you are using a speakerphone, please lift the handset before pressing any keys. Once again, if you'd like to ask a question, please press star, then one on your touchtone phone. Standing by for questions. And once again, if you'd like to ask a question, please press star, then one on your touchtone phone. And presenters, at this time, I show no questions in queue.
Thank you, Cheryl. I appreciate that.
Mm-hmm.
Thank you, everybody, for joining the call and for listening. I would encourage you to download our financial statements, our press release, and read them. As usual, if you have any questions at any time, please feel free to call us or email. We appreciate your support and feedback, and we will talk to you next quarter. Thank you very much.
Thank you, ladies and gentlemen. This concludes today's conference. Please disconnect your line at this time.