Quinsam Capital Corporation

Quinsam Capital Corporation

December 04, 2014 09:50 ET

Quinsam Announces Advisory Agreement with NTG Clarity Networks and Monthly Update for November 2014

TORONTO, ONTARIO--(Marketwired - Dec. 4, 2014) -


Quinsam Capital Corporation (CSE:QCA) ("Quinsam" or the "Company") today announced a new advisory agreement with NTG Clarity Networks Inc. (NTG) and provided an update to investors for the month of November 2014.

Advisory Agreement with NTG Clarity Networks

NTG has engaged Quinsam as a strategic and financial advisor effective December 1, 2014.

Roger Dent, the CEO of Quinsam, stated that "NTG Clarity is exactly the kind of company we like to invest in and work with. We initially invested in NTG some months ago and have increased our holding since then. The Company has been reporting increasing revenue and earnings yet in our opinion is undervalued and underappreciated. NTG has significant exposure to fast growing international IT markets, which diversifies its business outside Canada. We look forward to working with NTG and assisting the Company with the execution of its business plan."

Quinsam will develop and implement a strategic program to raise NTG's visibility and advise on the execution of the Company's business plan. The agreement has an initial term of six months.

November Investments

Quinsam undertook several important new investments in the month of November.

We acquired convertible debentures in Payfirma Corporation, a rapidly-growing private company in the payment facilitation space. We participated in a financing along with several insiders of the company. We expect the company to seek a listing in 2015, at which time we will have the option of converting our debentures at a very generous discount of 25% to the go-public price. In the meantime we earn a 15% coupon.

We committed to a long-brewing financing by Zaio Corporation. The financing has been an overhang on the stock for quite some time and in our opinion was priced on very attractive terms. The financing will allow Ziao to complete some key strategic acquisitions. The unit included a very generous full warrant.

While we have been reluctant to invest in mining in recent months, we are seeing compelling value in some revenue-generating small producers. While we do not plan on making mining an area of significant investment, we did make an investment in and assisted with the structuring of a very attractively-engineered debenture issued by Newlox Gold Ventures Corp. The debenture offers full convertibility plus full warrant coverage. We see the potential for this company to generate very strong near term cash flow in the context of its valuation.

Performance Update

The Company closed November with a total unaudited portfolio of over $2.4 million compared with $2.4 million at the end of October. Quinsam has some modest exposure to the oil & gas sector, which offset much of the month's progress elsewhere in the portfolio. We also funded our first dividend in the month.

"We were very pleased generally with the Q3 results announced by our investees in November. NTG Clarity Networks, Photon Control, Titan Logix, Sangoma and Northern Frontier were among the companies reporting solid results," said Roger Dent, CEO of Quinsam.

November, like September and October, was a very difficult market for Canadian small cap stocks. The general negative market tone was exacerbated, we think, by signs of year-end tax-loss selling," said Mr. Dent. "While tax loss selling at this time of the year is a recurring factor, it can often be followed by strong results in late December and the early part of the new year."

An important component of our business strategy is the accumulation of purchase warrants at little or no cost. With the purchases of Newlox and Zaio in November, Quinsam's warrant portfolio grew to over 6 million warrants from approximately 2.1 million at the end of October. We value unlisted warrants at intrinsic value, which we see as being a conservative approach.

About Quinsam Capital Corporation

Quinsam is a merchant bank based in Canada. Our merchant banking business may encompass a range of activities including acquisitions, advisory services, lending activities and portfolio investments. Quinsam invests its capital for its own account in assets, companies or projects which we believe are undervalued and where we see a viable plan for unlocking such value. We do not invest on behalf of any third party and we do not offer investment advice.

Generally, Quinsam does not believe that individual investments are material reportable events. Quinsam chooses to announce certain investments once the company is certain that it has finished buying its position because the Company feels that this information helps investors in Quinsam understand its investment decision making process. Generally, Quinsam does not announce the sale of investments.

This press release may contain forward-looking statements relating to anticipated future events, results, circumstances, performance or expectations that are not historical facts but instead represent our beliefs regarding future events, which are inherently uncertain. Forward-looking statements can often, but not always, be identified by forward-looking words such as "anticipate", "believe", "continue", "expect", "goal", "plan", "intend", "estimate", "may", "project", "predict", "potential", "target", and "will" or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance.

By their nature, forward-looking statements require us to make assumptions which include, among other things, that (i) Quinsam will have sufficient capital under management to effect its business strategies, (ii) the business strategies will produce the results intended by Quinsam, and (iii) the markets will react and perform in a manner consistent with the business strategies.

Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. The Company believes that the expectations reflected in the forward-looking information are reasonable but no assurance can be given that these expectations will prove to be correct. Some of the risks and other factors that could cause actual results to differ materially from those expressed in forward-looking information expressed in this press release include, but are not limited to: market and general economic conditions, interest rates, regulatory and statutory developments, the nature of the Company's investments, the available opportunities and competition for investments, the concentration of the Company's investments in certain industries and sectors, reliance on key personnel, risks affecting the Company's investments, management of the growth of the Company, and exchange rate fluctuations. Readers are cautioned that the foregoing list of risks and factors is not exhaustive. Although the Company has attempted to identify important factors that could cause actual events or results to differ materially from those described in forward-looking information, there may be other factors that cause events or results to differ from those intended, anticipated or estimated.

The forward-looking information contained herein is provided as at the date of the date of this press release, based upon the opinions and estimates of management and information available to management as at the date of this press release. The Company does not undertake and specifically disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable law. Readers are cautioned not to place undue reliance on forward-looking information contained in this press release.

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