Quinsam Capital Corporation

Quinsam Capital Corporation

November 17, 2015 07:44 ET

Quinsam Reports Q3/2015 Financial Results, Comments on Recent Developments and Announces Stock Buyback Program

TORONTO, ONTARIO--(Marketwired - Nov. 17, 2015) -


Quinsam Capital Corporation (CSE:QCA) ("Quinsam" or the "Company") today released unaudited financial results for the third quarter ended September 30, 2015 and provided investors with an update on recent developments.

Q3/2015 Results

Quinsam reported a net loss of $519,175 in Q3/2015 ($0.02 per share) versus a profit of $671,741 in Q3/2014 ($0.03 per share). This brings earnings for the first nine months of the year to a loss of $82,336 ($0.00 per share) versus a profit of $838,895 ($0.04 per share) in the preceding year.

The third quarter began with relatively unremarkable performance in July and early August. As the quarter wore on, the very negative performance in Canadian equity markets and in particular small cap markets took its toll. "To provide a context, the TSX-V Composite Index fell 21.1% in the third quarter, bringing its year-to-date loss to 23.7%" said Roger Dent, CEO of Quinsam. "While disappointing, our marginal year-to-date loss is substantially better than the results reported by the overall small cap market. In the weeks since the end of the quarter, we have seen a return to asset growth, albeit a modest one."

Quinsam's financial results and MD&A have been posted on sedar.com.

Update on Recent Events

Quinsam made four investments in recent months in companies with near-term going public events: Inspira Financial Inc. (LND), Distinct Infrastructure Group Inc. (DUG), Imex and Resideo Properties. In all four cases, we had expected to see good gains on the completion of the listing process.

Inspira and Distinct Infrastructure are now trading. Inspira operates in the fragmented marketplace of small companies in the large and growing market for alternative financial services offered to healthcare providers and their patients across the United States. We exited Inspira early at a modest profit amid signs of growing trouble in the healthcare sector. We continue to hold no-cost warrants in Inspira. Distinct Infrastructure has approximately 250 employees in 5 offices across the country and is focused on offering turnkey solutions to telecommunication and cable companies, electrical providers and government operated utilities and through fares. Distinct Infrastructure is trading modestly below our cost, despite reporting strong third quarter results. We remain optimistic about Distinct Infrastructure and are encouraged to see increasing support from new investment dealers.

We understand that Imex continues to target a Q4/2015 listing and the Resideo RTO is scheduled for January 2016. Ibex's products and services help governments to provide "Any Time, Any Where, Any Device and Any Channel" convenience for citizens to access government services. Resideo is a privately held Canadian company in the process of acquiring a portfolio of single-family and multi-tenant residential properties in the Detroit, Michigan area. It has an LOI to merge with Telferscot Resources Inc., (TFS-CSE), a publicly traded company, in early 2016. Despite current market conditions, we remain optimistic about both of these transactions.

Quinsam has made an investment in Pinetree Capital Ltd. "Pinetree has made some excellent progress on reducing its considerable debt load" said Roger Dent. "However, the stock is near its multi-year lows and Pinetree does not appear to have much leeway or free cash to make new investments to attract investor interest. Nonetheless, we think that Pinetree's tax losses are very interesting and provide an opportunity for a revitalization of the entity in the future."

Stock Buyback Program

Quinsam is pleased to further announce today that it intends to proceed with a normal course issuer bid to purchase up to 1,320,383 of its common shares (the "Bid").

The Company is commencing the Bid because it believes that the current market price of its common shares may not fully reflect the underlying value of the Company's business and future prospects. The Company believes that the repurchase of its common shares for cancellation is in the best interests of its shareholders because the Bid will increase the respective proportionate shareholdings and equity interests of all remaining shareholders.

As of the date hereof, the Company has 26,407,660 common shares issued and outstanding. The 1,320,383 common shares that may be purchased by the Company under the Bid represent approximately 5% of the Company's outstanding shares. The Company will commence the Bid on November 23, 2015. The Bid will terminate on November 22, 2016, or on an earlier date in the event that the number of common shares sought in the Bid has been repurchased. The Company reserves the right to terminate the Bid earlier if it feels that it is appropriate to do so.

All common shares will be purchased on the open market through the facilities of the Canadian Securities Exchange ("CSE"), and payment for the common shares will be made in accordance with CSE policies. The price paid for the common shares will be the prevailing market price at the time of purchase. Purchases may be suspended at any time, and no purchases will be made other than by means of open market transactions during the term of the Bid. The Company has engaged M Partners to act as the broker through which the Bid will be conducted.

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 Quinsam's investors 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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