Toronto, Ontario–(Newsfile Corp. – November 23, 2020) – Quinsam Capital Corporation (CSE: QCA) (“Quinsam” , “We” or the “Company”) wishes to announce its Q3/2020 results, with net income of $0.9 million ($0.01 per share basic, $0.01 fully diluted) versus a net loss of $5.2 million ($0.05 per share basic, $0.04 fully diluted) in Q3/2019. Investors can access the company’s full financial statements on sedar.com.
“At September 30, 2020, we had net assets of approximately $0.30 per share,” said Roger Dent, CEO of Quinsam. “Our growth in NAV per share exceeded EPS due to the favourable impact of our ongoing normal course issuer bid purchases.”
Market conditions stabilized in Q3 and this helped the valuations of some of our publicly-traded investments. This has also improved the prospects for our private company and debt investments, although our carrying values were not generally impacted.
Overall, our portfolio of cannabis investments had a positive if muted performance. In Quinsam’s non-cannabis portfolio, we saw a strong performance by Newlox Gold, which moved from $0.055 at the end of Q2 to $0.115 at the end of Q3 and to a recent trading level of $0.16. Quinsam’s private e-sports betting investment, PMML, completed a $3 million investment round at a premium of approximately 50% to our previous carrying value, which was reflected in our Q3 results. PMML currently plans a public listing in early 2021.
One of Quinsam’s cannabis companies completed a liquidity event in Q3, Molecule Holdings. This was not a large investment for us and it did not have a significant impact on the quarter. Several more of Quinsam’s investee companies have announced 2020 liquidity plans including Eden Empire, Ikanik Farms and Embark, all of which have announced RTO transactions and are expected to trade in the near term.
In recent months we have made a number of smaller follow-on investments in some of our existing issuers including Pharmadrug debentures, Nutritional High mortgage debentures and additional loans to Budd Hutt. We also recently exercised one tranche of our Agri Force warrants. We sold our free trading shares in CB2 Insights and replaced the holding at a lower cost with units of CB2’s $0.15 September new issue. We participated in a unit new issue by Lexagene. We sold the Lexagene shares comprising part of the unit for nearly all our total unit cost and retain the warrants at a negligible residual cash investment. We acquired a small position in Nexe Innovations, a manufacturer of environmentally-friendly Keurig pods, which is expected to start trading in the near term. We have also made an investment in Peak Health, a Toronto-based medical clinic company where we expect to see a liquidity event in 2021.
Issuer Bid Update
Quinsam announced a normal course issuer bid to purchase up to 5,446,952 of its common shares (the “Bid”) in August 2020. The Company commenced 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. The Company commenced the Bid on August 28, 2020 and it will terminate on August 27, 2021, 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.
In the quarter ending September 30, 2020, Quinsam repurchased and cancelled 2,250,000 shares pursuant to the Bid, bringing total repurchases pursuant to the Bid since August 28, 2020 to 2,250,000 shares. The shares were purchased at a large discount to NAV and the repurchases had a positive impact on NAV per share for remaining shareholders.
About Quinsam Capital Corporation
Quinsam is a merchant bank based in Canada with a focus on “small cap” investments. 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 may choose 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.
For further information please contact:
Roger Dent, CEO
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: cannabis companies Quinsam has invested in obtaining and maintaining regulatory approvals including acquiring and renewing U.S. state, local or other licenses, and the uncertainty of existing protection from U.S. federal or other prosecution; regulatory or political change such as changes in applicable laws and regulations, including U.S. state-law legalization; market and general economic conditions of the cannabis sector or otherwise, 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 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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