Mr. Roger Dent reports

QUINSAM MONTHLY UPDATE FOR SEPTEMBER 2014: INITIATION OF QUARTERLY DIVIDEND; ANNOUNCEMENT OF "SHELL" INITIATIVE

Quinsam Capital Corp. has provided an update on activities for September, 2014.

Quinsam completed the purchase of investments in Bioniche Life Sciences Inc., Poydras Gaming Finance Corp. and Manitok Energy Inc. in September.

Bioniche is a focused, human therapeutics company with a late-stage asset for bladder cancer for which Bioniche is now preparing for the filing of a Biologics licence application, projected to be submitted prior to March 31, 2015. Quinsam participated in a unit offering by Bioniche, which included particularly attractive five-year warrants.

Poydras is an operator of slot-machine-type gambling equipment in U.S. casinos. Quinsam likes the cash-flow-generation characteristics of the business. The company recently announced a major acquisition, which Quinsam expects to sharply boost reported earnings before interest, taxes, depreciation and amortization.

Quinsam bought shares in Manitok after it announced favourable production information from its second Entice well. The stock had earlier fallen from favour after it reported its second-quarter results. Quinsam thinks that the stock will recover as more Entice well data are released.

Performance update

"Quinsam has pursed a very selective investment strategy since implementation of the company's new business plan in November, 2013. Management is of the opinion that this approach provides the opportunity for the company to earn extraordinary returns, and we believe that our performance in September, 2014, clearly illustrates the impact of the strategy," said Roger Dent, chief executive officer of Quinsam.

To provide background, September was a challenging month for small-cap stocks in Canada, with the TSX Venture Exchange declining by approximately 11 per cent, its worst performance in many months.

The company closed the month with a total portfolio of $2.6-million. As at the end of the preceding month, the unaudited total value of Quinsam's cash and equity investments was approximately $1.9-million. To give an earlier reference point, Quinsam had assets of approximately $200,000 in October, 2013. Quinsam raised net proceeds of $600,000 in November, 2013, and further net proceeds of approximately $900,000 in March, 2014, for total investable proceeds and starting assets of approximately $1.7-million.

The largest contributor to Quinsam's September performance was EnerDynamic Hybrid Technologies, which commenced trading in September. Quinsam also saw an increase in value by another of its large holdings, Nuvo Research, with lesser gains in other investments as well.

An important component of Quinsam's business strategy is the accumulation of purchase warrants at little or no cost. Quinsam now holds approximately 2.1 million warrants with an aggregate basic exercise value of approximately $1.1-million. The exercise value is not an indication of the economic value of the warrants; Quinsam provides it to investors so they can understand the amount of upside leverage that it is accumulating through its warrant portfolio. Quinsam values unlisted warrants at intrinsic value, which it sees as being a conservative approach.

Initiation of quarterly dividend

Quinsam management believes that dividends should be an important facet of shareholder returns whenever possible. Accordingly, it has been a goal of Quinsam management to have a meaningful dividend on Quinsam shares. With the impact of Quinsam's differentiated strategy being made evident in its most recent results, the board feels that the time is now right to initiate a regular quarterly dividend on Quinsam's shares.

The board has approved an initial quarterly dividend of 0.1 cent per share (0.4 cent per share per year). This represents an indicated dividend yield of 2.5 per cent based on the most recent trading price of 16 cents per share. The initial dividend will be paid on Nov. 7, 2014, to shareholders of record on Oct. 22, 2014. This dividend will not be designated as an eligible dividend for Canadian income tax purposes. Future quarterly dividends will be subject to board approval.

Announcement of shell initiative

In Canada it is a common practice for companies that wish to go public to do so by merging with an existing shell company. The owners of shell companies can generate excellent investment returns on such a transaction in the correct circumstances.

It has been a goal of the company's management for Quinsam to obtain a meaningful stake in a shell company. This is because Quinsam's management believes that it has the ability to identify and execute a successful shell transaction, and thereby generate strong investment returns.

Quinsam is evaluating a number of alternatives to obtain a meaningful stake in a shell company. In addition, the company is interested in hearing from major shareholders in shell companies that might welcome the involvement of Quinsam. Quinsam hopes to have further news on this matter in the fourth quarter.

We seek Safe Harbor.