Mr. Roger Dent reports

QUINSAM REPORTS Q2/2023 RESULTS

Quinsam Capital Corp. has released its Q2 2023 results, with a net loss of $900,000 (one cent per share basic, one cent fully diluted) versus a loss of $4.6-million (five cents per share basic, five cents fully diluted) in Q2 2022. Investors can access the company's full financial statements on SEDAR+.

"At June 30, 2023, we had net assets of approximately 14 cents per share outstanding," said Roger Dent, chief executive officer. "Our shares continue to trade at a very steep discount from NAV [net asset value]."

After a very difficult year in 2022, 2023 appears to be showing the beginning of a stabilization in small-cap markets. While enthusiasm remains muted, the environment appears more constructive than it was in 2022.

Value creation strategy

Quinsam shares have traded at a discount to NAV in recent years. In an effort to secure a valuation for its shares that is at NAV or perhaps at a premium to NAV, Quinsam has previously announced that it is pursuing a strategy to attempt to realize its underlying economic value.

In current capital markets, capital is very scarce for small-cap companies. If Quinsam is able to convert its portfolio to liquid assets, Quinsam believes that it may be able to secure a valuation in excess of NAV as part of a merger or reverse takeover with a private company.

Accordingly, Quinsam continues efforts to exit its illiquid investments and look for transactions that have the potential to create significant shareholder value. Quinsam believes that it is prudent to exit its illiquid investments in a patient and careful way. Accordingly, this process will likely take in excess of one year. It is a goal to continue to try to grow NAV while this process is under way through investment in liquid vehicles.

In Q2 2023, Quinsam disposed of approximately $500,000 in legacy investments and increased its cash balance. Efforts to dispose of investments continue in Q3 2023.

Quinsam is also pleased to announce that it received tax refunds totalling approximately $758,000 in Q3 2023. This has increased its cash balance but is not expected to impact Q3 2023 NAV.

The search for a value-creating transaction has begun. Quinsam anticipates that it may take some time to find a suitable, value-creating transaction. Further announcements will be made on the status of such steps which are subject to all applicable shareholder and regulatory approvals.

Issuer bid

In Q2 2023, Quinsam acquired 872,000 shares pursuant to its issuer bid to acquire up to 4,916,605 shares that commenced on Sept. 6, 2022, and will terminate on Sept. 5, 2023. To date, the company has acquired 1,388,000 shares pursuant to this issuer bid.

Quinsam has repurchased and cancelled over 20 million shares since 2018 pursuant to its issuer bids, resulting in significant NAV per share accretion for remaining shareholders.

Quinsam wishes to announce a new issuer bid to purchase up to 4.8 million of its common shares. 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. The company will commence the bid on Sept. 6, 2023. The bid will terminate on Sept. 5, 2024, 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 Research Capital to act as the broker through which the bid will be conducted.

Investor call

An investor call will be held at 9 a.m. Eastern Time on Friday, Aug. 24, 2023, by Zoom.

Meeting ID: 848 8801 1604

Passcode: 086941

About Quinsam Capital Corp.

Quinsam is a merchant bank with a focus on small-cap investments which it believes are undervalued. The company does not invest on behalf of third parties or offer investment advice.

We seek Safe Harbor.