Quinsam Capital (CNSX:QCA) said its second quarter was “okay,” with the company reporting a profit, repurchasing additional shares and seeing limited trading activity in its portfolio. Management said it has cash available for deployment and is continuing to shift a larger share of assets into its liquid portfolio.
During the company’s second-quarter conference call, management said the third quarter had begun modestly positively, citing gains in EDM Resources, BluMetric and Reflex. Reflex was described as having recorded a particularly strong move, although management noted it is not a large position. Management estimated that, as of the date of the call, the portfolio could be up roughly C$0.02 to C$0.03 in the third quarter.
Peninsula Capital listing seen as key third-quarter event
Peninsula Capital operates in the U.S. single-family home rental market, with a portfolio concentrated in areas including Buffalo, Rochester and Cleveland, management said. The properties are generally located in former Rust Belt communities where homes were acquired at relatively low prices and have favorable rental economics.
Management said Peninsula Capital had initially been expected to list in August, but the timing may shift into September. The company is expected to launch with a dividend and a net asset value of approximately C$2 per share.
However, management said the eventual trading price remains uncertain, noting that the company could trade below net asset value because it has been privately held for a long time and may face selling pressure. Still, management described the underlying assets as strong and said it remains confident in the investment as a holding.
The listing would move nearly C$0.02 of value from Quinsam’s private portfolio into its public portfolio, making it a significant event for the company’s asset mix, management said.
Other private investments may list
Quinsam also expects several smaller private investments to pursue public listings. Pelican AI, which had previously been expected to list, could begin trading in the third quarter, management said. The investment is not large but is expected to generate a gain.
Longview Gold has also announced plans to go public, with management suggesting its listing is more likely to occur in the fourth quarter. In addition, Bond Intelligence, an investment valued at about C$250,000, is hoped to list in the fourth quarter, although management said the timing is not certain.
- Pelican AI: Expected to potentially trade during the third quarter.
- Longview Gold: Public listing viewed as a likely fourth-quarter event.
- Bond Intelligence: Potential fourth-quarter listing, subject to timing uncertainty.
Management said it expects all three investments to have a positive effect on net asset value if their anticipated listings proceed.
Bond Intelligence had considered a transaction involving Quinsam but instead chose to pursue a conventional shell with few assets, management said. While the discussions did not advance far, management said it continues to view the business favorably. Its announced go-public transaction is at twice the valuation Quinsam paid for its C$250,000 investment, according to management, subject to the company successfully completing its financing.
California Nano pursuing nuclear-related contracts and funding
In response to an analyst question, management provided an update on California Nanotechnologies, where it said it is optimistic about potential commercial contracts in the small modular reactor market. Management said California Nano believes it may be the only viable supplier of boron carbide control rods and heat shielding using its spark plasma sintering technology.
Management said the California operating entity, which is a subsidiary of the listed company, has been in discussions with more than one U.S. small modular reactor developer. It has also submitted applications for U.S. government funding, citing federal interest in domestic supply chains for critical industries.
Management cautioned that neither funding nor commercial contracts have been secured and that their timing is outside the company’s control. It nevertheless said it believes the company has a strong case for support and potential orders.
California Nano previously supplied boron carbide control rods to Valar, a small modular reactor company, after Valar needed components for a U.S. Department of Energy testing window at a national laboratory. Management said California Nano delivered the rods within three or four weeks, the test succeeded, and discussions with Valar and other potential customers have continued.
Management said the control rods are consumable components that wear out during ongoing reactor operations. While no commercial small nuclear reactors are currently in operation, management said developers are targeting future uses including data centers amid rising electricity demand.
Share repurchases continue
Quinsam repurchased additional shares during the second quarter, reducing its share count. Management said it views the issuer bid as an opportunity to buy the company’s portfolio at what it characterized as a substantial discount to its value.
However, management said executing repurchases can be difficult because of Canadian Securities Exchange rules and Quinsam’s relatively illiquid trading activity. The company remains interested in buying more shares, management said.
About Quinsam Capital (CNSX:QCA)
Quinsam Capital Corporation operates as an investment and merchant banking firm in small-cap market in Canada. The company primarily focuses on cannabis-related investments. Its activities include acquisitions, advisory services, lending activities, and portfolio investments. The company was incorporated in 2004 and is based in Toronto, Canada.
