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QIS Update #1 - 2017 - Fairmont Resources closes financing and Quattro Exploration and Production provides corporate update - February 6th 2017



Included in this update:
  • Fairmont Resources closes financing
  • Quattro Exploration and Production receives receivership application notice





Spring 2017 Conferences

We have selected some dates for our Spring 2017 Small-Cap Conferences to be held this year.  The Calgary Small-Cap Conference will take place on April 10 at the Coast Plaza Hotel & Conference Centre and the Vancouver conference will be held on May 4 at the Vancouver Convention Centre.

The conference website has been updated and is open for registration to attend the Spring 2017 Small-Cap Conferences.  Investors can sign up to attend this year's events for free at http://www.smallcapconference.ca/register.

 

 
New QIS Feature Company

This week we will be publishing a new QIS Feature Company!  It's been a while since we introduced a new company after our successful introduction to Fairmont Resources last February.  The new Feature Company is another near term producer in the mining sector with a strong focus on short-term cash flow.  The shares are currently trading under $0.05.  Watch for our new report later this week.

 

Please feel free to email us anytime at info@smallcaps.ca or call us at (250) 377-1182. We look forward to your comments, questions, and feedback.



Fairmont Resources Inc. (FMR:TSX-V) 

Website: www.fairmontresources.ca 
Current Price: $0.095 (coverage commenced February 18/16 - $0.025)

Fairmont Resources Inc. has reported that it has closed the final tranche of its previously announced private placement financing by issuing 2,142,857 units (the "NFT Units") at a price of $0.07 per NFT Unit for gross proceeds of $150,000. Under the entire financing, Fairmont issued a total of 1,425,000 flow-through units (the "FT Units") for gross proceeds of $114,000 and 2,142,857 NFT Units for gross proceeds of $150,000.

Each NFT Unit is comprised of one non-flow-through common share of Fairmont and one common share purchase warrant (a "NFT Warrant"), with each NFT Warrant entitling the holder to purchase one additional common share at $0.15 per share for a period of two years from the date of issue.

 

The NFT securities issued under the financing will be subject to resale restrictions expiring May 22, 2017. The previously closed FT securities (See release of December 30, 2016) are subject to resale restrictions expiring May 1, 2017.

 

No finder's fees were paid on this financing.

The proceeds from the NFT private placement will be used for general working capital.

QIS Capital: Based on our recent conversations with management, there is lots to come for Fairmont over the next few months.  The company is currently working on a number of funding initiatives to complete the Grabasa acquisition in Spain and to get new activity and potential sales from its Canadian properties.  Stay tuned...




Quattro Exploration and Production Ltd. (QXP:TSX-V)

Website: www.qxp-petro.com
Current Price: $0.06 - HALTED - (coverage commenced Sep. 3/15 - $0.08) 

Quattro Exploration and Production Ltd. has announced that it it has signed a binding term sheet with Advisco Capital Corp. ("Advisco"), a New York-based private finance company, for the provision by Advisco of a secured revolving credit facility and secured term loan in the aggregate amount of CDN$15,000,000 (the "Proposed Loan"). The Proposed Loan has been negotiated with Advisco for the purpose of satisfying all amounts outstanding to the Company's senior secured lender, The Business Development Bank of Canada (the "Lender" or "BDC").

The Loan consists of (a) Secured Revolving Credit Facility in an amount not to exceed eighty percent (80%) of the Company's eligible accounts receivable, and sixty percent (60%) of the orderly liquidation value of eligible inventory on hand, and (b) a Secured Equipment Term Loan in an amount not to exceed sixty-five percent (65%) of the orderly liquidation value machinery, equipment, and other tangible property. The Proposed Loan bears interest at the rate of 1% per month, plus a 2% fee on the aggregate amount of Proposed Loan, payable at Closing. The Proposed Loan is for a one (1) year term, with an option to renew for an additional one (1) year term, provided the Company is not in default, at a cost of one percent (1.0%) of the gross amount of the Proposed Loan then outstanding.

 

Management of Quattro believes that the Proposed Loan, along with other negotiated non-core asset transactions will allow the Company to submit an equitable plan to its creditors and exit from its current Companies' Creditors Arrangement Act ("CCAA") process.

 

The Company also provides the following report on its CCAA process, the activities to date in regards to Quattro's Court of Queen's Bench of Alberta approved proposed sale and investor solicitation process ("SISP") that was initially launched on October 3rd 2016.

 

On January 5, 2017, the stay of proceedings under the CCAA for Quattro was extended to February 17, 2017. In connection with the stay, Quattro entered into a term sheet with its senior lender (the "Lender") whereby the Lender agreed to provide an additional $650,000 of debtor-in-possession financing to Quattro (the "Interim Financing"), bringing the total amount of debtor-in-possession financing under the CCAA to an aggregate $1,900,000 (the "Interim Financing Agreement"). The additional debtor-in-possession financing was approved by the Court pursuant to the CCAA process. The term of the additional loan was due to expire on March 20, 2017. $440,000 had been advanced by the Lender under the Interim Financing Agreement to date.

 

In the assessment of the Lender and the Monitor, the Proposed Loan and the additional efforts of the Company to satisfy the BDC debt did not meet the conditions of the Term Sheet and, in accordance with the terms of the Term Sheet, BDC was entitled to (a) reject the provision of the remaining Interim Financing and (b) make an application to the Court upon 24 hours' notice to Quattro and the Monitor, for the appointment of a Receiver. On January 31, 2017, Quattro was served such notice of an application by BDC to occur on February 2, 2017 at 9:30 a.m.

QIS Capital:  This is a significant disappointment for us.  We have stayed in close contact to management throughout this process and were assured several times that everything was proceeding according to plan.  We have not been able to get a response from management over the past several weeks so the recent news didn't catch us totally by surprise.  We will issue an update once we have had a chance to speak with management.  There certainly is the chance of being able to pull the necessary financing to satisfy BDC but it isn't looking promising given the notice served and the appointment of a receiver.





Disclaimer: This article is for informational purposes only. The information contained within this article should not be construed as offering investment advice. Those seeking direct investment advice should consult a qualified, registered, investment professional. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. The company profiled assumes no liability for the information presented. This is not a direct or implied solicitation to buy or sell securities. Readers are advised to conduct their own due diligence prior to considering buying or selling any stock. The author(s) owns directly or indirectly 571,000 shares and 350,000 warrants of Fairmont Resources Inc., and 168,000 shares of Quattro Exploration and Production Ltd. QIS Capital may have a financial relationship with these companies and may trade in the stocks mentioned. No stock exchange has approved or disapproved of the information contained herein. Copyright © 2003 - 2017 QIS Capital Corporation.


Canadian Small Caps

 
Canadian Small Caps

CLICK HERE to view the presentations from the Spring 2016 Small-Cap Conferences.

We are pleased to publish the PowerPoint presentations from The Small-Cap Conferences that were held in Calgary on March 30, 2016 and in Vancouver on May 3, 2016.

We encourage investors to review the presentations and contact the companies with any further questions.

www.smallcapconference.ca/presentations.php
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