Professional Documents
Culture Documents
CORPORATE OVERVIEW
Fall 2016
DISCLAIMER
These materials include certain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Other than statement of historical fact,
all statements in this material, including, without limitation, statements regarding fair
values of marketable securities, investments, bridge loans, convertible debentures,
estimated asset retirement obligations, and future plans and objectives of the Company,
are forwardlooking statements that involve various known and unknown risks,
uncertainties and other factors. There can be no assurance that such statements will
prove accurate. Actual results and future events could differ materially from those
anticipated in such statements. Readers are cautioned not to place undue reliance on
these forward-looking statements that speak only as of the date of these materials.
Important factors that could cause actual results to differ materially from the Companys
expectations include, without limitation, the level of bridge loans completed, the nature
and credit quality of the collateral security, the sufficiency of cost estimates for
remaining reclamation obligations as well as those factors discussed in the Companys
documents filed from time to time with the TSX Venture Exchange, Canadian securities
regulators and other regulatory authorities. All subsequent written and oral forwardlooking statements attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by this notice.
2
1) We provide the average investor the opportunity to access prepublic deals that are typically only available to institutional
investors.
2) We give private companies the growth capital and advisory services
necessary to prepare them to access publicly raised capital.
3) Management and Board Members of Fountain are aligned with our
Shareholders to continue to create Shareholder value - we have our
own skin in the game.
The Company uses limited leverage and has enough fixed income
cashflow to cover all operating expenses.
As a result, Fountain is positioned well to benefit in down markets.
The portfolio investment strategy is achieving positive results in
relation to typical index benchmarks.
The deal pipeline continues to demonstrate similar investment
opportunities.
Unique
Origination
Sources
Skin in the
Game
Hands On
Approach
Extensive
Experience and
Relationships
public
high margin product
line
growing revenues
pre-public,
cashflowing
2016
2015
strong balance
sheet
public, cash
flowing
Syndicated follow
up $11.5mm
investment in2014
2015
public, profitable
disrupting sugar
Fountain management
hands on in restructuring
accretive acquisition
strategy
public, profitable
INVESTMENT THESIS
Later stage companies with a six month to two year horizon from being
public
Committed, experienced, and reputable management teams
Companies with growing revenues with significant upside growth to be
facilitated by our capital and advisory support
Market Capitalization $ mm
75
50
IPO
MARKET OPPORTUNITY
In recent years, there has been a void in the North America marketplace for small
companies to procure adequate and timely financing to fund the growth of their
businesses.
Further, much of the Canadian based small cap activity has been focused
throughout the last 10 years on resource based investments that has created an
underweight position in non-resource based companies in the Canadian capital
markets environment.
Additionally, pension funds and similar institutional investors are looking at
investing a minimum of $15 million which does not fit the criteria for most small
cap companies. Further, the institutional investors are looking for target
companies that have minimum market capitalization $100+ million putting it out
of the reach for many companies seeking financing .
Micro Cap
Middle Cap
Deal Size
$1mm
10
DISCIPLINED EXECUTION
Ability to analyze before entering transactions the downside risk and viability to exit, refinance or
asset disposition
Disciplined due diligence and active monitoring designed for small and middle market companies
Viability of concept and knowledge of asset classes and capital market operations
Validate exit scenarios before funding easy to get into a deal, challenge is to get out
Proven exit strategies and predictability of downside recovery valuation
11
F
A
B
U
Y
Fountain sold
throughout 2015 &
2016
12
A private transaction for Fountain in late 2013, and funded until today.
Advantagewon finances auto repair loans, and uses the RSLA (Repair Storage Lien Act) to get automatic
first security on the vehicle. 40%+ return on the average loan.
RSLA lien allows Advantagewon to REPO the car within ~60 days of a missed payment. No exceptions.
Approval for a loan is done within seconds online. All you need to input is your VIN and mileage, and 50%
of the value of the vehicle is automatically approved for a loan.
Dealers are easily sold on offering the Advantagewon financing to their customers, as it allows them to
keep the business they otherwise have to turn away, with no skin off their back.
Fountain has invested over $3mm into Advantagewon, and recently secured an institutional facility to
fund Advantagewons hockey stick growth.
Fountain is a significant debt provider and equity holder in Advantagewon.
ed
und
o
p
om
%C
0
0
ar 5
3 ye th Rate
Grow
13
SUCCESFULL EXITS
Selection of our Successful Exits
The Intertain Group Ltd.
VIQ Solutions
Poydras Gaming Finance Corp.
3TL Technologies Corp.
Royal Nickel Corp.
Kids Futures Inc.
Victhom Human Bionics Inc.
Adoption Technologies Corp.
Iseemedia Inc.
ESI Entertainment Systems Inc.
Homeland Energy Group Ltd.
IOU Financial Inc.
W3 Solutions Inc.
14
FOUNTAIN STOCK
COMPELLING STOCK PRICE TODAY
Book Value
Q2 Book Value
As of Q2, Fountains audited Book Value was $0.21 per share.
Tax Shelter 26mm
In addition there is a $26mm capital tax loss benefit, which
Total Book Value
increases the book value to $0.30 per share.
AT THE CURRENT MARKET PRICE OF $0.21, OUR STOCK IS
Book Value/Share
TRADING AT A DISCOUNT TO OUR BOOK VALUE.
Additional Value
0.21
$ 13,338,728
$
2,600,000
$ 15,938,728
$
0.30
29%
The above stated 30c Book Value does not include additional value we expect to unlock on some of our
holdings which include:
1) Financing Company: we own a convertible option for 50% of a car repair financing company called
Advantagwon Inc., which has a growing national portfolio and profitable operations.
2) Slot Machine Company: We own significant equity stake in TSXV listed Poydras Gaming Finance Corp., a
slot machine company tracking to hit $10mm EBITDA for 2016 and just completed a $30mm refinancing.
3) Oil Company: Slated to go public in Q4 2016, and Fountain holds a high yielding securitized convertible
debt in this Texas based company.
15
SUMMARY
Experienced Management team with long term relationships
within North Americas investment, brokerage, legal and
accounting sectors thus creating multiple channels of deal flow.
Fountain takes a hands on approach in all investments made,
leveraging management's expertise to optimize the operations
and capital structure of all their investee companies.
Capital tax-loss benefits of $26 million (acquired) to shield
future profits for the benefit of shareholders.
Investors have an opportunity to participate in private late
stage, high growth companies at attractive valuations prior to
an IPO.
.
18
CORPORATE INFORMATION
Authorized Capital Stock
Unlimited Subordinate Voting Share (1 vote per share)
Unlimited Multiple Voting Shares (4 votes per share)
Issued and Outstanding
Subordinate voting shares 53.02 mm
Multiple voting shares
1.03 mm
Total shares54.05 mm
Auditors
Collins Barrow
Register & Transfer Agent
Equity Financial Trust
Exchange & Symbol
FA on the TSX Venture Exchange
Corporate Address
25 Adelaide St. East, Suite 1300, Toronto M5C 3A1
Corporate Website
www.fountainassetcorp.com
19
20