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FOUNTAIN ASSET

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 forward-looking statements attributable to
the Company or persons acting on its behalf are expressly qualified in their entirety by this notice.

FOUNTAIN ASSET OVERVIEW


WHAT MAKES FOUNTAIN A COMPELLING INVESTMENT?

1) We provide the average investor the opportunity to access pre-public 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.

FOUNTAIN INVESTMENT HIGHLIGHTS

Stable Financial
Position

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.

Rising Portfolio
Value

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

Management, the Board and key investors provides the Company with unique,
non-competitive deal flow channels.
Disciplined underwriting standards causes Fountain to be very selective of the
transactions that are funded.

Skin in the Game

Management and the Board are aligned with Fountain shareholders to


continue to create shareholder value.
The Company has acquired capital loss carry-forwards of $26 million to shield
future profits for the benefit of shareholders.

Hands On
Approach
Extensive Experience
and Relationships

Fountain takes a hands on approach in all investments made, leveraging


management's expertise to optimize the operations and capital structure of all
out investee companies.
Fountain has over 100+ years of combined experience in investments, capital
markets, finance and operations.
Long term relationships with North Americas investment, brokerage, legal and
accounting sectors that benefits the Company.
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FOUNTAINS RECENT ACTIVITY AS IT


CONTINUES TO BUILD
The company has been consistently funding transactions to build a portfolio of
opportunistic, value creative private and publicly traded positions.

public
high margin product line
growing revenues

pre-public, cashflowing

2016

2015

strong balance sheet


public, cash flowing
Syndicated follow up
$11.5mm investment
in 2015

2014

public, profitable

disrupting sugar
Fountain management hands
on in restructuring
accretive acquisition strategy

public, profitable

INVESTMENT THESIS

FOUNTAIN INVESTS IN SMALL TO MIDDLE MARKET COMPANIES WITH PROVEN


PRODUCTS, MARKET PENETRATION AND STRONG MANAGEMENT TEAMS THAT ARE
TOO SMALL FOR PRIVATE EQUITY FUNDS THAT GENERALLY DO NOT INVEST LESS
THAN $15 TO $25 MILLION PER DEAL.
Our target investment profile includes:

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

PROFITING FROM PRIVATE TO PUBLIC


VALUE STEP-UP

Market Capitalization $ mm

Fountains management team is uniquely positioned to support small to middle market


companies in pursuing their IPO plans. In particular, the management team comprises
people who have directly represented and/or work closely with local and foreign
investment banks.
Private to Public Value
Arbitrage

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Public Listing Preparation


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Pre Listing Investment

6 18 Months Pre IPO

IPO

6 12 Months Post IPO

FOUNTAIN VALUE PROPOSITION

Prior to closing any investment, Fountain works closely with the investment
bankers in order to obtain direct feedback as to the viability and best approach for
an IPO.

Consol Asset Group

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 nonresource 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.

Fountain is uniquely positioned to leverage the current market void that


does not address the capital requirements of small and mid cap
companies in North America

THE COMPETITIVE LANDSCAPE


Deal Size
$25mm

Micro Cap

Middle Cap

Deal Size
$1mm

Fountain has the opportunity to develop its niche brand in


the small and middle market
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KEY CHARACTERISTICS OF A TRANSACTION

Solid Businesses

Value Creation Discipline

Mitigate Downside Risk

Visibility to Exit

Proactive Monitoring

Portfolio Diversification

Technology, infrastructure, business model barriers with identifiable moats


Profitable, or near profitable with compelling action plan
Experienced management with skin in the game
Typical initial lending focus with equity upside along the capital raising trajectory
Conservative multiples at entry focus on private / public arbitrage strategy
Financial and other covenants for protection, re-pricings
Ascertain strong asset coverage if warranted liens and security in the capital structure
Viability to a number of liquidity events within a reasonable time period
Partner with strategic investment banks to promote relevant channels
Ascertain pre-funding acceptable exit strategy and not leave to chance

Implementation of ongoing monitoring and diligence disciplines


Representation on the Board if warranted
Validate operational and financial risk and control framework
Niche opportunities to maintain overall portfolio diversification is a focus
Industry agnostic, look to fundamentals
Manage risk on portfolio basis

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DISCIPLINED EXECUTION

Deal Origination and Selection

Active pipeline of investment opportunities generated by proactive sourcing and an established network
Selection process driven by extensive criteria in areas of quality of earnings, asset validation, business assessment, market
acceptance , management pedigree and ability to execute

Risk Management - Preservation of Capital Over Profits and Fees

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

Implementation and Exits

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

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SAMPLE PUBLIC PORTFOLIO INVESTMENT


INTERTAIN GROUP LIMITED

A pre-IPO transaction for Fountain in late 2013.


The global online gambling sector is flourishing today and a handful of Canadian firms have seized the opportunity ahead of
much-anticipated worldwide legalization and have reaped the rewards of getting in early. Intertain Group is one of them.
Intertain Group offers online games through its subsidiary CryptoLogic Operations Limited, under two brand names; InterCasino
and InterPoker. The company boasts 9,000 daily users on one of its sites alone, 3 million registered users and state that over
US$25 billion has been wagered across their sites to date.
This Fountain invested in Intertain pre-IPO in 2013 experiencing a 3x return only one year after. Fountain monitored the position
throughout and exited parts of our position throughout 2015 and 2016. This is an example of Fountain realizing the private to
public arbitrage strategy.

FA
BUY

Fountain sold
throughout 2015 & 2016

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SAMPLE PRIVATE PORTFOLIO INVESTMENT


ADVANTAGEWON REPAIR INC

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.

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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.

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FOUNTAIN STOCK
COMPELLING STOCK PRICE TODAY
Book Value
As of Q2, Fountains audited Book Value was $0.21 per share.
In addition there is a $26mm capital tax loss benefit, which
increases the book value to $0.30 per share.
AT THE CURRENT MARKET PRICE OF $0.21, OUR STOCK IS
TRADING AT A DISCOUNT TO OUR BOOK VALUE.

Current Stock Price

0.21

Q2 Book Value

13,338,728

Tax Shelter 26mm

2,600,000

Total Book Value

15,938,728

Book Value/Share

0.30

Stock Price Discount to Book Value

29%

Additional Value
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.

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MANAGEMENT TEAM AND


BOARD OF DIRECTORS
Fountain is integrated an experienced and disciplined team of investment and finance professionals
to lead the growth the company. Our combined 100+ years of experience and networks generate
proprietary transaction opportunities and unique market intelligence.
Jason G. Ewart. Chief Executive Officer & Director. Mr. Ewart has been the Chief Executive Officer of the Company since
June 2004, as well as Director and Chief Operating Officer since July 2003. Mr. Ewart was a market analyst with A&E
Capital Funding Inc. and Bradstone Equity Partners Inc. between 1998 and 2002 and Vice-President of Quest
Investment Corporation between 2002 and 2003. He has experience with bridge financing, financial analysis,
quantitative modeling, equities trading and mergers and acquisitions. Mr. Ewart holds an economics degree from
McGill University.
Steven Haasz. Chief Financial Officer: Mr. Haasz has over 15 years of experience working in the financial sector across
North America. Mr. Haasz is the founder of Consol Asset Group, a boutique investment bank specializing in mergers
and acquisitions, secured lending, business restructurings, and corporate finance transactions. Mr. Haasz has held
similar roles in managing companies representing aggregated annual sales of over $200 million and 2,500+ employees
and has worked throughout North America in secured lending. Previously, Mr. Haasz worked at KPMG Audit and KPMG
Business Transformation Services.
Eric Prisman. Senior Analyst: Erics primary responsibilities are modelling investment targets, structuring deals, and
assisting in the financial & operational advisory for Fountains portfolio companies. Prior to working at Fountain, Eric
worked in the risk consulting practice at PwC where he consulted for Schedule I banks on how to manage credit risk
within the constraints of updated regulatory requirements. Eric also worked in the valuations group where they value
fixed income and derivative securities for a variety of clients in the mining, industrial, and financial industries.
Previously, Eric worked on the equity derivatives desk at National Bank Financial and in the credit risk group at TD
Bank. Eric has a Master of Mathematical Finance from the University of Toronto.
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MANAGEMENT TEAM AND


BOARD OF DIRECTORS
Cesare Fazari. Independent Director. Based in Toronto, Mr. Fazari is a co-founder of Northwood Developments Inc., a
diversified commercial construction company that has been working in the greater Toronto area since 1991. Their client
base includes Oxford Properties and Shoppers Drug Mart.
Paul Kelly. Independent Director. Based in Toronto, Mr. Kelly has experience within the North American steel industry. He
was the former President and Chief Executive Officer and a director of Slater Steel Inc., from May 1998 to May 2004.
Slater steel was a multidivisional specialty steel company formerly listed on the TSX. Mr. Kelly was President, Chief
Operating Officer and a director, from June 2004 to September 2007, of Harris Steel Group Inc., a multidivisional fabricator,
manufacturer and steel trading group formerly listed on the TSX. He has experience in dealing with public markets as well
as an extensive background in M&A and financial structuring. Mr. Kelly is also the Chief Executive Officer, Chief Financial
Officer and director of Corporate Catalyst Acquisition Inc. a TSX Venture Exchange listed capital pool company. Mr. Kelly
obtained a B.A. degree in Economics from the University of Toronto.
Alec Regis. Independent Director. Mr. Regis is presently the asset manager at StoneCap Realty Partners Inc. StoneCap
Realty Partners manages, on behalf of its institutional clients, multifamily real estate holdings, retail investments and
purpose-built student-housing properties located in major Canadian markets, including the Greater Toronto Area,
Edmonton and Montreal.
Morris Prychidny. Independent Director. Mr. Prychidny is a Chartered Accountant with more than 35 years of experience in
the mining and real-estate industries. Mr. Prychidny brings strong portfolio management and financing expertise through
his roles in a number of publicly-listed investment and mining companies. He is currently a director of Nighthawk Gold
Corp., a Canadian-based exploration company focused on acquiring and developing gold mineral properties in the NWT,
Canada. He is also a director and Secretary-Treasurer of Orion Capital Incorporated, a Toronto-based asset management
company with a focus on investing in the junior mining and real estate sectors. Mr. Prychidny is also a Director and an
Audit Committee member of Northfield Capital Corporation, a public corporation with investments in excess of $100
million predominantly in the mineral resource sector. Mr. Prychidny holds a Bachelor of Economics from the University of
Western Ontario.
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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.
.

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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
Multiple voting shares
Total shares

53.02 mm
1.03 mm
54.05 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

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FOR MORE INFORMATION, PLEASE CONTACT


Jason Ewart; CEO Fountain Asset Corp.
jewart@fountainassetcorp.com
416-580-0721
Eric Prisman; Senior Analyst Fountain Asset Corp.
eprisman@fountainassetcorp.com
647-818-7749
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