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QIS Update #1 2012 - January 4th 2012

Included in this update:

  • Virtutone Networks releases third quarter financial results
  • Congratulations to the winners of the 2011 QIS Stock Challenge


We are pleased to congratulate the winner of the 2011 QIS Capital Stock Challenge - Bobwins! After a rough year in the markets, just a few of the contestants were able to post a gain during the 2011 Stock Challenge. Finishing in second was Intuition while joshpacific rounded out the top 3. Congratulations to all of the winners - We will be sending email notifications of your prizes shortly. View the complete results on the website at:


Due to declining interest in the QIS Stock Challenge, likely due mainly to the lackluster performance of the Canadian Small-Cap Market, we will not be running a 2012 Stock Challenge. Instead we will be going back to the popular QIS Capital Trading Summary and will be starting trading soon with a virtual portfolio of $50,000. There are lots of great investment opportunities out there, so check back often to see how the QIS Trading Summary is doing. We should be up and running in the next 2 weeks.


QIS Capital would like to wish everyone a Happy and Prosperous New Year and all the best in 2012!! I have to say that it’s been several years since I was this excited about a new investment year. While I would expect the general market to continue to be dogged by global economic concerns, I have very high expectations for the majority of the companies for which we are currently providing full coverage.


Here are just a few of the items we are looking forward to in 2012:


  • Blackbird Energy should be at or close to total depth in its second high-impact well. This well is expected to produce up to 3X more than the last well which tested over 1,000 boepd (25% working interest). Production testing results are expected to be released in the 3rd week of January.
  • Cobra Venture completing its asset sale and having almost $0.50 per share in cash and investments. The company is diligently working on new opportunities to replace the previous royalty stream. Cobra is presently trading at half of cash value upon successful completion of the transaction.
  • Dalmac Energy posting strong Q3 and Q4 numbers (Apr 30 year-end). The company is currently trading at less than 4 times expected earnings.
  • Audiotech Healthcare continuing its strong financial performance and possible takeover.
  • Virtutone Networks continuing its trend of positive financial performance while showing increases in Q4 and beyond from its latest acquisition and new developments. This story should emerge considerably during 2012.

    Buy or Selling Real Estate in 2012?

    QIS Capital is also actively involved in the Real Estate industry and is offering, through Century 21 Desert Hills Realty, a $500 Cashback reward for any readers who book their local agent with us. Whether you have already selected who you wish to work with, or if you would like us to refer your agent, we will make the arrangements and provide you with a $500 Cashback upon the successful sale or purchase of your home. Please call Doren Quinton at QIS Capital at 250-377-1182 for more details. We will be adding this section to our new website in early 2012.


    Virtutone Networks Inc. (VFX:TSX-V)
    Current Price: $0.135 (coverage commenced Sep. 9/11 - $0.10)


    Virtutone Networks Inc. has reported its third quarter 2011 financial results. The company derives its income from the initial sale of FTAs, ATAs, and IP phones, which is supplemented with recurring monthly revenue generated from phone lines, fax lines and various other services. Monthly service and activations of $648,015, product sales of $59,904 and interest of $9,504 during the three month period ended October 31, 2011 resulted in total revenue of $717,423. This revenue was offset by cost of services provided and products sold in the amount of $368,624 and resulted in a gross profit before expenses of $348,799. Total revenue for the three month period ended October 31, 2010 was $1,076,581 and gross profit before expenses was $461,299. The decrease in revenue and gross profit was due primarily to revenue generated by the company’s Field Services Division (FSD) in the third quarter of the prior year to complete the Cash Store Financial rollout.


    During the third quarter, the company completed a non-brokered private placement by issuing 4,000,001 common shares for proceeds of $300,000. Of the shares issued, 2,938,668 were subscribed for by insiders of the company. This has allowed Virtutone to return to positive working capital, which management believes will be sufficient to enable the company to operate effectively and to carry out its growth strategy for the foreseeable future.


    As at October 31, 2011, Virtutone had a working capital position of $250,854 or $0.014 per share, as compared to the July 31, 2011 working capital deficiency of $50,270.


      3 Months Ended Oct. 31 9 Months Ended Oct. 31
      2011 2010 2011 2010
    Revenues $717,423 $1,076,581 $2,030,412 $1,991,042
    Cost of Sales 368,624 615,282 1,070,255 1,200,343
    Gross Margin 348,799 461,299 960,157 790,699
    Expenses 284,320 350,717 756,478 960,603
    Net Income 64,479 110,582 203,679 (169,904)
    per share $0.004 $0.007 $0.014 ($0.010)



    (as at October 31, 2011)
    Current Assets $ 679,658
    Total Assets 1,101,034
    Current Liabilities 428,804
    Long-Term Debt nil
    Shareholders' Equity 672,230

    QIS Capital Comments:


    This is the company’s 5th consecutive profitable quarter and has established the recurring revenue stream from previous contracts. The fourth quarter is expected to show an incremental increase in revenues and earnings from the Transcendent Global acquisition. Virtutone has also dramatically improved its balance sheet over the past year and remains debt free with positive working. The company continues to work on a number of new developments which are expected to bolster the top and bottom lines in 2012.



    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. 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 345,500 shares of Virtutone Networks Inc. QIS Capital has 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 - 2012 QIS Capital Corporation.

    Canadian Small Caps

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

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

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