QIS Update #1 2013 - January 4th 2013
Included in this update:
- Blackbird Energy Inc. completes acquisition of Ruger Energy Inc., files Q1 financials
- NTG Clarity Networks announces a new contract and a shares for debt private placement
- Virtutone Networks announces Q3 financial results
We’d like to take this opportunity in our first update of the year to wish all of our subscribers a Happy New Year and all the best for a healthy and prosperous 2013.
During 2012, QIS Capital’s virtual Trading Summary Portfolio gained 13.9%. Not up to our usual high standards but considering the state of the small-cap markets during 2012, a 14% return is entirely acceptable. The portfolio began the year with $50,000 and had a current market value of $56,955 as at Dec. 31, 2012. In comparison, the TSX Composite Index gained a more modest 4% during 2012, rising 478.44 points to close at 12,433.53. Small-cap stocks didn’t fare nearly as well in 2012 with the TSX Venture Composite Index shedding 263.36 points to 1,221.30 for a loss of 17.7% on the year. So overall, the QIS Capital virtual portfolio beat the Venture index by 31.6% for the year. We are carrying forward the virtual portfolio throughout 2013 as the markets have dictated longer hold periods in order to be rewarded for holding quality, value stocks.
In 2013, QIS Capital will continue to transition to Canadian Small Caps (www.smallcaps.ca). We also intend to get regular research reports written and posted to the website on a monthly basis and provide investors with more companies to read about and consider for their own investment purposes. A new research report will be available next week.
We have commenced planning for the 2013 spring Small-Cap Conference Series. The Vancouver Conference is scheduled for March 12th and the Calgary Conference is set for April 16th. We would like to have a good core group of fundamental companies at these conferences. If anyone has any suggestions or connections, we are accepting applications at this time.
We appreciate your support during 2012 and look forward to a very successful 2013.
Please feel free to email us anytime at email@example.com or call us at (250) 377-1182. We look forward to your comments, questions, and feedback.
Blackbird Energy Inc. (BBI:TSX-V)
Current Price: $0.075 (coverage commenced Aug 19/11 - $0.18)
Blackbird Energy Inc. has closed its previously announced acquisition of Ruger Energy Inc. (Ruger), a junior oil and gas exploration and development company in Alberta.
As consideration for the acquisition, Blackbird issued an aggregate of 47,143,250 transaction units to the shareholders of Ruger. Each unit consists of one common share and one-half of one share purchase warrant, for a total of 47,143,250 shares and 23,571,625 warrants. The warrants are exercisable at a price of $0.24 until April 5, 2014. An aggregate of 124,074,266 Blackbird shares are issued and outstanding following completion of the acquisition.
In conjunction with the closing, Blackbird has effected certain management changes, appointing Darrell Denney, Murray Scalf and Sean Campbell, all part of the Ruger team, to Blackbird's board of directors. The new directors replace Robert Booth, Dennis Paterson and Michael Sweatman. Mr. Denney has also assumed the position of Chief Operating Officer.
In addition, Blackbird has granted an aggregate of 4,000,000 incentive stock options to the new officers and directors and certain consultants. Half of the options will have an exercise price of $0.16 per share and the other half will be exercisable at a price of $0.20 per share for a period of five years.
Garth Braun, Chief Executive Officer and director of Blackbird, commented: We are very pleased to complete this transaction which diversifies our project base and strengthens our balance sheet. The addition of the Ruger management team positions Blackbird for the development of new opportunities, access to further capital and greater value achievement for the existing assets. I would also like to take this opportunity to thank the outgoing members of our board of directors, Robert Booth, Dennis Paterson and Michael Sweatman, for their service to Blackbird.
Blackbird Energy Inc. has also filed its financial statements and related management's discussion and analysis for the first quarter ended October 31, 2012 on SEDAR at www.sedar.com.
The closing of this acquisition gives Blackbird a significant amount of cash to participate in future drilling at Bigstone and to acquire or develop new producing properties. Management is committed to growing Blackbird into a stable producer and is taking the necessary steps to ensure future success. We expect to see further updates from Blackbird in the near future.
NTG Clarity Networks Inc. (NCI:TSX-V)
Current Price: $0.045 (coverage commenced Feb. 4/10 - $0.045)
NTG Clarity Networks Inc. has announced that the company received a Letter of Intent from a leading mobile operator in the Gulf region to implement the NTS Partner Management Portal and the purchase of its associated licenses. The contract value is approximately US$600,000 and NTG has begun the system deployment, which will be completed within the month.
We are very pleased to start the year with the award of this project as it reflects the satisfaction and confidence of our customer in our products and their functionality, said Ashraf Zaghloul, NTG Clarity's Chairman & CEO.
NTG Clarity Networks Inc. has announced that it has issued 4 million common shares of the company at a deemed price of $0.05 per share to settle indebtedness owed to employees, senior officers, directors and consultants of the company. The transaction will help NTG reduce its debts and improve its balance sheet.
The shares for debt transaction was a related party transaction within the meaning of applicable Canadian securities laws as the subscribers included directors and officers of the company that subscribed for an aggregate of 2,473,060 common shares in settlement of indebtedness of $123,653. The Board of Directors of the company (excluding the interested parties) approved the transaction. The transaction was exempt from valuation and minority approval requirements applicable to related party transactions on the basis that the value of the transaction was less than 25 percent of NTG Clarity’s market capitalization
Great to see another contract win for NTG Clarity as the company stabilizes its revenue base and returns to solid profitability. Over the past two quarters, NTG Clarity has achieved revenues of $2.6 million and earnings of $384,744 or $0.015 per share. Based on this rate, the company’s shares are trading at only 1.5 times annualized earnings.
Virtutone Networks Inc. (VFX:TSX-V)
Current Price: $0.26 (coverage commenced Sep. 9/11 - $0.10)
Virtutone Networks Inc. has recently reported its financial and operating results for the third quarter and nine months ended October 31, 2012.
Working capital as at October 31, 2012 was $284,792, as compared to working capital of $183,921 as at January 31, 2012. The Company’s October 31, 2012 working capital includes accounts receivable in the amount of $801,854, which are due from various companies. Management diligently monitors these accounts receivable amounts and reacts accordingly when the aging of such receivables becomes too old.
As at December 20, 2012, the company has 20,768,755 common shares outstanding.
|LATEST FINANCIAL RESULTS|
|3 Months Ended Oct. 31||9 Months Ended Oct. 31|
|Cost of Sales||856,758||368,624||1,544,973||1,070,255|
(as at October 31, 2012)
|Current Assets||$ 1,128,583|
Virtutone showed a significant jump in revenues during Q3 but incurred several new costs related to the Wholesale Division along with about $75,000 worth of toll fraud discovered in September. Management is working to reduce costs and is working on a number of new contracts or service agreements which will hopefully build both revenues and earnings for fiscal 2013.
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 624,000 shares of Audiotech Healthcare Corporation and 357,000 shares of NTG Clarity Networks Inc. 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 - 2012 QIS Capital Corporation.