Call us : (250) 377-1182
facebook twitter linked-in
Deer Horn Capital ntg lux international frontier

QIS Update #12 2013 - June 5th 2013

Included in this update:

  • NTG Clarity Networks awarded a $3.8 million contract
  • Virtutone Networks announces May 2013 wholesale revenue of $2.58 million, files Q4 financial results



We’ve seen a pretty good run on quality fundamental companies over the past 12 months while resource based stocks continue to lag behind. There is still lots of value out there which isn’t being recognized but overall those investing in fundamental companies have been rewarded. We are very pleased with the recent improvement in the share value of NTG Clarity, C-Com Satellite, Questor Technology, and Virtutone Networks – all companies we currently follow or have followed in the past. These small-cap fundamental stories sometimes require a great deal of patience and boredom as you wait for them to trade but if you look at performance over a longer period of time, we continue to believe that value wins in the end. Good luck to all investors!


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


NTG Clarity Networks Inc. (NCI:TSX-V)
Current Price: $0.165 (coverage commenced Feb. 4/10 - $0.045)


NTG Clarity Networks Inc. has announced that the company has received a Letter of Intent from a leading mobile operator in the Gulf region to provide software development resources. 70% of the resources are for a 6 month renewal for ongoing work and the other 30% is to work on a new project with the expected completion within 10 months. The contract value is approximately $3.8 million.


NTG has been working hard in the last few years to establish ourselves as a leading provider of quality Telecom software products and services in the Gulf region. The last few announcements reflect the increasing satisfaction and confidence of our customers in our wide expertise in telecom systems and operators requirements. said Ashraf Zaghloul, NTG Clarity's Chairman & CEO.


QIS Capital:


This is the third contract announcement for NTG Clarity in the last 3 months with a combined value of $9.1 million, all of which is expected to be completed in this fiscal year. The company has historically generated around $5-$6 million in annual revenues so this should translate into a record year. If margins stay consistent with historical norms, the company could be approaching earnings of $1.5 million or $0.05 per share pre-tax. NTG Clarity is currently trading at just over 3 times estimated expected earnings.



Virtutone Networks Inc. (VFX:TSX-V)
Current Price: $0.20 (coverage commenced Sep. 9/11 - $0.10)


Virtutone Networks Inc. has recently announced that its wholesale division has produced over $2.58 million in revenue for the month of May.


As previously announced, the Company produced $1.25 million in revenues for the month of March, $1.8 million for the month of April, and now $2.58 million for the month of May. The Company expects continued revenue growth moving forward as our wholesale division expands. said Jason Allen, Chief Executive Officer of Virtutone.


The company looks forward to providing continued updates.




Virtutone Networks Inc. has recently reported its financial and operating results for the fourth quarter and year ended January 31, 2013.

Although Virtutone experienced longer than expected times between signing contracts and ramping up customers to expected capacity, its wholesale division has expanded significantly subsequent to January 31, 2013. Revenue from wholesale was over $1,800,000 in April 2013 alone, although it should be cautioned that gross margins, as with most wholesale operations, are considerably smaller than those of the company’s retail division. Management expects wholesale revenue to continue to grow, and continues to add resources to expand sales, including hiring two new salespeople with vast experience and extensive contacts in the wholesale industry.


Management will remain vigilant in the area of cost control and revenue generation and looks forward to a return to profitable results in fiscal 2014 and beyond.


As at May 28, 2013, the company has 20,768,755 common shares outstanding.

  3 Months Ended Jan. 31 Year Ended Jan. 31
  2013 2012 2013 2012
Revenues $556,967 $665,499 $2,862,218 $2,671,568
Cost of Sales 429,133 382,818 1,974,106 1,453,093
Gross Margin 127,834 282,681 888,112 1,218,475
Expenses 411,661 273,804 1,491,750 1,013,364
Net Income (290,672) 33,201 (620,089) 236,880
per share ($0.014) $0.001 ($0.032) $0.015

(as at January 31, 2013)
Current Assets $ 829,705
Total Assets 1,559,116
Current Liabilities 735,597
Long-Term Debt* 93,857
Shareholders' Equity 729,662
* finance lease obligations



QIS Capital:


The latest fiscal year was full of challenges for Virtutone Networks. The company added its Wholesale Division in April 2012 and struggled with maintaining its customer base in this highly fragmented and high turnover industry. This all changed in March 2013 with the purchase of a well established business in the Wholesale market as well as key additions to management and sales channels. Since that time, Virtutone has generated revenues of over $5.6 million in less than 3 months which significantly exceeds any previous annual results. In addition, the company has announced 2 new lucrative retail contracts and is working on several others.


This should be a banner year for Virtutone with revenues of $20 to $25 million. We will be getting a better picture of the bottom line with Q1 numbers which will be announced by the end of June. This will include only 1.5 months of the new Wholesale revenue stream, but it should start to show what the company will be capable of going forward.



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 665,000 shares of NTG Clarity Networks Inc. and 939,500 shares of Virtutone 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 - 2013 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.

What's New