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QIS Update #14 2013 - June 30th 2013



Included in this update:

  • Blackbird Energy files third quarter financial statements
  • Cobra Venture postpones AGM due to Calgary flooding
  • NTG Clarity Networks announces $1 million convertible debenture financing
  • Virtutone Networks reports first quarter financial results

 


 

To all of our Canadian subscribers – Happy Canada Day! And enjoy a happy and safe long weekend.

 

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




 

Blackbird Energy Inc. (BBI:TSX-V)
Website: www.blackbirdenergyinc.com
Current Price: $0.05 (coverage commenced Aug 19/11 - $0.18)

 

Blackbird Energy Inc. has filed its financial statements for the three and nine months ended April 30, 2013.

 

Blackbird’s management team is focused on diversifying its interest with the addition of lower risk development oil projects in Alberta and Saskatchewan. The company is striving to establish a solid base of economical oil production.

 

QIS Capital:

 

As the company still has modest production, we will only provide a brief summary of operations for the three and nine months ended April 30, 2013. Blackbird Energy’s complete financial statements can be viewed online at www.sedar.com .

 

Revenues net of royalties were $149,628 for the 3 months ended April 30, 2013 and $438,961 for the 9 months, compared to nil in the previous year. Total expenses were $516,292 for the third quarter and $1,400,094 for the nine months resulting in a net loss of $362,265, and $931,487, respectively. Cash flow for the first nine months of fiscal 2013 was negative $393,715.

 

Investors need to remember that the first Flaxcombe Sparky zone workover was tied in on February 25, 2013 and only contributed for two months of the third quarter. The second Flaxcombe Sparky workover was completed in late February and was awaiting surface facilities and regulatory approval so didn’t contribute to the third quarter. Once these wells are producing for an entire quarter, Blackbird’s cash flow should show a significant improvement.

 

At Bigstone, the SemCAMS Tony Creek Extension Pipeline went down unexpectedly in early February for repairs and consequently the Bigstone wells were shut-in. SemCAMS confirmed that repairs were completed on March 5, 2013 allowing for the Company’s Bigstone wells to resume production.




 

Cobra Venture Corporation (CBV:TSX-V)
Website: www.cobraventure.com
Current Price: $0.20 (coverage commenced May 22/07 - $0.205)

 

Cobra Venture Corporation has reported that as a result of the extensive flooding that has recently occurred in Calgary, Alberta and in the surrounding area, it was necessary for the Corporation to adjourn its Annual and Special Meeting of Shareholders (the 2013 AGM) from Tuesday, June 25, 2013 to Monday, July 8, 2013. Specifically, the adjourned 2013 AGM will be held at Centennial Place, East Tower, 1900, 520 – 3rd Avenue, S.W. Calgary, Alberta, on Monday, July 8, 2013, at 11:00am (Calgary time).




 

NTG Clarity Networks Inc. (NCI:TSX-V)
Website: www.ntgclarity.com
Current Price: $0.19 (coverage commenced Feb. 4/10 - $0.045)

 

NTG Clarity Networks Inc. has announced that it intends to complete a private placement of a series of unsecured convertible debentures in the aggregate principal amount of up to $1,000,000 in units of $5,000. The Debentures shall bear interest at the rate of ten (10%) percent per annum and shall mature two (2) years following the date of issuance.

 

The principal amount of the Debentures shall be convertible into common shares of the Corporation at any time prior to maturity at the option of the holder at a conversion price of $0.25 per common share. The Debentures will also have a forced conversion provision whereby the Corporation may force the conversion of the Debentures at a price of $0.25 per common share if at any time the closing price exceeds $0.35 for 7 consecutive days.

 

Over the past 30 days, NTG Clarity has announced over $8 million in new Letters of Intent with the majority of the work to be completed over the balance of 2013. To fund this growth and to provide financial flexibility to gain additional revenue opportunities, the company is required to finance its receivables and other obligations. Proceeds from this convertible debenture will be used predominantly as working capital to fund NTG Clarity’s growth.

 

Completion of the private placement herein contemplated is subject to market and other conditions and the company obtaining all regulatory body approvals in connection therewith including without limitation, approval of the TSX Venture Exchange Inc. The private placement is only available to persons and in jurisdictions permitted by the applicable securities regulatory authorities.

 

QIS Capital:

 

This offering is available to accredited investors who meet the exemption requirements of the placement. Anyone wanting more information is invited to call QIS Capital at 250-377-1182 or email us at info@smallcaps.ca




 

Virtutone Networks Inc. (VFX:TSX-V)
Website: www.virtutone.com
Current Price: $0.26 (coverage commenced Sep. 9/11 - $0.10)

 

Virtutone Networks Inc. has recently reported its financial and operating results for the first quarter ended April 30, 2013.

Monthly service and activations of $3,378,741 and product sales of $23,524 during the three month period ended April 30, 2013 resulted in total revenue of $3,402,265. This revenue was offset by cost of services provided and products sold in the amount of $3,088,424 and resulted in a gross profit before expenses of $313,841. Total revenue for the three month period ended April 30, 2012 was $600,051 and gross profit before expenses was $304,255. The significant increase in revenue in the first quarter of fiscal 2014 as compared to the first quarter of fiscal 2013 was due primarily to the growth in the company’s wholesale division. Gross profit remained relatively flat, however, as margins on wholesale business are much lower than margins on retail business.

 

Virtutone’s wholesale division took a significant step forward this quarter. Revenue from wholesale was over $3,000,000 in March and April 2013, as previously announced. As with most wholesale operations, gross margins are considerably smaller than those of the company’s retail division. The company’s target margin is 5%, which is in line to be slightly higher than industry standard. Virtutone was able to exceed this target for the period ended April 30, 2013. The company continues to incur expenditures necessary to support the growth of the wholesale division, including hiring new sales staff, developing and implementing marketing plans, and providing travel allowance for client meetings and trade shows. Management is excited by the prospective business its sales staff has generated, and expects continued growth of wholesale revenue.

 

Virtutone has also generated a number of new contract wins for its retail division. The contracts provide healthy margins for the company and also result in financial commitments from customers of 2 to 3 years. In addition to deals previously announced, the company has a number of significant deals at various stages of completion. Management looks forward to announcing the details of those contracts as they are finalized.

 

Working capital as at April 30, 2013 was $7,717, as compared to working capital of $94,108 as at January 31, 2013. The company’s April 30, 2013 working capital includes accounts receivable in the amount of $1,451,533, 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. Also included in working capital is a revolving demand facility, of which no amount is currently drawn.

 

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 June 27, 2013, the company has 20,768,755 common shares outstanding.



LATEST FINANCIAL RESULTS
  3 Months Ended Apr. 30
  2013 2012
Revenues $3,402,265 $600,051
Cost of Sales 3,088,424 295,796
Gross Margin 313,841 304,255
Expenses 355,498 281,309
Net Income (45,425) 28,109
per share ($0.002) $0.002



BALANCE SHEET
(as at April 30, 2013)
Current Assets $ 2,243,122
Total Assets 3,014,648
Current Liabilities 2,235,405
Long-Term Debt* 76,655
Shareholders' Equity 702,588
* finance lease obligations

 

 

QIS Capital:

 

Virtutone narrowed its losses considerably in the last quarter which only had a partial impact from the expanding wholesale division. The company’s revenues increased by 469% in the last quarter to $3.4 million. Virtutone announced that its May revenues were $2.7 million which should result in the next quarter being closer to $8 million in revenues. Virtutone also announced in early April that the company’s retail division had won two new contracts to provide managed line services to oil and gas supply companies with more than 700 lines being deployed in the second quarter.




 

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 733,000 shares and 450,000 options of Blackbird Energy Inc., 398,000 shares of Cobra Venture Corporation, 569,000 shares of NTG Clarity Networks Inc. and 925,000 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.

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