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QIS Update #17 2014 - May 30th 2014

Included in this update:

  • NTG Clarity Networks releases profitable Q1 results with strong revenue growth
  • Quattro Exploration and Production clarifies cash flow generated in Q1



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NTG Clarity Networks Inc. (NCI:TSX-V)
Current Price: $0.33 (coverage commenced Feb. 4/10 - $0.045)

NTG Clarity Networks Inc. has reported first quarter 2014 revenues of $2,933,749 as compared to $1,486,872 in the same period last year (all amounts in Canadian dollars).

The company reported a net income for the three months ended March 31, 2014 of $274,002 before taxes or $202,502 after taxes, compared to a net income of $202,064, for the comparable period last year.

As at March 31, 2014, NTG Clarity had positive working capital of $4,687,297 and no long-term debt.

The company’s complete financial statements and MD&A are available on SEDAR at

  3 Months Ended Mar. 31
  2014 2013
Revenues $2,933,749 $1,486,872
Cost of Sales 1,645,970 787,325
Gross Profit 1,287,779 699,547
Selling and G&A Expense 1,000,158 388,750
Forex Loss (Gain) (260,897) (30,140)
Stock Based Comp. Expense 106,806 12,644
Net Income before Tax 274,002 202,064
Income Taxes 71,500 -
Net Income 202,502 202,064
      per share $0.006 $0.007

(as at March 31, 2014)
Current Assets $ 7,113,630
Total Assets 10,006,012
Current Liabilities 2,426,333
Long-Term Debt nil
Shareholders' Equity 7,573,145


QIS Capital: We’ve received mainly positive comments regarding Q1 numbers. It’s important that investors not lose sight over what a tremendous year 2013 was for NTG Clarity, particularly when comparing year over year. The first quarter continued this growth with a 97% increase in revenues. While net earnings were basically flat, NTG Clarity showed a significant improvement in pre-tax earnings which is important since the company will be at least partially taxable this year. The management discussion and analysis explains all of the expenses and notable details very well and should be read for a full understanding of the Q1 results. Overall Q1 has historically been the slowest quarter of the year for both revenues and profitability. The company still has a large backlog of work for Q2 and Q3 and continues to work on new contracts. Trailing earnings continues to be $0.06 eps so NTG Clarity is trading at just a 5X multiple. When positive working capital of $0.13 per share (and no debt) is considered, the company’s shares are trading at a multiple of 3.3X.

Global Maxfin Securities came out with an updated report on NTG Clarity yesterday as well. Global stated that Q1 results were in line with expectations and maintained its $1 target price. If any investors would like a copy of the updated report, please let us know.


QUATTRO Exploration and Production Ltd. (QXP:TSX-V)
Current Price: $0.70 (coverage commenced Mar. 24/14 - $0.32)


Quattro Exploration and Production Ltd. has provided a correction to its news release dated May 27, 2014. The company has also retained Renmark Financial Communications Inc.

During the first 3 months of 2014, the Company's average production was 1,252 boe/d and Quattro's cash-flow from operations was $ 1,814,509 or $ 0.054 per share.

Quattro Exploration and Production Ltd. exited the quarter ending March 31st, 2014 producing more than 1,500 boe/d growing from an exit rate of 1,040 boe/d at December 31st, 2014, a 45% increase in 3 months.

Furthermore, Quattro is pleased to retain the services of Renmark Financial Communications Inc. to increase its investor relations activities. "We are pleased to announce that we have selected Renmark to reinforce Quattro's profile in the financial community and enhancing the visibility of our Company as it continues to grow. We have chosen Renmark because its standards and methodologies will strengthen Quattro's message in a manner we prefer to communicate to the investing public while reaching a larger audience," noted Leonard Van Betuw, President and CEO of Quattro Exploration And Production Ltd.

Starting June 1st, as part of the agreement, Quattro will only be responsible for the cost and reimbursements of the corporations presentations organized by Renmark Financial Communications.

Renmark Financial Communications does not have any interest, directly or indirectly, in Quattro Exploration And Production Ltd. or any right or intent to acquire such interests.

QIS Capital: The correction to cash flow is equivalent to our Update sent out yesterday. We look forward to the company reaching its production target of 2,000 boe/d in July 2014 which should lead to continued cash flow growth for the company.


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 1,494,500 shares and 100,000 options of NTG Clarity Networks Inc. and 80,000 shares of Quattro Exploration and Production Ltd. 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 - 2014 QIS Capital Corporation.

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