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QIS Update #23 2013 - October 16th 2013



Included in this Update:

  • Blackbird Energy announces financing and the commencement of drilling on its Mantario oil project
  • NTG Clarity Networks reports strong third quarter sales and earnings
  • Pennant Energy closes its private placement and commences drilling at Mantario

 


 

There is less than one month until the Vancouver Small-Cap Conference! Have you registered?

 

To register, visit: www.smallcapconference.ca/register.php

 

This is going to be one of our best conferences ever! We have a tremendous line up of presenting companies and fundamental companies are again in a positive spotlight. Some of the companies from previous conferences have done exceptionally well over the past 12 months including Titan Logix (TLA), C-Com Satellite (CMI), Rifco Inc. (RFC), NTG Clarity (NCI), and many others. This year we have another quality line up – just the right time when the market is starting to reward these quality, fundamental small-caps.

 

Presenting companies this year come from a variety of industries including manufacturing, food production, oil & gas, servicing, mining, and more.

 

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: $0.09 (coverage commenced Aug 19/11 - $0.18)

 

Blackbird Energy Inc. has announced that it intends to carry out a non-brokered private placement for gross proceeds of up to $1,500,000. The Private Placement will consist of flow-through shares (each, a "Flow-Through Share") at a price of $0.10 per Flow-Through Share for gross proceeds of up to $500,000, and non-flow through units (each, a "Unit") at a price of $0.09 per Unit for gross proceeds of up to $1,000,000.

 

Each Unit will consist of one common share and one-half of one common share purchase warrant, with each whole warrant (each, a "Warrant") entitling the holder to purchase one additional common share (a "Warrant Share") at a price of $0.15 per Warrant Share for a period of 24 months following the closing date. The Warrants will be subject to an early acceleration provision which provides for the mandatory exercise or expiry of the Warrants in the event Blackbird's shares close at $0.30 or higher for at least 10 consecutive trading days. In such event, the Warrants will accelerate and expire 30 days after the Company has given notice of the acceleration to the Warrant holders.

 

Blackbird intends to pay finder's fees in the form of an 8% cash commission and 8% finder's warrants in connection with the Private Placement. The Private Placement is subject to approval from the TSX Venture Exchange and all of the securities issued pursuant to the Private Placement will be subject to a four-month hold period from the date of issue.

 

Blackbird today also announced that drilling operations on the first Success formation well at the Company's Mantario oil project in West Central Saskatchewan (the "Mantario Well") have commenced today, with the well to spud from a surface location at15d-6-26-24W3 to a total depth of 1,000 meters.

 

Garth Braun, President and CEO of Blackbird stated, We are pleased to launch this financing at what we believe to be an exciting time for Blackbird. Net proceeds will be used to support the ongoing drilling operations on the Mantario Well, the re-entry of a well on our Bromhead project and to supplement cash on hand for working capital purposes.


This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

 

QIS Capital: Any sophisticated investors interested in the Blackbird Energy flow-through or non flow-through financing are invited to contact QIS Capital as soon as possible. We are excited at the prospects of success at Mantario and/or Bromhead as both of these plays have significant development potential. Blackbird has a new powerpoint presentation available on its website at www.blackbirdenergyinc.com.


 

NTG Clarity Networks Inc. (NCI:TSX-V)
Website: www.ntgclarity.com
Current Price: $0.56 (coverage commenced Feb. 4/10 - $0.045)

 

NTG Clarity Networks Inc. has announced its third quarter 2013 financial results. The company experienced a 171% increase in revenues during the third quarter of 2013 reaching $3,767,669 compared to $1,386,554 during the same period in 2012 (All amounts in Canadian dollars).

 

This increase in revenue was mainly due to demand for NTG Clarity’s professional services and product-related business. For the nine months, the company posted revenues of $7,403,921 compared to $3,670,722, an increase of over 100%. Gross margin was 44% for the third quarter of 2013, and 50% for the nine months. Gross margins in the prior year were 48% and 42% for the 3 and 9 month periods respectively.

 

Net income for the third quarter of 2013 increased by 343% to $784,669 or $0.02 per share and again exceeded the entire annual profit from 2012. For the first 9 months of 2013, net income rose 458% to $1,816,136 or $0.06 per share as compared to $325,314 or $0.01 per share in the first three quarters of 2012. The increase in profitability was due mainly to increased revenues and higher margins.

 

As at September 30, 2013, NTG Clarity had positive working capital of $3,869,577 ($0.12 per share).

 

LATEST FINANCIAL RESULTS
  3 Mos. Ended Sept. 30 9 Mos. Ended Sept. 30
  2013 2012 2013 2012
Revenues $3,767,669 $1,386,554 $7,403,921 $3,670,722
Cost of Sales 2,102,245 718,411 3,683,395 2,114,483
Gross Profit 1,665,424 668,143 3,720,526 1,556,239
Selling and G&A Exp. 501,895 258,423 1,364,026 753,405
Forex Loss (gain) 41,552 84,629 (161,836) 66,999
Interest Expenses 67,441 49,796 145,982 149,406
Net Income 784,669 176,973 1,816,136 325,314
per share $0.025 $0.007 $0.057 $0.013

 

BALANCE SHEET
(as at Sept. 30, 2013)
Current Assets $ 6,267,673
Total Assets 9,247,180
Current Liabilities 2,398,096
Long-Term Debt 812,765
Shareholders' Equity 6,036,319

 

During the first nine months of 2013, NTG announced several new projects for leading mobile operators in the Gulf region, which includes NTS installations/enhancements, profession service resources and data migration. The revenue from these projects is estimated at over USD $9.0 million. The company has since received purchase orders for these projects and work is ongoing.

 

In an unrelated matter, the company announced the following members of the Board of Directors will have share options issued; M. Zafar Farooqui; 100,000 options, Sinclair Stevens; 100,000 options, Kristine Lewis; 150,000 options; M. Adel Zaghloul; 150,000 options and Ashraf Zaghloul; 150,000 options. Each option will be exercisable at a price of $0.60 per share and will vest one half upon issuance and one half in six months time.

 

QIS Capital: The company’s earnings for the third quarter were $784,669 or $0.25 per share and for the nine months net income totaled $1.8 million or $0.057 per share. NTG Clarity also has positive working capital of about $0.12 per share. The company is currently trading at about 7 times expected earnings for this fiscal year and at only 5.6 times when adjusted for working capital. Congratulations to all of those investors who have held through the recent rally and all the best for continued success.

 


 

Pennant Energy Inc. (PEN:TSX-V)
Website: www.pennantenergy.com
Current Price: $0.035 (coverage commenced Dec 7/12 - $0.075)

 

Pennant Energy Inc. has announced that it has completed its previously announced non-brokered private placement of 455 unsecured convertible debentures (each, a "Convertible Debenture") in the aggregate principal amount of $455,000 (the "Offering"). The Company also issued 9,100,000 share purchase warrants (each, a "Warrant"), with each Warrant entitling the holder to purchase one common share (each, a "Share") of the Company at a price of $0.05 per Share for a period of two years.

 

The Convertible Debentures mature eighteen (18) months from the date of the closing of the Offering (the "Maturity Date") and bear interest at the rate of 18% per annum payable on the Maturity Date. Insiders of the Company purchased an aggregate of 60 Convertible Debentures. At any time at the option of the holder, the principal amount of each Convertible Debenture will be convertible into Shares at a price of $0.05 per Share during the first 12 months after issuance and at a price of $0.10 per Share thereafter until the Maturity Date and any accrued but unpaid interest thereon will be convertible into Shares at the price per Share which is equal to the Market Price (as defined in the policies of the TSX Venture Exchange) at the time of conversion. Each Convertible Debenture will be pre-payable at the election of the Company in an amount equal to the principal amount, any accrued but unpaid interest and a penalty equal to three months interest (the "Prepayment Amount"). If the Company disposes of its Bigstone Project, then the Company will be required to repay all of the Convertible Debentures in an amount equal to the Prepayment Amount within ten (10) days of the completion of such sale.

 

The Company paid an aggregate of $18,400 to finders in connection with the Offering.

 

The proceeds of the Offering will be used by the Company to pay for its share of the costs of the first Success formation well to be drilled at its new oil exploration project located in the Mantario area of west-central Saskatchewan in the fourth quarter of 2013, and for general working capital.

 

The securities issued in connection with the closing of the Financing are subject to a restricted period that expires on February 16, 2014.

The Company also announces that drilling operations on the first Success formation well at the Company's Mantario oil project in West Central Saskatchewan have commenced today, with the well to spud from a surface location at15d-6-26-24W3 to a total depth of 1,000 meters.

 

QIS Capital: We are eagerly anticipating news in the next few weeks regarding drilling success at Mantario. This play has the potential to develop into a significant area for Pennant as it lies adjacent to several producing fields and shows strong analogy to Rock Energy’s (RE) Mantario play. Rock Energy (see our independent report in the Research section) has recently moved up to $2.50 per share.

 


 

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 807,500 shares of Blackbird Energy Inc., 529,500 shares and $150,000 in convertible debentures and 100,000 options of NTG Clarity Networks Inc. and 410,000 shares of Pennant Energy 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

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

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