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QIS Update #29 2012 - December 5th 2012



Included in this update:

  • Audiotech Healthcare going-private transaction complete, to delist after Dec. 4 market close
  • NTG Clarity Networks announces third quarter 2012 results

 


For tax-loss selling purposes, we would like to issue a friendly reminder that Canadian investors have until December 24 to record a capital gain or loss for the 2012 tax year on Canadian-listed stocks. Anything sold after December 24 will not reach its date of settlement until 2013. For Canadian investors selling U.S. stocks, the deadline is December 26 this year.

 

With QIS Capital currently in the transition mode over to Canadian Small Caps, we encourage everyone to visit www.smallcaps.ca and become more familiar with the new website. The layout is more dynamic and eye appealing and the domain name is a lot more descriptive of what we do (and much easier to remember!). Let us know if you have any questions at all about either website.

 

In the next few days, QIS Capital will be adding a new Feature Company. This is a situation that many of our subscribers are already familiar with. Watch for our new report coming out shortly.

 

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


 

Audiotech Healthcare Corporation (AUD:TSX-V)
Website: www.audiotech.org
Current Price: $0.34 (coverage commenced Nov. 8/04 - $0.14)

 

AHC Acquisition Inc. of Suite 760, 175 Second Ave., Kamloops, B.C., has acquired ownership of 13,329,825 issued and outstanding common shares in the capital of Audiotech Healthcare Corp., being 100 per cent of Audiotech's issued and outstanding common shares, pursuant to a statutory plan of arrangement.

 

AHC is a corporation controlled by Osvaldo (Ozzie) Iadarola, Audiotech's president and chief executive officer, and his family. Mr. and Mrs. Iadarola have been principal shareholders of Audiotech since it commenced operations, and, prior to Dec. 3, 2012, the majority shareholders as a group held, directly and indirectly, or exercised control or direction over approximately 65.6 per cent of Audiotech's issued common shares. On July 24, 2012, AHC made a proposal to Audiotech for a going-private transaction, whereby AHC would acquire by way of statutory plan of arrangement all of the outstanding common shares of Audiotech, such that AHC would own 100 per cent of Audiotech's issued common shares. Following approval by Audiotech's board of directors, shareholders of Audiotech and the Supreme Court of British Columbia, the arrangement was effected on Dec. 3, 2012. As a result of the arrangement, Audiotech is a wholly owned subsidiary of AHC and, after close of market on Dec. 4, 2012, will no longer be publicly traded.

 

Disclosure with respect to the arrangement is available in Audiotech's management information circular dated Oct. 22, 2012, prepared in connection with the special meeting of shareholders held on Nov. 27, 2012, which has been electronically filed with regulators and is available for viewing under Audiotech's issuer profile on the SEDAR website.

 

AHC has no present future intention to acquire ownership of, or control over, additional securities of Audiotech.

 

The arrangement was effected in accordance with the terms of an arrangement agreement made as of Sept. 10, 2012, between Audiotech and AHC. A copy of the arrangement agreement is attached as Appendix C to the circular, and it has also been filed with regulators and is available for viewing under Audiotech's issuer profile on the SEDAR website.

 

Consideration paid by AHC under the arrangement is as follows:

  • Cash payment of 35 cents per common share in respect of 4,590,325 common shares of Audiotech owned by the minority shareholders of Audiotech;
  • Issuance of 8,739,500 common shares in the capital of AHC, at a deemed value of 35 cents per AHC common share, in exchange for 8,739,500 common shares of Audiotech owned by the majority shareholders.

A report respecting this acquisition will be electronically filed with the securities commission in each jurisdiction where Audiotech is reporting and will be available for viewing online at www.sedar.com.

 

QIS Capital Comments:

 

This will be our last update on Audiotech Healthcare as the company is now private. Shareholders should shortly be receiving a cash payment of $0.35 per share in their trading accounts. We would again like to congratulate management on a company that was very well run with profitable operations and many platforms for future growth. Given the level of administrative fees, filing requirements, new accounting regulations, and lackluster small-cap markets it just didn’t make sense for Audiotech to stay as a public entity any longer. Congratulations as well to all shareholders who made a very respectful return with Audiotech.


 

NTG Clarity Networks Inc. (NCI:TSX-V)
Website: www.ntgclarity.com
Current Price: $0.05 (coverage commenced Feb. 4/10 - $0.045)

 

NTG Clarity Networks Inc. has reported third quarter 2012 revenues of $1,386,554, compared to $1,283,229 in the same period last year. Gross margin for the period was 48% compared to 44% for the same period in 2011.

 

The company reported a net income for the three months ended September 30, 2012 of $176,973, compared to a net income of $176,702 for the comparable period last year.

 

As at September 30, 2012, NTG had positive working capital of $563,584 and long-term debt of only $103,733. There are currently 25,468,391 shares issued and outstanding.

 

Consolidated interim financial statements for the quarter ending September 30, 2012 have been prepared in accordance with IAS34. See NTG's Q3 2012 MD&A and Q3 Consolidated Interim Financial statements for details.

 

LATEST FINANCIAL RESULTS
  3 Mos. Ended Sep. 30 9 Mos. Ended Sep. 30
  2012 2011 2012 2011
Revenues $1,386,554 $1,283,229 $3,670,722 $4,512,359
Cost of Sales 718,411 721,167 2,114,483 2,737,248
Gross Profit 668,143 562,062 1,556,239 1,775,111
Selling, G&A Exp. 258,423 299,860 753,405 936,288
Forex Loss 84,629 19,021 66,999 29,677
Interest Expense 49,796 55,080 149,406 138,796
Net Income 176,973 176,702 325,314 619,975
per share $0.007 $0.007 $0.013 $0.024

 

BALANCE SHEET
(as at Sept. 30, 2012)
Current Assets $ 2,766,505
Total Assets 5,369,369
Current Liabilities 2,202,921
Long-Term Debt 103,733
Shareholders' Equity 3,062,715

 

Management is very pleased with the company's third quarter performance along with the recent positive trend in earnings. During the latest quarter NTG received a purchase order to upgrade and expand the NTS/BSS installation at a major customer site. This project has a value of $1.9 million. The company continues to make progress with a number of potential clients in the Gulf region.

 

In an unrelated matter, the company announced the following member of the Board of Directors will have stock options issued; M. Adel Zaghloul; 100,000 options. Each option will be exercisable at a price of $0.10 per share and will vest upon issuance.

 

QIS Capital Comments:

 

NTG Clarity has been making strides in returning to its previous level of positive earnings and cash flow. In the last two quarters, the company has reported net income of $384,744 or $0.015 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 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.

Canadian Small Caps

 
Canadian Small Caps

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