QIS Update #29 2013 - December 3rd 2013
Included in this update:
- Blackbird Energy announces grant of options
- Pennant Energy discloses results from its AGM and special meeting
- Quinsam Capital buys shares in NTG Clarity and other stocks followed by QIS Capital
- Virtutone Networks announces November sales of $7.2 million and closes its private placement
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Blackbird Energy Inc. (BBI:TSX-V)
Current Price: $0.10 (coverage commenced Aug 19/11 - $0.18)
Blackbird Energy Inc. has announced that it has filed its audited financial statements and related management's discussion and analysis for the year ended July 31, 2013 with the Canadian securities regulatory authorities on SEDAR at www.sedar.com.
In addition, the company has filed its statements of reserves data and other oil and gas information for the year ended July 31, 2013 as mandated by National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities (NI 51-101) of the Canadian Securities Administrators.
Blackbird's reserves were evaluated as at July 31, 2013 by the independent engineering firms of GLJ Petroleum Consultants Ltd. (GLJ) and Fekete Associates Inc. The evaluations by GLJ and Fekete were conducted in accordance with standards set out in the Canadian Oil and Gas Evaluation Handbook and are compliant with NI 51-101.
Pennant Energy Inc. (PEN:TSX-V)
Current Price: $0.04 (coverage commenced Dec 7/12 - $0.075)
Pennant Energy Inc. has announced its financial and operating results for the three months ended September 30, 2013.
During the three month period ended September 30, 2013, Pennant recognized income (loss) and comprehensive income (loss) of ($26,626) (2012 – $424,250). The comparative period income was primarily attributed to the company receiving proceeds of $380,000 and recognizing a $357,231 gain on the sale of the Daly property assets.
The company recognized a total of $148,818 (2012 - $394,939) in petroleum and natural gas revenues from its Bigstone, Ferrier and Watts properties. Production and transportation expenses of $93,741 (2012 - $160,438) and royalties of $13,331 (2012 - $22,556) are attributed to the producing wells. The decrease in revenues, production expenses and royalties are primarily attributed to reduced gas production from the three Bigstone property wells. Production from the Bigstone wells have not performed up to previous expectations. The company is uncertain at this time whether the production performance is a result of tighter reservoir rock on the east side of the company’s acreage block or reflective of completion design and execution, or infrastructure related.
As at September 30, 2013, $61,361 is due from the operator of the Bigstone property for advances and revenues which are reported as deposits.
At September 30, 2013, Pennant has $110,169 (June 30, 2013 - $431,024) in cash. Working capital at September 30, 2013 is $63,412 (June 30, 2013 - $405,565).
The company's primary focus for the foreseeable future will be on aggressively exploring and developing the Mantario Project in southwest Saskatchewan. The management team also plans to continue reviewing the productions levels of its current assets to maximize its revenues.
(as at Sept. 30, 2013)
|Current Assets||$ 141,238|
|LATEST FINANCIAL RESULTS (in 000s)|
|3 Mos. Ended Sept. 30|
|Gain on Prop. Sale||-||357|
Quinsam Capital Corp. (QCA:CNSX)
Current Price: $0.15
In QIS Update #25 from October 31, 2013 (see: www.smallcaps.ca/updates-104-QIS-Update-#25) we talked about Quinsam Capital and mentioned that we’d provide some follow-up coverage on the company. They recently released a news release highlighting the company’s November 2013 investment activity and we’ve included this news release below. Also displayed are some links to some associated current and past QIS Capital articles as we are following several of the companies mentioned by Quinsam.
Quinsam Capital Corporation has updated shareholders on its November activities. November was the first month of operation under its new management team led by fund manager Roger Dent.
Following the closing of its private placement on November 18, Quinsam Capital has commenced to selectively deploy funds into investments where Quinsam sees strong value and growth potential. The company has purchased positions in four companies: CERF Incorporated (CFL), NTG Clarity Networks Inc. (NCI), Questor Technology Inc. (QST), and Titan Logix Corp. (TLA).
CERF is in the equipment rental business and the waste management business in Alberta. The Equipment Rental Segment includes the rental of residential, commercial and industrial construction related equipment including sales and service of equipment. It also includes the rental and sale of equipment to the drilling and service sectors of the oil and natural gas industry. The Waste Management Segment consists of complete waste facility management (six landfill sites in central Alberta) including waste facility design and construction services, recycling management and collection services, and consulting services. The Waste Management Segment also consists of waste removal and disposal from commercial, industrial and residential customers. We purchased shares immediately after the company reported strongly-improved third quarter results.
NTG Clarity's vision is to be a global leader in providing networking solutions. NTG has experienced a 102% increase in revenues during the first nine months of 2013 with net income growth of 458% to $1.8 million or $0.06 per share. The Company's earnings for the third quarter of 2013 alone were $784,669 or $0.025 per share. NTG also has a stable balance sheet with positive working capital of $3.9M or $0.12 per share and minimal long-term debt. Management is confident that the Company's strong growth rates in both revenues and earnings will continue into the New Year. One of the main reasons for the strong growth in 2013 to-date has been a renewed international focus on state-of-the-art technology and networking capabilities. Mobile applications have been the fastest growing technology trend with NTG's mobile application development being increasingly chosen as a leading product in these markets.
QIS Capital Profile – NTG Clarity:
Questor designs and manufactures high efficiency waste gas incinerators for sale or for use on a rental basis and also provides combustion-related oilfield services. The Company's proprietary incinerator technology destroys 99.99% of noxious or toxic hydrocarbon gases which ensures regulatory compliance, environmental protection, public confidence and reduced operating costs for customers. The technology creates an opportunity to utilize the heat generated from efficient combustion. Questor is recognized for its particular expertise in the combustion of sour gas. In recent quarters, Questor has been reporting sharp increases in revenue and profit as its technology gains acceptance in the marketplace.
QIS Capital Research Report – Questor Technology:
TLA is a high technology company specializing in research and development, manufacturing and marketing of advanced technology fluid management solutions. TLA's products include guided wave radar gauges for level measurement and overfill prevention (particularly for use in mobile tanker applications), level gauges for storage tanks, burner management for oilfield heaters, and communication systems for remote alarming and control. The products are currently used in the oil and gas, waste fluid collection, chemical and aviation industries. These technologies and their derivatives under development are applicable to a variety of additional markets which TLA plans to expand into at the appropriate time. A common practice in many of these markets is the use of manual methods for measurement and control. Due to safety considerations, the rising cost of many fluids, awareness and concerns about the environment and technological advancements enabling better operational efficiencies, TLA is experiencing an increased demand for our advanced technology products. TLA anticipates this demand will continue as we pursue expansion into other markets.
QIS Capital Research Report – Titan Logix:
Virtutone Networks Inc. (VFX:TSX-V)
Current Price: $0.40 (coverage commenced Sep. 9/11 - $0.10)
Virtutone Networks Inc. has announced that the company has generated over $7.2 Million in revenues for the month of November.
This is the highest monthly revenues that the company has ever seen said Jason Allen, Chief Executive Officer of Virtutone. We were able to turn over our capital faster this month by focusing on customers with shorter payment terms hence, allowing us to generate additional revenues.
Virtutone Networks Inc. has announced that it has closed its previously announced non-brokered private placement. Pursuant to the Private Placement, 6,000,000 units of the Corporation were issued at a price of $0.25 per Unit for aggregate gross proceeds of $1,500,000. Each Unit is comprised of: (i) one common share of the Corporation; and (ii) one half of one Common Share purchase warrant. Each whole Warrant will entitle to holder to purchase one Common Share at an exercise price of $0.375 for a period ending November 30, 2015.
The securities issued pursuant to the Private Placement are subject to a hold period of four months and one day from the closing date as well as other restrictions with respect to sales from control positions.
Proceeds from the Private Placement will be used for general working capital and corporate purposes.
QIS Capital: $7.2 million for the month of November was well ahead of previous expectations and is hopefully a sign of continued record performance into 2014. The company will be reporting its Q3 results by the end of December and Q4, which includes the record month of November, will likely be announced sometime around March 2014. Based on prior performance, it appears that Virtutone likely needs around $4 million per month to reach profitability so Q3 should be close and Q4 should set the stage for earnings for the next fiscal year. At the current rate of over $7 million per month, Virtutone is on pace to achieve annual revenues of approximately $85 million.
Virtutone has also redesigned its website and investors are encouraged to view the new website at: www.virtutone.com.
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 777,500 shares and 650,000 options of Blackbird Energy Inc., 310,000 shares and 200,000 options of Pennant Energy Inc., 1,110,000 shares of Quinsam Capital Corp. and 618,000 shares and 125,000 warrants 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.