QIS Update #31 2014 - October 28th 2014
Included in this update:
- Blackbird Energy spuds first Elmworth well and closes financings
- NTG Clarity Networks receives $994,000 purchase order
This Update is a recap from the past two weeks. The small-cap market has been nothing short of boring lately but there is still good value in a lot of the stocks we are following. We’re doing a few attractive financings for accredited investors at the moment so if anyone has an interest in this regard please contact us for more information. Otherwise we are holding through the storm and looking for new opportunities at depressed prices.
The Vancouver Small-Cap Conference is coming up next week and will be held on Thursday, November 6, 2014 at the Vancouver Convention Centre. We are very excited about this conference as we have several great fundamental companies coming to speak from a variety of industries. Please register now at www.smallcapconference.ca/register.php to reserve your seat.
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Blackbird Energy Inc. (BBI:TSX-V)
Current Price: $0.365 (coverage commenced Aug 19/11 - $0.18)
Blackbird Energy Inc. has announced that it has spud its first Middle Montney well at Elmworth. The well was spud from surface location 14-14-70-07W6 and will be drilled to a vertical depth of approximately 2,330 meters and a lateral length of approximately 2,000 meters to location 6-26-70-07W6. Drilling operations are expected to take approximately 30 days to complete.
Post completion of its first well, Blackbird will immediately commence the drilling of its second well at Elmworth targeting the Upper Montney.
Blackbird is also pleased to announce that it has closed the non-brokered tranche of the private placement first announced on September 22, 2014.
An aggregate of 24,138,241 special warrants for gross proceeds of $7,000,089 were issued pursuant to the Non-Brokered Tranche. Each Special Warrant entitles the holder thereof to receive, for no additional consideration upon its exercise or deemed exercise, one Common Share. The Special Warrants were issued pursuant to a special warrant indenture dated October 16, 2014 between Blackbird and Computershare Trust Company of Canada as special warrant agent.
In connection with the Private Placement, the Corporation has agreed to prepare and file a prospectus (the Qualification Prospectus) and all other necessary documents in order to qualify the Common Shares issuable upon conversion of the Special Warrants to subscribers resident in Canada, or otherwise subject to Canadian securities laws. The Corporation has agreed to use commercially reasonable best efforts to obtain a receipt for the Qualification Prospectus within 60 days of the closing date of the Brokered Tranche.
In connection with the Non-Brokered Tranche, the company paid a cash finder's fee to various arm's length finders in the aggregate amount of $93,964.
In accordance with applicable securities laws, the Special Warrants are subject to a four month and one day hold period, expiring on February 18, 2015 unless a receipt for the Qualification Prospectus is obtained prior to such date.
The Non-Brokered Tranche remains subject to receipt of TSX Venture Exchange final acceptance.
Blackbird Energy Inc. has announced the completion of the previously announced bought deal private placement of 86,207,000 special warrants (the Special Warrants) and 15,900,000 common shares to be issued on a flow-through basis in respect of Canadian Exploration Expenses (the Flow-Through Shares), (collectively the Financings) at a price of $0.29 per Special Warrant and $0.34 per Flow-Through Share for total gross proceeds of approximately $30.4 million.
Garth Braun, Blackbird's CEO commented: "With the completion of these financings Blackbird now has the team, the assets and the financing in place to begin proving up its resource rich land base by drilling its first two Montney wells at Elmworth while maintaining balance sheet flexibility to pursue and execute incremental strategic acquisitions. We are also very pleased to welcome significant new long term shareholders, including a new board member, and look forward to delivering significant value creation to our new and existing investors."
National Bank Financial Inc. as lead underwriter, together with Raymond James Ltd., Haywood Securities Inc., TD Securities Inc., Cormark Securities Inc. and Jennings Capital Inc. (collectively the Underwriters), acted as the underwriters with respect to the Financings. In connection with the Financing, the Underwriters received a cash commission equal to 5.0% of the gross proceeds raised under the Financing, other than for certain investors on a 'President's List'.
Following completion of the Financings and closing of the previously announced non-brokered financing of approximately $7 million, Blackbird has approximately $44 million of cash and net working capital. Blackbird intends to use the net proceeds from the Financings along with its current net working capital balance to fund ongoing exploration and development of its core Montney lands at Wapiti, potential strategic acquisitions and for general and corporate purposes.
In connection with the Financings, the Company has agreed to prepare and file a prospectus (the Qualification Prospectus) and all other necessary documents in order to qualify the Common Shares issuable upon conversion of the Special Warrants to subscribers resident in Canada, or otherwise subject to Canadian securities laws. The Company has agreed to use commercially reasonable best efforts to obtain a receipt for the Qualification Prospectus within 60 days of the closing date of the Financings.
In accordance with applicable securities laws, the Special Warrants and Flow-Through Shares are subject to a four month and one day hold period, expiring on February 22, 2015 unless a receipt for the Qualification Prospectus is obtained prior to such date.
The Financings remain subject to receipt of TSX Venture Exchange final acceptance.
QIS Capital: This is a massive financing for a small-cap company which was basically unknown 12 months ago. The company is playing in “elephant” country and has assembled a very enviable position in the middle of major producers in the Montney play. Blackbird now has significant distribution and will have many followers as they drill and announce results from their first two wells. We’ve had a great run on Blackbird in the last 7 months but this could be just the beginning if the company has good drilling success.
NTG Clarity Networks Inc. (NCI:TSX-V)
Current Price: $0.285 (coverage commenced Feb. 4/10 - $0.045)
NTG Clarity Networks Inc. has announced that the company has received a $994,000 Purchase Order with a global IT and communications services provider for the implementation and integration of OSS and BSS products. The project starts immediately and is expected to be completed by March 2015. This purchase order is an extension of the contract announced in June 2014 for the implementation of NTS modules. NTG Clarity will also provide support for the initial contract as well as the add-on purchase order.
"We are very pleased to receive this PO as it expands our work with this global IT and communications services provider. This additional PO reflects our customer’s satisfaction with NTG’s products and services and represents a seal of approval from this global services provider" said Ashraf Zaghloul, NTG Clarity’s Chairman & CEO.
QIS Capital: This is the second order announced by NTG Clarity in the past 2 weeks with a combined total of $3.3 million. The company reported revenues of $6.8 million for the first half of 2014 and with the new orders in place, NTG Clarity appears to be well on pace to reaching its forecast of $14 million in revenues this year. That would equate to a 40% increase over the prior year. NTG Clarity is trading at less than 5 times trailing earnings and has positive working capital (no debt) of $5.4 million or $0.15 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 179,000 shares, 350,000 options, and 706,348 warrants of Blackbird Energy Inc. and 1,561,000 shares and 100,000 options 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 - 2014 QIS Capital Corporation.