Call us : (250) 377-1182
facebook twitter linked-in
Deer Horn Capital ntg lux international frontier

QIS Update #6 - 2017 - Fairmont Resources corporate update and Q1 results from NTG Clarity Networks - June 1st 2017

Included in this update:

  • - Fairmont Resources provides update on the Grabasa acquisition in Spain
  • - NTG Clarity Networks reports its Q1 2017 financial results

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

Fairmont Resources Inc. (FMR:TSX-V)

Current Price: $0.04 (coverage commenced Feb. 18/16 - $0.025)

On May 26, 2017, Fairmont Resources Inc. has announced that, in connection with its Granitos de Badajoz (Grabasa) acquisition, the company's lawyers in Spain received on May 26, 2017, a resolution stating that the offer to acquire the assets of Grabasa has been terminated by the Court, located in Badajoz, Spain. Fairmont's lawyers have identified several key points which may be considered legally inaccurate.

On that ground, Fairmont will appeal the court's ruling on several points. As well, it is a very serious situation that it appears the court ruling was leaked to the media before Fairmont was notified. Fairmont expects to file a complaint in relation to this leak. The leak appears to be malicious and with the intent to damage the reputation of Fairmont with the local community and former employees of Grabasa in Spain.

Fairmont is also pursuing additional options to complete the acquisition of Grabasa and is committed to bringing Grabasa back into production and bringing jobs back to the region.

Management from Fairmont attended the inaugural StoneX Canada Trade Show in Toronto last week. The Show is Canada's first dedicated event and educational program to the stone, terrazzo, ceramic and tile industries. StoneX Canada brings together leading manufacturers, importers, exporters, distributors, buyers, and building professionals for three days in an exposition and educational presentation atmosphere. Upon successful completion of the Grabasa acquisition, this event would be the showcase for Grabasa products into the market.

Samples from Baie Comeau are expected to be collected later this month or early June due to a late snow melt along the North Shore of the St Lawrence River and soft bush road conditions.

Planning for larger bulk sampling at Baie Comeau, Buttercup and Forestville Projects in Quebec are also underway.

QIS Capital:  It's been a long wait for Fairmont shareholders and those associated with Granitos de Badajoz for this acquisition to complete.  Financing remains incredibly scarce in the micro-cap mineral space and Fairmont management has been actively engaged with a number of different financing groups.  Fairmont currently has a financing company working in its behalf to complete the acquisition but has hit a number of legal challenges to completing the purchase.  Investors should not assume at this point that the acquisition can be completed but the company is still working toward completing the purchase at this time.  In the meantime, at the current trading price, Fairmont has a market capitalization of just $1.45 million and has some tremendous opportunities in advancing its Canadian quartzite, silica,  and lithium properties.

NTG Clarity Networks Inc. (NCI:TSX-V)

Current Price: $0.04 (coverage commenced Feb. 4/10 - $0.045)

NTG Clarity Networks Inc. has announced its first quarter results for the period ended March 31, 2017 (all figures in Canadian Dollars).

NTG Clarity's financial performance continued to be challenged during the first quarter of 2017, as a result of lower oil prices, which affected customer projects in the Middle East, as well as from the devaluation of the Egyptian pound and related challenges for working in that country. However, the company achieved improvement in revenues, significantly lower costs, and recorded a much lower net loss compared to the same period last year. Management is continuing the aggressive cost reduction strategy initiated in Q3 2016, to bring the corporation back to profitability. The beginning of the effects of these measures are apparent in Q1 2017, however there are still significant cash flow constraints which are limiting the company's ability to expand revenues.

Consolidated revenue for the three months ended March 31, 2017 increased to $3,007,929 compared to $2,433,333 for the same period in 2016. Revenues were comprised of product-related revenue, professional services and a small amount for hardware/office supplies.

Gross margin for Q1 2017 was $584,070 compared to $696,001, or 19% compared to 29% for the same period in 2016. We continue to work toward reducing the cost of sales in order to optimize our revenue growth.

NTG Clarity's operating expenses were reduced by 33% in Q1 2017 to $1,327,924 compared to $1,985,235 in the same period last year as we continue staff, salary, and selling and travel reductions to bring expenses more in line with revenue.

G&A expenses for the three months ended March 31, 2017 were $735,076 compared to $1,465,251 in Q1 2016, a decrease of 50%. This significant reduction was due primarily to a reduction of salaries and consulting costs, lower occupancy costs as we continue to work on reducing rental costs, and the discontinuation of research activities related to our new software product StageEM.

For the period ended March 31, 2017, the corporation recognized a foreign currency exchange loss of $156,293, compared to a loss of $14,512, in the same period in 2016. The loss was primarily due to the weakening of currencies in relation to the Canadian and US dollar.

For Q1 2017, NTG Clarity recorded a net loss of $752,579 as compared to a net loss of $1,986,457 in Q1 2016. This is a substantial improvement as management has worked diligently to reduce selling and G&A costs, and optimize cost of sales to be more in line with the company's current revenue.

NTG Clarity is actively pursuing new opportunities with existing and potential new customers. We have expanded our existing professional services contract with more resources. In Q1 2017, we finalized a Purchase Order for a Smart Building Systems project valued at approximately $753,000. We also received a Purchase Order for a CRM and Billing Data Migration expansion project. We have been short listed for a PPM & Strategy and Requirements Management opportunity and have started proof of concept. We continue to work on a list of opportunities for services and products in the telecom, smart building and government sectors.

Looking towards the future, we are committed to bring NTG back to profitability in 2017. We will also focus on capitalizing on the goodwill we have with our existing customers to expand our business and increase our margins. We will concentrate on marketing our products NTS, StageEM and Voice Over WiFi, which are currently in demand and have higher margins.

QIS Capital:  Certainly a better quarter than has been achieved over the past year but NTG Clarity still has a ways to go to get itself back in good financial condition.  Management has indicated that results will continue to improve throughout 2017 and is still pursuing to return the company to profitability by the end of this year.  NTG Clarity is facing considerable political and financial challenges in the Middle East, where the majority of the company's revenues are derived, but the company is working on a number of new fronts and expects to see additional revenue opportunities with higher margins in the coming quarters.

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 1,059,500 shares and 1,137,500 warrants of Fairmont Resources Inc. and 1,551,214 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 - 2017 QIS Capital Corporation.

Canadian Small Caps

Canadian Small Caps

CLICK HERE to view the presentations from the Spring 2016 Small-Cap Conferences.

We are pleased to publish the PowerPoint presentations from The Small-Cap Conferences that were held in Calgary on March 30, 2016 and in Vancouver on May 3, 2016.

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

What's New