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
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Fairmont Resources Inc. (FMR:TSX-V)Website: www.fairmontresources.ca
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.
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.
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.
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.