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QIS Update #7 2013 - April 3rd 2013



Included in this update:

  • Blackbird Energy acquires 25 sections of P&NG rights, files Q2 financials
  • Cobra Venture files year-end financial statements
  • NTG Clarity Networks announces strong Q4 and year-end 2012 results
  • Virtutone Networks provides update on wholesale operations

 

The line-up has been finalized for the upcoming Small-Cap Conference we are hosting in Calgary on April 16. This conference offers a wide variety of quality small-cap companies as well as two prominent guest speakers who have not presented in quite some time at one of our Calgary events – be sure to catch them while they are in town!


All of the participants are listed on the website. To view these companies, pre-register to attend, or suggest additional presenting companies, please visit www.smallcapconference.ca or contact us at info@smallcapconference.ca. We’ll be posting the speaking schedule in the very near future, so stay tuned for that.


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.


 

Blackbird Energy Inc. (BBI:TSX-V)
Website: www.blackbirdenergyinc.com
Current Price: $0.09 (coverage commenced Aug 19/11 - $0.18)

 

Blackbird Energy Inc. has announced that its wholly-owned subsidiary, Ruger Energy Inc., has entered into an agreement to purchase certain oil and gas assets from Home Quarter Resources Ltd. for total cash consideration of $115,000.

 

The assets are comprised of 25 sections of Petroleum & Natural Gas Rights (the Marengo - Mantario Project) located near Ruger's two current oil production facilities in Alsask and the Flaxcombe area of Saskatchewan. The Marengo - Mantario Project is comprised of a total of 16,000 net acres in West Central Saskatchewan. This acquisition will provide Blackbird with a 100% working interest in 25 sections, at an average cost of $4,600 per section, subject to a 6% GORR in favour of the Vendor and standard crown royalties.


Garth Braun, President and CEO of Blackbird stated, This acquisition of the Marengo - Mantario Project is a key addition to Blackbird's land position in one of our core areas and very synergistic to the Blackbird team strategy of extending the development of the multi-horizon oil plays from top to basement in both Alsask and Flaxcombe.

Mr. Braun went on to state, The Blackbird team continues to be focused on originating new high quality oil plays through the assembly of additional land positions in Alberta and Saskatchewan. Blackbird is in the enviable position of having a healthy balance sheet to pursue these opportunities as they arise.


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Blackbird Energy Inc. has also filed its financial statements and related management's discussion and analysis for the three and six months ended January 31, 2013 on SEDAR at www.sedar.com.


QIS Capital:


Up until today, Blackbird has seen a significant increase in trading volume and a decent movement forward in share value. The company has been quite active as it develops several new plays and has been very successful with its workover and recompletion efforts at its Flaxcombe property. New production additions should start to have an impact on revenues and cash flow in the third quarter.


As of last report (Jan 31/13), Blackbird had cash of $2,087,958 and receivables of $155,176. Total payables were only $148,645. Revenues for the 6 months ended Jan 31/13 were $289,333 which doesn’t include the purchase of the Flaxcombe property which took place in January, nor the new production from recompletions. Blackbird is well on its way to having a stable cash flow base while maintaining a strong balance sheet throughout this fiscal year.


 

Cobra Venture Corporation (CBV:TSX-V)
Website: www.cobraventure.com
Current Price: $0.22 (coverage commenced May 22/07 - $0.205)

 

Cobra Venture Corporation has just released its Audited Annual Financial Statements for the year ended November 30, 2012. Complete versions of these documents may be obtained electronically from the SEDAR system at www.sedar.com.

 

The following is a summary of the significant events and transactions that occurred during the year ended November 30, 2012:

  • Sold all of its remaining freehold petroleum and natural gas royalty interest in the Viewfield area and recorded a gain of $5,148,348 after closing adjustments of $46,362 in connection with the sale.
  • Received and cancelled 1,767,000 common shares of the company for a fair value of $530,100 in connection with the sale of the company’s interests in the Viewfield area.
  • Repurchased 70,000 common shares of the company for cancellation for $17,884.
  • Acquired 100% interest in certain lands and premises located in the Municipal District of Rocky View No. 44, in the Province of Alberta, consisting of approximately 15.78 acres, excepting thereout all mines and minerals, for $3,975,000, and closing costs of $46,876, for a total of $4,021,876.

 

Oil and gas revenue of continuing operations for the year ended November 30, 2012 was $208,974 compared to $249,648 in 2011. Oil and gas revenue of discontinued operation for the year ended November 30, 2012 was $100,705 compared to $1,274,552 in 2011. The decrease of revenue for the discontinued operation is a result of the Company no longer owning royalty interests in the Viewfield area.


Direct costs of continuing operations for the year ended November 30, 2012 were $169,813 compared to $217,065 in 2011. The decrease is primarily a result of decreased depletion costs and royalties. Direct costs of discontinued operations for the year ended November 30, 2012 were $29 compared to $1,594 in 2011.


Administrative expenses of continuing operations for the year ended November 30, 2012 were $894,748 compared to $940,890 in 2011. The decrease is mainly a result of decreased management fees.


As at November 30, 2012, the company had a positive working capital position of $1,579,996 or $0.10 per share (does not include the value of the lands purchased in Alberta) and no long-term debt.

 

LATEST FINANCIAL RESULTS
  Year Ended Nov. 30
  2012 2011
Revenues $208,974 $249,648
Direct Costs 169,813 217,065
Write-down of O&G Interests 23,706 491,033
Income Tax Expense (Recovery) (205,250) (227,059)
Loss from Continuing Ops (614,919) (952,212)
Income from Discontinued Ops 3,880,997 922,957
Net Income (loss) 3,266,078 (29,255)
per share $0.20 ($0.002)

 

 

BALANCE SHEET
(As at November 30, 2012)
Current Assets $ 2,770,644
Total Assets 7,283,226
Current Liabilities 1,190,648
Long-Term Debt nil
Shareholders' Equity 6,019,178




 

NTG Clarity Networks Inc. (NCI:TSX-V)
Website: www.ntgclarity.com
Current Price: $0.08 (coverage commenced Feb. 4/10 - $0.045)


NTG Clarity Networks Inc. has reported its annual financial results for the fiscal year ended December 31, 2012.

2012 has seen a positive turnaround for NTG, with a significant increase in shareholders' equity and net income.

Revenues for the year ended December 31, 2012 were $5,002,537 versus $5,172,176 for 2011. The gross profit margin was 50.8% in 2012 compared to 40% in 2011. The company recorded a net income of $776,688 in 2012 as compared to $1,097 in 2011. The significant increase in financial performance was due primarily to the company’s focus on more profitable projects with higher margins.

 

General and administration expenses were $845,627 in 2012 as compared to $854,371 in 2011. Selling and marketing expenses were $280,768 in 2012 as compared to $659,829 in 2011. Interest expense was $183,980 in 2012 as compared to $258,627 in 2011.

 

NTG Clarity was also successful in strengthening its balance sheet during 2012. Shareholders' Equity improved by 39% to $3.7 million and long-term debt declined by 51% to $82,986. As at December 31, 2012, NTG Clarity had positive working capital of $1,010,760.

 

LATEST FINANCIAL RESULTS
  3 Mos. Ended Dec. 31 Year Ended Dec. 31
  2012 2011 2012 2011
Revenues $1,331,815 $659,817 $5,002,537 $5,172,176
Cost of Sales 344,267 370,076 2,458,750 3,107,324
Gross Margin 987,548 289,741 2,543,787 2,064,852
Selling and G&A Exp. 372,990 577,912 1,126,395 1,514,200
Forex Loss (gain) 10,870 (132,354) 77,869 (102,989)
Interest Expense 34,574 119,831 183,980 258,627
Net Income 451,374 (616,878) 776,688 1,097
per share $0.015 ($0.024) $0.026 $0.00

 

 

BALANCE SHEET
(as at Dec. 31, 2012)
Current Assets $ 3,346,388
Total Assets 6,155,709
Current Liabilities 2,335,628
Long-Term Debt 82,986
Shareholders' Equity 3,725,448

 

The company’s leadership team has set goals that will accelerate revenue growth and increase operating margin. These goals mainly focus on the standardization of NTG Clarity’s product offering, providing a cloud-based version of its Operations Support System/Business Support System (OSS/BSS) product called NTS to small operators, and expanding the company’s footprint through partnerships and system integrators in target markets. This development continues in 2013.

 

Management will continue to market in the Middle East and seek opportunities in Africa as it has large infrastructure and telecom projects. NTG Clarity's brand name is gaining increased recognition worldwide as a reliable, quality, cost-effective supplier to telecom and network service providers. This is an enormous market and the company will continue work on improving our market share through the enterprise and wireless areas of the business. Management expects to achieve revenue growth throughout 2013 as NTG delivers on recently acquired contracts, services these contracts on an ongoing basis, and penetrates new market opportunities.

 

Management continues to feel that the underlying value of the business is not fully reflected in its share value and is committed to adding further shareholder value through revenue growth, cost control and effective investment promotion.

 

QIS Capital:

 

NTG Clarity achieved a solid turnaround in 2012 and announced record net income despite a slight decline in annual revenues from previous years. The stock was previously trading at $0.20 to $0.30 when the company last announced annual earnings of over $0.025 per share. Yet here we sit at $0.06 to $0.08 in a very challenging small-cap market. The trailing 12 month earnings are $776,688 or $0.026 per share, working capital is over $1 million or $0.034 per share, long-term debt is less than $100K, and Shareholders' Equity reached $3.7 million or $0.13 per share. NTG Clarity’s shares are currently trading at a multiple of less than three times earnings ignoring the extra value in the balance sheet. Q1 numbers will be out by the end of April.


 

Virtutone Networks Inc. (VFX:TSX-V)
Website: www.virtutone.com
Current Price: $0.15 (coverage commenced Sep. 9/11 - $0.10)

 

Virtutone Networks Inc. has announced that its new wholesale traffic, previously announced on March 4th, commenced on March 11th. This new traffic, combined with the company's existing wholesale business, has produced $1.25 million in revenue for the month of March.

 

We are pleased so far with the results of this new business said Jason Allen, Chief Executive Officer of Virtutone. The performance of our wholesale division is exceeding our expectations, and we are working hard to ensure that the steady increase in revenue continues.

 

The company looks forward to providing continued updates.

 

QIS Capital:

 

Virtutone achieved revenues of $1.25 million in just 20 days in March, following the conversion of wholesale clients from the recent acquisition to the company’s network. At this pace, the company is on track for annual revenues of over $20 million for the next 12 months compared to annual revenues of just $3 million in preceding years. These revenues will show up for half of Q2 (ending April 30) but will have a full impact on Q3 (ending July 31). This should be a very exciting year for Virtutone and its shareholders.



 

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 351,500 shares and 450,000 options of Blackbird Energy Inc., 384,000 shares of Cobra Venture Corporation, 690,000 shares of NTG Clarity Networks Inc., and 892,000 shares 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.

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