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QIS Update #7 2014 - March 4th 2014



Included in this update:

  • QIS Capital Trading Summary Portfolio – up over 100%
  • Financing Opportunities – Quinsam Capital and Manado Gold
  • Blackbird Energy receives media coverage
  • Cobra Venture sells a portion of its real estate interests
  • Manado Gold releases financial statements
  • Pennant Energy files financial statements
  • Quinsam Capital announces new investments and positive performance
  • Virtutone Networks announces $7.7 million in sales for February 2014

 


 

The QIS Capital Trading Summary Portfolio has just reached a 100% gain since its inception in January 2012. To date in 2014, the portfolio has gained over 23%. Direct link to portfolio holdings and prices: www.qiscapital.com/images/portfolio.pdf

 

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As mentioned in previous updates, Quinsam Capital Corporation (QCA:CSE) is conducting a best efforts non-brokered private placement financing to raise up to $5,000,000. The proceeds of the Offering will be used for investment activities and working capital purposes. The first tranche is expected to close on Friday this week. Please contact us if you are interested in participating.

Quinsam Non-Brokered Private Placement Summary:

  • up to 50 million shares @ $0.10 per share
  • available to accredited investors
  • 4-month hold period will apply
  • 8% arm’s length cash finders’ fee

Anyone interested or for those wanting more information on the company please contact us as soon as possible. This offering is only available to accredited investors.
Email: info@smallcaps.ca
Phone: (250) 377-1182


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Manado Gold Corp. (MDO:TSX-V) still has room in a previously announced financing. On a private placement basis, up to 4,000,000 units at a price of $0.05 per unit will be issued for gross proceeds of $200,000. Each unit will consist of one common share of the company and one non-transferable share purchase warrant, with each warrant entitling the holder to purchase one additional share at a price of $0.06 per share for a period of three years following the closing date of the offering.


If anyone would like to participate in this proposed financing and is an accredited investor, please contact us for further information and the subscription agreement.


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Please feel free to email us anytime at info@smallcaps.ca 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: $0.08 (coverage commenced Aug 19/11 - $0.18)

 

Blackbird Energy Inc. has recently received some positive media coverage due to the previously announced acquisition agreement with Pennant Energy. We have included some of this coverage on the QIS Capital forum at www.smallcaps.ca.


Link to article from oilprice.com entitled “Small Companies Poised to Ride Canadian Natural Gas Wave”
www.smallcaps.ca/thread_viewer-3084-1-blackbird-energy-recent-coverage-by-oilprice.com

 

Link to interview with Garth Braun, CEO of Blackbird Energy from oilprice.com entitled “How Junior Companies Survive in the Exploration Wild: Interview with Blackbird”

www.smallcaps.ca/thread_viewer-3085-1-recent-interview-with-garth-braun,-ceo-of-blackbird-energy

 

A third piece of media coverage was recently published by Casey Research in the February 25 edition of Casey Energy Confidential. One snippet from the article reads, “Blackbird has three major catalysts in the near future, each of which could propel the stock upward if successfully executed.” Let us know if you would like to read a copy of this report by sending a quick email to info@smallcaps.ca.


 

Cobra Venture Corporation (CBV:TSX-V)
Website: www.cobraventure.com
Current Price: $0.20 (coverage commenced May 22/07 - $0.205)


Cobra Venture Corporation has announced that it has entered into an offer to purchase and interim agreement between the Corporation, as vendor, and an arm's length private Alberta corporation related to the proposed sale and purchase of certain undeveloped lands located in the Municipal District of Rocky View No. 44, in the Province of Alberta, consisting of approximately 12.84 acres, more or less, excepting thereout all mines and minerals, for an aggregate cash purchase price of $4,365,600. The Corporation intends to retain ownership to approximately three (3) acres, more or less, of the 15.78 acres of undeveloped land originally acquired by the Corporation, in October, 2012.

 

Pursuant the terms of the Offer to Purchase, the Corporation has received a $50,000 refundable deposit in trust, which shall be applied to the Purchase Price upon closing of the transaction. The Corporation is also entitled to receive a further $200,000 dollars, in trust, within two business days of the waiver or satisfaction of all conditions precedent contained in the Offer to Purchase, with the balance of $4,115,600 payable on the closing date.

 

Closing is subject to receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange Inc., as well as usual due diligence inspections of the Lands by the Purchaser, review by the Purchaser of all title documentation related to the Lands and the Purchaser obtaining suitable mortgage financing to complete the transaction on or before 60 days from the date the Corporation receives board approval for the transaction.

 

Subject to compliance or waiver with all conditions precedent set forth in the Offer to Purchase, it is anticipated that the transaction will close during the first week of July 2014.

 

Subject to completion of the transaction, the Corporation shall be responsible for the payment of a real estate commission of 1.5% of the Purchase Price, plus GST to an arm's length commercial real estate agent situated in Calgary, Alberta.

 

Management believes that the Lands no longer represent any strategic value to the core business of the Corporation and further represents a reasonable return on investment to the Corporation over the 16 month period the Lands were held by the Corporation. Proceeds from the sale of the Lands will be added to the general working capital of the Corporation.

 

QIS Capital: The sale price on this land represents a value of approximately $0.27 per share for Cobra Venture. As at August 31, 2013, the company had positive working capital of $0.06 per share and no long-term debt. Cobra was able to retain 3 acres of the initial real estate purchase while more than recovering its entire purchase price of $3,975,000. We are awaiting further comment from the company at this time.




 

Manado Gold Corp. (MDO:TSX-V)
Website: www.manadogold.com
Current Price: $0.055 (coverage commenced Dec. 6/13 - $0.065)

 

Manado Gold Corp. has filed its financial statements and related management's discussion and analysis for the three and six months ended December 31, 2013 on SEDAR at www.sedar.com.




 

Pennant Energy Inc. (PEN:TSX-V)
Website: www.pennantenergy.com
Current Price: $0.035 (coverage commenced Dec 7/12 - $0.075)

 

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




 

Quinsam Capital Corp. (QCA:CSE)
Current Price: $0.11

 

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, which has just issued the following news release.

 

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Quinsam Capital Corporation has announced the completion of several recent investments.


Quinsam participated in the recent new issue by TransGaming Inc. Roger Dent said that I have been an investor in TransGaming in the past and I have followed the company's progress for many years. While I have not always chosen to be a holder of TransGaming shares, the recent new issue was in my opinion a particularly good time for Qunisam to make an investment.

 

Quinsam started to build a position in Cematrix Corporation during late 2013 when the stock seemed to be suffering from typical small cap year-end selling pressure. The company recently completed the purchase of its position. Cematrix is a manufacturer and supplier of technologically advanced cellular concrete products with applications in a variety of markets, including oil and gas construction and infrastructure construction. Cellular concrete provides a cost and labour saving solution for various construction applications. Applications for cellular concrete include tunnel grouting; bridge abutment and retaining wall backfill; insulation of shallow utilities, roads and runways; insulation and/or structural foundations for tank bases and facilities; and as a floating base over weak and unstable or seismic prone soils, for roads and other types of infrastructure.


Quinsam added a stake in In-Touch Survey Systems Ltd. In-Touch develops managed mobile software technology and services for clients that need mobile, real-time information about customer leads, customer feedback, operational compliance, employee feedback and new product analysis. In-Touch has developed comprehensive software platforms including In-Touch Apps, EventMatrix and Unified Insights that provide for the rapid development of data collection programs including mystery shopping programs, mobile forms creations and real-time online reporting.

 

The company bought a small position in Atico Mining Corporation. While not focused on the resource sector, management saw an opportunity in Atico to obtain an unrecognized new producer just as it was starting to get some market attention. While this position has only been held for a few weeks, Quinsam is already up about 20% on this purchase.

 

Performance Update

 

Quinsam would also like to take this opportunity to update investors on the company's recent investment performance.

 

As at the end of January 2014, the unaudited total value of the Quinsam's cash and equity investments was approximately $913,000. During the month of February, the value of these investments grew to approximately $982,000.

 

Roger Dent stated, We are pleased with our overall investment performance to date. In February, important contributors to performance included Atico, Cematrix and Enterprise Group, Inc. The small cap hangover from 2008 finally seems to be abating and there appears to be growing overall appetite for small cap investments. At the same time, we continue to find many companies which we believe are undervalued in the market.


Update on Private Placement

 

Quinsam recently announced that it will proceed with a best efforts non-brokered private placement financing of up to 50 million common shares of Quinsam at a price of $0.10 per share for gross proceeds of up to $5,000,000. The proceeds of the Offering will be used for investment activities and working capital purposes.


In connection with this placement, Quinsam may pay an 8% cash finder's fee to certain eligible arm's length finders. The Offering is subject to certain conditions, including, but not limited to, the receipt of all necessary approvals, including the approval of the Canadian Securities Exchange (CSE). There can be no assurance that the private placement will be completed as proposed.


The CEO of Quinsam, Roger Dent, has indicated his intention to participate as a buyer in the offering.


The company expects to close funds in the private placement in about 10 days.




 

Virtutone Networks Inc. (VFX:TSX-V)
Website: www.virtutone.com
Current Price: $0.55 (coverage commenced Sep. 9/11 - $0.10)

 

Virtutone Networks Inc. has announced that the company has been able to increase its overall gross margins from 4% to 6% through the implementation of new technology. The implementation was successful over the month of February and the Company expects to maintain those margins moving forward.


Virtutone generated revenues of approximately $7.7 million for the month of February, down from the previous month as the company focused on implementing the new technology and because February is a shorter month.


We are very excited that the new technology was able to produce such a significant improvement in margins, the bulk of which flow to the bottom line, said Jason Allen, Chief Executive Officer of Virtutone. Now we will go back to focusing on increasing revenues and profits.


QIS Capital: Virtutone continued to generate growth in its daily sales rate during February and significantly increased margins which came as a bit of a surprise. We are not anticipating year-end financials until May 2014 but this is an exciting time of growth 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 500,278 shares, 277,778 warrants, and 650,000 options of Blackbird Energy Inc., 496,000 shares of Cobra Venture Corporation, 119,000 shares of Manado Cold Corp., 63,000 shares and 200,000 options of Pennant Energy Inc., 1,010,000 shares of Quinsam Capital Corp. and 582,000 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 - 2014 QIS Capital Corporation.

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