QIS Update #8 2014 - March 12th 2014
Included in this update:
- QIS Capital Trading Summary Portfolio – up over 100%
- Blackbird Energy and Pennant Energy receive interim court order for proposed business combination
- NTG Clarity Networks provides shareholder update, establishes a $3.5 million credit facility and $1.2 million bonding facility with Royal Bank
- Virtutone Networks appoints new CFO
The QIS Capital Trading Summary Portfolio has reached a 100% gain since its inception in January 2012. To date in 2014, the portfolio has gained over 23%. Follow the buy and sell trades in the portfolio at: www.smallcaps.ca/trading-summary.
Direct link to current portfolio holdings and prices: www.qiscapital.com/images/portfolio.pdf
Please feel free to email us anytime at firstname.lastname@example.org or call us at (250) 377-1182. We look forward to your comments, questions, and feedback.
Blackbird Energy Inc. (BBI:TSX-V)
Current Price: $0.10 (coverage commenced Aug 19/11 - $0.18)
Pennant Energy Inc. (PEN:TSX-V)
Current Price: $0.055 (coverage commenced Dec 7/12 - $0.075)
Blackbird Energy Inc. and Pennant Energy Inc. have announced that they have obtained an Interim Order of the Supreme Court of British Columbia with respect to their proposed plan of arrangement pursuant to the Business Corporations Act (British Columbia). The TSX Venture Exchange has also conditionally approved the arrangement.
As announced in the companies' joint news release dated February 18, 2014, Blackbird and Pennant entered into an arrangement agreement dated February 17, 2014, whereby Blackbird will acquire all of the outstanding shares of Pennant from the shareholders of Pennant in exchange for common shares of Blackbird on the basis of one common share of Pennant for 0.42857 of one common share of Blackbird. This transaction is expected to result in Pennant becoming a wholly-owned subsidiary of Blackbird and Blackbird continuing to trade on the TSX Venture Exchange under the trading symbol BBI. The consolidated entity is expected to carry on business as an oil and liquids focused emerging producer.
The closing of this transaction remains subject to a number of conditions, including the receipt of the requisite shareholder approval, final approval of the Supreme Court of British Columbia and the TSX Venture Exchange, and satisfaction of certain other closing conditions that are customary for a transaction of this nature.
A special meeting of shareholders of Pennant will be held at 10:00 am (Vancouver time) on April 4, 2014 at Suite 900 - 885 West Georgia Street, Vancouver, British Columbia. At the Pennant Meeting, the Pennant Shareholders will be asked to approve the Arrangement. The Arrangement will need to be approved by not less than 66 2/3% of the votes cast by disinterested Pennant Shareholders, voting in person or by proxy at the Pennant Meeting. Registered shareholders of Pennant may exercise rights of dissent in connection with the Transaction in accordance with the Arrangement Agreement and Sections 237 to 247 of the Act. It is a condition to Closing that dissent rights shall not have been exercised with respect to more than 5% of the issued and outstanding Pennant Shares. The Closing is expected to occur within ten days after the Pennant Meeting, provided that all shareholder, court and regulatory approvals are obtained and that all other conditions to Closing have been satisfied.
Pennant has filed its Notice and Information Circular and related meeting materials in connection with the Pennant Meeting on SEDAR at www.sedar.com under Pennant's profile. The Meeting Materials include a fairness opinion dated March 4, 2014 which has been prepared for the special committee of the board of directors of Pennant by Stephen Semeniuk, CFA. In the Fairness Opinion, Mr. Semeniuk concluded that, subject to the assumptions, qualifications and limitations contained in the Fairness Opinion, as of March 4, 2014, the Arrangement was fair, from a financial point of view, to the Pennant Shareholders. Reference should be made to the full text of the Fairness Opinion which is included at Schedule "E" to the Information Circular included in the Meeting Materials.
Blackbird Energy Inc. is a Western Canadian based company that explores, develops and produces oil and natural gas in Western Canada. The Company is managed by a proven technical team. Blackbird trades on the TSX Venture Exchange under the symbol BBI. Blackbird's team is focused on originating new high quality oil projects through the assembly of land positions in Saskatchewan and Alberta.
Pennant is an oil and liquids focused development and production company with non-operated assets located in Saskatchewan, and Alberta.
Further information about Blackbird and Pennant may be found in their respective continuous disclosure documents filed with Canadian securities regulators under each of their profiles on SEDAR at www.sedar.com. A copy of the Arrangement Agreement will be available under both Blackbird and Pennant's profiles on SEDAR at www.sedar.com. In addition, a detailed description of the Arrangement Agreement and the Transaction will be included in the management information circular which will be mailed to Pennant shareholders in advance of the Pennant Meeting and will be filed under Pennant's profile on SEDAR at www.sedar.com.
NTG Clarity Networks Inc. (NCI:TSX-V)
Current Price: $0.395 (coverage commenced Feb. 4/10 - $0.045)
NTG Clarity Networks Inc. has provided shareholders with an update on current operations.
NTG continues to operate at an accelerated pace as the company delivers on previously announced contracts and have begun work on several new projects. At the end of 2013, a couple of significant contracts for resources and managed services came up for renewal. These contract extensions are still in negotiations, but the Customer has requested that NTG continue these services at existing rates until contract extensions have been finalized. The company has been delivering these services uninterrupted for the past few months and has maintained the workload of projects that lead to significantly higher revenues in 2013.
NTG is also pleased to announce that it has delivered the NTS Asset Management and Discovery modules to a new Customer, pursuant to the contract announced in December 2013. The company expects to receive payment for this phase in the next few weeks and NTG has already started work on Phase 2 of the project, which includes business analysis and additional requirements. Phase 2 is expected to be completed and billed by the end of April 2014. This project has opened new opportunities with this Customer that are now being pursued.
NTG had an exhibition booth at MWC (Mobile World Congress) in Barcelona at the end of February 2014. The company focused on presenting its NTS product and Mobile Apps work. This has provided several good leads that management is following up on. Also, the company was able to meet with a few organizations that are interested in discussing partnerships to expand NTG’s global reach.
In early January 2014, NTG hired a senior sales Manager in Toronto to focus on acquiring new customers and expanding NTG business in new areas. This is expected to further diversify the company’s operations outside of the Middle East.
Mr. Ashraf Zaghloul, CEO of NTG Clarity has just returned from a successful trip in the Middle East that included Saudi Arabia, Qatar, and Egypt.
- In Saudi Arabia, Mr. Zaghloul was negotiating the renewal of the existing contracts mentioned above.
- In Qatar, Mr. Zaghloul officially opened NTG’s new office in Qatar. This office will market both the current NTS product and Smart Building products and services, which are in high demand in Qatar due to the construction boom.
- In Egypt, Mr. Zaghloul met with the development staff to set the vision for the NTS product for the next two years. The NTS product will focus primarily on providing a Telecom in a Box solution for Telecom operators while providing an integrated product at a very competitive price advantage. The product would also have a version for the Smart Building and Smart Compounds that is very much in demand in the Middle East and in other developing nations. Mr. Zaghloul was also driving the expansion of the NTG services with current customers in Egypt.
As published earlier this month, NTG has established a $3.5 Million credit facility. This facility enables NTG to focus on winning new projects and growing the business without having to worry about financing the new work.
Management is currently working to finalize the 2013 financial statements for the year ended December 31, 2013. Revenues for 2013 are expected to be approximately $10 million, representing a 100% increase over revenues in 2012. Complete financial results are expected to be published in early April 2014.
We are very pleased with our achievements in 2013. All of the activities mentioned will help NTG to continue to provide quality service to our existing customers, acquire new customers, maintain the growth we achieved last year and work on achieving similar success this year, stated Mr. Zaghloul, NTG’s Chairman and CEO.
NTG Clarity Networks Inc. has announced that it has completed an agreement to establish a $3.5 million credit facility and $1.2 million bonding facility with RBC Royal Bank of Canada, Knowledge Based Industries Banking Group - Ontario.
Today’s announcement is a testament to RBC’s strong focus on this innovative sector that continues to be a catalyst for growth in today’s highly competitive and ever-changing global marketplace, said Eric Leblanc, vice president, knowledge based industries, RBC. In fact, our team is committed to helping successful high-tech companies not only access the bank’s services, but also access venture capital, enter into global markets and facilitate IPOs.
The new facility refinances an existing $1 million facility at a lower interest rate, and adds financing to support NTG’s organic growth, new opportunities and ongoing projects.
The agreement includes:
- $2 million operating line available for general working capital purposes to fund continued growth;
- $1.5 million pre-shipping revolving facility to support pre-shipping costs associated with exports;
- $1.2 million letter of guarantee facility to support bid and performance and payment guarantees for export contracts.
This new facility, in conjunction with the private placement convertible debenture of $872,000 completed in 2013 and the anticipated positive results from 2013, allows NTG to aggressively pursue new opportunities to achieve our growth plan said Ashraf Zaghloul, NTG Clarity Chairman and CEO.
Facilities are supported by Export Development Canada (EDC) with an interest rate at prime plus 1.85% and are secured by a general security agreement over the Company’s assets.
Virtutone Networks Inc. (VFX:TSX-V)
Current Price: $0.56 (coverage commenced Sep. 9/11 - $0.10)
Virtutone Networks Inc. has announced that it has appointed Mr. Sergio Valacco as the new Chief Financial Officer. Mr. Valacco has over 20 years experience with international financial reporting in telecom, utilities and construction industries, with TELUS, EPCOR and Laird Electrical respectively. His knowledge with cash-flow management, Canadian IFRS and US Gap, acquisitions, and extensive process management will assist the company in both its short-term and long-term objectives.
We welcome Sergio to the Virtutone team. His knowledge and experience is just what we were looking for to assist the company now and long term said Jason Allen President and Chief Executive Officer. His experience and high-energy personality and hands-on approach will help us lead Virtutone to new heights.
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 222,500 shares and 650,000 options of Blackbird Energy Inc., 1,192,500 shares of NTG Clarity Networks Inc., 63,000 shares and 200,000 options of Pennant Energy Inc., and 602,000 shares and 212,500 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.