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QIS Update #8 2015 - May 27th 2015

Included in this update:

  • Newlox Gold Ventures announces first gold sale
  • NTG Clarity Networks releases record Q1 results



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Newlox Gold Ventures Corp. (LUX:CSE)
Current Price: $0.05 (coverage commenced March 31/14 - $0.05)


Newlox Gold Ventures Corp. has announced its first sale of gold and its successful contaminant recovery since commissioning its tailings remediation program.

Newlox reports first revenue of C$40,020 has been received along with recovery of meaningful amounts of mercury. This achievement has validated the company’s business model and paves the way for ramping up of processing operations.

In addition to the revenue, the company is successfully remediating mercury contamination, which is a strong validation of the company’s environmental business model and a meaningful social benefit to local stakeholders.


Newlox has a comprehensive plan to incrementally increase gold doré output toward its stated objectives and plans to frequently update its shareholders as it progresses.

QIS Capital: Newlox has been slower than expected to the starting line but the company is now producing revenues. While we are still in the early phases, management is working on ramping up both throughput and production. This is not the typical mining company which has been stuck in the cellar for three years because of limited capital for exploration. Newlox is generating cash flow and expects to be generating significant earnings later this year. With a market capitalization of only $2.3 million, Newlox now has assets and improving financials in place to improve shareholder value going forward.


NTG Clarity Networks Inc. (NCI:TSX-V)
Current Price: $0.40 (coverage commenced Feb. 4/10 - $0.045)


NTG Clarity Networks Inc., a world leader in the telecommunications OSS/BSS market, has reported record first quarter 2015 financial results.

First Quarter highlights:

  • 71% increase in revenues to $5.0 million
  • working capital of $7.0 million ($0.19 per share) and no long-term debt
  • significant reduction in current bank debt from $3.52 million at December 31, 2014 to $2.65 million at March 31, 2015
  • strong order backlog


During the first quarter of 2015, NTG Clarity generated record revenues of $5,002,161 as compared to $2,933,749 in the same period last year, an increase of 71%. The significant increase in revenues was primarily from contracts with existing clients that were expanded and renewed in 2014. For Q1, 2015, revenue was comprised of 53% professional services and 47% product related sales, compared to 79% and 21% respectively for the same period last year.


The company reported a 257% increase in net income to $722,489 or $0.020 per share for the three months ended March 31, 2015, compared to net income of $202,502 or $0.006 per share for the comparable period last year.


As at March 31, 2015, NTG Clarity had positive working capital of $7,017,573 and no long-term debt.

  3 Months Ended Mar. 31
  2015 2014
Revenues $5,002,161 $2,933,749
Cost of Sales 3,247,342 1,645,970
Gross Profit 1,754,820 1,287,779
Selling and G&A Expense 933,168 1,000,158
Forex Loss (Gain) (302,070) (260,897)
Stock Based Comp. Expense 28,853 106,806
Net Income before Tax 909,982 274,002
Income Taxes 187,493 71,500
Net Income 722,489 202,502
      per share $0.020 $0.006

(as at March 31, 2015)
Current Assets $ 13,256,257
Total Assets 15,884,333
Current Liabilities 6,238,684
Long-Term Debt nil
Shareholders' Equity 9,645,649


During the first quarter of 2015, NTG Clarity collected a significant amount of receivables (over $5.5 million or 49% of the $11,297,839 receivable value at December 31, 2014. Subsequent to quarter end, the corporation has collected an additional $2.9 million.


Looking towards the future, NTG Clarity remains committed to its growth strategy and continues to focus on growing organic operations, expanding its marketing reach geographically and enhancing the company’s product offerings. Management is also looking to increase NTG’s reach through acquisitions and/or partnerships with global system integrators.


In an unrelated matter, the Company announced the following management will have share options issued; Kristine Lewis; 100,000 options; M. Adel Zaghloul; 100,000 options; and Ashraf Zaghloul; 100,000 options. Each option will be exercisable at a price of $0.30 per share and will vest upon issuance.


QIS Capital: Q1 results were significantly higher than management’s outlook provided a month ago. All measures showed substantial improvement during the quarter including revenues, earnings, shareholders’ equity, accounts receivable, and cash balance. Without the writedowns in Q4, NTG Clarity’s trailing 12 month earnings would be over $0.08 per share on a fully taxed basis. $0.08 eps is also consistent with annualized Q1 results although financial results can differ on a quarter to quarter basis. Assuming $0.08 eps, NTG Clarity would be trading at just 5 times earnings ignoring the fact that the company has no long-term debt and positive working capital of $0.19 per share. Adjusted for working capital, NTG Clarity would be trading at only 2.6X earnings.


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 2,477,000 shares and 2,437,500 exercisable warrants of Newlox Gold Ventures Corp. and 1,289,500 shares and 100,000 options 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 - 2015 QIS Capital Corporation.

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