There were no news releases from any NEX company that were picked up by Marketwire on Friday, although there were two bulletins from NEX issues that were included at the bottom of Friday's TSX Venture Daily Bulletins: both involved trading halts. The first bulletin announces that the present trading halt in Emergence Resorts Canada Inc. will continue, "pending receipt and review of acceptable documentation regarding the Qualifying Transaction pursuant to Listings Policy 2.4." The second bulletin, pertaining to Pacific Wildcat Resources Corp. [NEX: PAW.H], mentions a new halt imposed before trading opened, at 6:30 AM PT or 9:30 AM ET, pending news from the company. Canjex Publishing has a webbed copy of the Pacific Wildcat bulletin. PAW.H last closed at 21 cents/share on September 27th.
Canjex has also webbed a news release from Emergence that explains the Qualifying Transaction mentioned above; it's the first of two news releases sent out exclusively through Canjex. Emergence is planning to buy CSP Telecom, a private company incorporated under the laws of Quebec, and has reached an agreement in principle with the owners of the latter company. "The parties have agreed that the total purchase price for all of the issued and outstanding shares of CSP shall be $5-million payable by the issuance of 10 million Class A common shares of Emergence at a deemed price of 50 cents per common share." CSP, according to the release, is a profitable business that reported $353,336 in revenues as of fiscal year 2006, and EBITDA (earnings before interest, tax, depreciation and amortization) in the amount of $78,941. Estimated revenue for FY 2007 is $947,500, and estimated EBITDA is $78,647. This purchase will be financed through Northern Securities Inc., which is acting as sponsor so as to make it a Qualifying Transaction for a Tier 2 Venture listing. The details of the financing reveal that the 50-cent shares of ERS.H are actually units, containing one common share and one purchase warrant (with strike price of 75 cents/share and life of two years) in each unit. The assignation of 50 cents of value to the shares imply that the value of the warrants is negligible as of the time of the financing. The release also states, "The value attributed to CSP may be subject to a valuation conducted by an independent valuator which, in such an event, would be selected and paid by Emergence. Should the independent valuation establish a different value than the purchase price, the purchase price will be adjusted and the number of common shares either reduced or issued accordingly." Emergence last closed on September 26th, at a price of 36 cents/share. More details on this transaction are expected to be released later.
The second news release through Canjex on Friday was from Newstrike Capital Inc. [NEX: NES.H], disseminated in the evening (ET) long after trading closed. It says that the Energy Speculator has "in its Sept. 17, 2007, issue, passes on to subscribers troubling news that talks between Stans Energy Corp. and Newstrike Capital Inc., now $1.05, regarding their reverse takeover broke down." The rest of the release passes on the context of the now-halted deal, which was supposed to be a Qualifying Transaction for Newstrike. NES.H closed at $1.10/share, unchanged since Thursday's close; the $1.05 price referred to in the excerpt was an odd-lot-sized trade of 34 shares, which was the last of the day.
To read about the highlighted NEX stocks for Friday, you can go here.
Saturday, October 6, 2007
Friday, October 5, 2007
Highlighted NEX Stocks For October 5th
Thirty NEX stocks traded on Friday. Of these, 11 advanced, 5 declined and 14 remained unchanged. There were 120 trades. The top trader in terms of raw volume, for the third day in a row, was Global Tree Technologies Inc. [NEX: GTT.H]. The daily volume of GTT.H for Friday was 548,000 shares - much subdued when compared with Thursday's, but close to Wednesday's level. Global Tree fell a penny a share to close at 2 cents/share. According to the TSX Venture closing summary, the top trader in terms of value of shares traded for Friday was Toba Industries Ltd. [NEX: TBG.H]. Toba closed at 13.5 cents/share, up 1 cent/share since Thursday's close. Global Tree placed first on the top-ten list of volume traded divided by total shares outstanding, found below; Toba placed third.
Two NEX stocks traded more than ten times on Friday, and both of them were the same issues found in this category on Thursday: Global Tree and Silvio Ventures [NEX: SIV.H]. Unlike on Thursday, though, these two were tied for first in this category, with eighteen trades each.
Global Tree started off active but, as morning (ET) turned into afternoon, activity faded off. There were four trades in the first half-hour of trading, all at a price of 2.5 cents/share, as were the following two. The next seven trades, starting with the seventh, were all at 3 cents/share, but this recovery to unchanged didn't last the morning: as of the 14th trade, made at about 11:35 AM ET, the price slipped back to 2.5 cents/share, where it stayed until the last trade of the day. That trade pushed the price down to 2 cents/share. To continue with the tabulation used in Thursday's report: 158,000 shares, or $4,740 worth, of Global Tree traded at 3 cents/share on Friday; 372,000 shares, or $9,300 worth, traded at 2.5 cents/share; and, 18,000 shares, or $360 worth, traded at 2 cents/share.
The bulk of trading activity in Silvio's shares was also in the early hours: fourteen out of SIV.H's eighteen trades were within two hours of the open. The same ratio also applies to the number of odd-lot-sized trades: only four of the eighteen were of board-lot size. All of the odd lots were, once again, bought through PI Securities at a somewhat lower price than the trade price for the board lots. The odd-lot'ers all went for 47 cents/share and the board lots all went for 50 cents/share. Two of the board lots, of 1,000 and 5,000 shares at about 10:27 AM ET and 10:39 AM ET respectively, were sold through PI; as noted above, they went for 50 cents/share. Silvio placed tenth of the top-ten daily-turnover list, found below.
The top percentage gainer in Friday's trading was International CHS Resource Corporation [NEX: ICJ.H], which closed at 5.5 cents/share for a gain of 2 cents/share, or 57.14%, on the day. Volume for ICJ.H was 101,000 shares in 5 trades. The first two trades, made within two minutes of each other (between 9:42 and 9:44 AM ET) of 50,000 and 30,000 shares respectively, went at 4 cents/share. TD Securities was the sell-side financial institution for both, suggesting a sold block. The other three trades were made at successively higher prices: 4.5, 5, and 5.5 cents/share. The last two, of 10,000 and 1,000 shares respectively, were made at the the same time, at about 12 noon ET, and had the same buy-side financial institution: Scotia. This suggests a bought block put ICJ.H at the top of the percentage gainers list for Friday.
Friday's top percentage decliner was Devin Energy Corporation [NEX: DVC.H]. Devin closed at 85 cents/share for a decline of 50 cents/share, or 37.03%, on the day. There were ten trades in DVC.H on Friday; nine of them were board-lot sized. Those nine went for prices ranging from 70 cents/share to 85 cents/share, DVC.H's closing price. It was the fourth trade, of 500 shares, that went for the lowest price of the day. After that one, made at about 12:04 PM ET, the price went back to the first board-lot-sized trade's price of 81 cents/share. The prices for the next five ranged from 83 to 85 cents/share. These ten trades were grouped by buy-side financial institution into two groups of three and seven, of 4,000 and 7,500 shares respectively. This suggests two blocks were bought at the much lower prices prevailing for DVC.H with respect to its previous close on Tuesday.
Finally, the above-mentioned list of yesterday's top ten traders, as measured by % of total outstanding shares or daily turnover (all prices in per-share terms):
NOTE: I am not affiliated with the TSX, nor is this blog. The Barrel's Bottom Composite index is not endorsed by the TSX.
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Two NEX stocks traded more than ten times on Friday, and both of them were the same issues found in this category on Thursday: Global Tree and Silvio Ventures [NEX: SIV.H]. Unlike on Thursday, though, these two were tied for first in this category, with eighteen trades each.
Global Tree started off active but, as morning (ET) turned into afternoon, activity faded off. There were four trades in the first half-hour of trading, all at a price of 2.5 cents/share, as were the following two. The next seven trades, starting with the seventh, were all at 3 cents/share, but this recovery to unchanged didn't last the morning: as of the 14th trade, made at about 11:35 AM ET, the price slipped back to 2.5 cents/share, where it stayed until the last trade of the day. That trade pushed the price down to 2 cents/share. To continue with the tabulation used in Thursday's report: 158,000 shares, or $4,740 worth, of Global Tree traded at 3 cents/share on Friday; 372,000 shares, or $9,300 worth, traded at 2.5 cents/share; and, 18,000 shares, or $360 worth, traded at 2 cents/share.
The bulk of trading activity in Silvio's shares was also in the early hours: fourteen out of SIV.H's eighteen trades were within two hours of the open. The same ratio also applies to the number of odd-lot-sized trades: only four of the eighteen were of board-lot size. All of the odd lots were, once again, bought through PI Securities at a somewhat lower price than the trade price for the board lots. The odd-lot'ers all went for 47 cents/share and the board lots all went for 50 cents/share. Two of the board lots, of 1,000 and 5,000 shares at about 10:27 AM ET and 10:39 AM ET respectively, were sold through PI; as noted above, they went for 50 cents/share. Silvio placed tenth of the top-ten daily-turnover list, found below.
The top percentage gainer in Friday's trading was International CHS Resource Corporation [NEX: ICJ.H], which closed at 5.5 cents/share for a gain of 2 cents/share, or 57.14%, on the day. Volume for ICJ.H was 101,000 shares in 5 trades. The first two trades, made within two minutes of each other (between 9:42 and 9:44 AM ET) of 50,000 and 30,000 shares respectively, went at 4 cents/share. TD Securities was the sell-side financial institution for both, suggesting a sold block. The other three trades were made at successively higher prices: 4.5, 5, and 5.5 cents/share. The last two, of 10,000 and 1,000 shares respectively, were made at the the same time, at about 12 noon ET, and had the same buy-side financial institution: Scotia. This suggests a bought block put ICJ.H at the top of the percentage gainers list for Friday.
Friday's top percentage decliner was Devin Energy Corporation [NEX: DVC.H]. Devin closed at 85 cents/share for a decline of 50 cents/share, or 37.03%, on the day. There were ten trades in DVC.H on Friday; nine of them were board-lot sized. Those nine went for prices ranging from 70 cents/share to 85 cents/share, DVC.H's closing price. It was the fourth trade, of 500 shares, that went for the lowest price of the day. After that one, made at about 12:04 PM ET, the price went back to the first board-lot-sized trade's price of 81 cents/share. The prices for the next five ranged from 83 to 85 cents/share. These ten trades were grouped by buy-side financial institution into two groups of three and seven, of 4,000 and 7,500 shares respectively. This suggests two blocks were bought at the much lower prices prevailing for DVC.H with respect to its previous close on Tuesday.
Finally, the above-mentioned list of yesterday's top ten traders, as measured by % of total outstanding shares or daily turnover (all prices in per-share terms):
- Global Tree Technologies Inc. [NEX: GTT.H], closed at 2 cents for a loss of 1 cent - 1.06% of total shares outstanding;
- Gold Star Resources Corp. [NEX: GXX.H], closed at 17.5 cents for a gain of 2 cents - 0.783% of TSO;
- Toba Industries Ltd. [NEX: TBG.H], closed at 13.5 cents for a gain of 1 cent/share - 0.384% of TSO;
- Tapestry Resource Corp. [NEX: TPR.H], closed at 57 cents unchanged - 0.369% of TSO;
- International CHS Resource Corporation [NEX: ICJ.H], closed at 5.5 cents for a gain of 2 cents - 0.346% of TSO;
- ITI World Investment Group Inc. class 'A' [NEX: IWI.H], closed at 48 cents for a gain of 6 cents - 0.205% of TSO;
- Challenger Development Corp. [NEX: CDQ.H], closed at 39.5 cents unchanged - 0.151% of TSO;
- Monster Uranium Corp. [NEX: MU.H], closed at 48 cents unchanged - 0.144% of TSO;
- Devin Energy Corporation [NEX: DVC.H], closed at 85 cents for a loss of 50 cents - 0.141% of TSO;
- Silvio Ventures Inc. [NEX: SIV.H], closed at 50 cents unchanged - 0.116% of TSO.
NOTE: I am not affiliated with the TSX, nor is this blog. The Barrel's Bottom Composite index is not endorsed by the TSX.
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NEX Report for October 4, 2007
On Thursday, the Barrel's Bottom Composite Index for the NEX closed at 86.53, down 0.20 points or 0.231% from its previous close of 86.73. This overall drop obscured a big leap in a NEX stock, which was unusual in that it had the highest volume of shares traded in months. Global Tree Technologies Inc. [NEX: GTT.H] didn't start trading until the afternoon in Eastern-time terms, but by the time the trading day was over, it had traded 61 times. Starting at 2 cents/share as of about 12:46 PM ET, it went up to 2.5 cents/share and, later, 3 cents/share where it closed after a few temporary returns to 2.5 cents/share. The total volume of GTT.H traded today was 1,532,000 shares.
By the time it started to have its influence on the BBCI, though, the index was already down to 86.44. Opening declines within the first minute of trading, of First Idaho Resources Inc. [NEX: FI.H], Mazarin Inc. [NEX: MAZ.H], infrequently-traded Starrex Mining Corporation Ltd. [NEX: STX.H], and Toba Industries Inc. [NEX: TBG.H] of 3, 1.5, 2 and 1.5 cents/share respectively, overwhelmed a 0.5-cent/share opening gain in Golden Hat Resources Inc. [NEX: GHA.H] to push the BBCI down almost four-tenths of a point to end the first minute at 86.32. The first two of the four decliners mentioned above were gainers in their last trades previous to today.
A 1.5 cent/share opening rise in Abitibi Mining Corp. pushed the BBCI up to 84.45 as of about 9:34 AM ET, and a 0.5 cent/share pullback in the same stock pushed the index down to 86.41, where it stayed until about 10:06 AM ET. A half-cent recovery in Toba put the index up above 84.5, and a 7 cent/share opening gain in X-Tal Minerals Corp [NEX: XMT.H] put the index above 86.6. This recovery didn't last, though; the BBCI drifted downwards as late morning turned into early afternoon ET. It wasn't until Global Tree hit 2.5 cents/share, as of about 12:52 PM ET or six minutes after it started trading, that the BBCI got back above 86.5. It was actually Toba, as of 1:50 PM ET, that put the BBCI back to unchanged through a rise to 13 cents/share, even though Global Tree's then-temporary rise to 3 cents/share a minute earlier paved the way for the BBCI to erase its loss at that time.
Even Global Tree's more durable leap back to 3 cents/share as of 2:20 PM ET wasn't enough to keep the BBCI from falling back to a slight loss position, as other decliners dragged it down, such as: Toba through a 0.5 cent/share fall as of about 2:40 PM ET; Gainey Resources Ltd. as of its first trade of the day at about 2:44 PM ET; and, Global Tree itself, which fell back to 2.5 cents/share as of about 2:36 PM ET. The recovery of Global Tree to 3 cents/share marked the end of the trough between 2:30 and 3 PM ET. By the last hour of trading, the BBCI was close to even.
This near-parity didn't survive the last hour, though, as yet another decline in Global Tree to 2.5 cents/share at about 3:39 PM produced a dip in the index, as did a half-cent drop in Gold Star Resources Corp. [NEX: GXX.H] that took it down from a 3 cent/share gain on the day to a 2.5 cent/share gain. The last trade of the day, of Rocher Deboule Minerals Corp. [RD.H] which pushed RD.H down a penny from its previous trade price at about 3:59 PM ET, put the BBCI at its closing value of 86.53.
Here are the hourly values for the Barrel's Bottom Composite Index, rounded to the nearest hundredth of a point:
- 10 AM ET: 86.41
- 11 AM ET: 86.51
- 12 PM ET: 86.45
- 1 PM ET: 86.55
- 2 PM ET: 86.73
- 3 PM ET: 86.61
- 4 PM ET/Close: 86.53
This is the first part of the daily NEX report. The second part covers NEX stocks that have sent out news releases during October 4th and the third part covers NEX stocks of note for that day.
NOTE: I am not affiliated with the TSX, nor is this blog. The Barrel's Bottom Composite index is not endorsed by the TSX.
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News Releases From NEX Companies For October 4th
One news release from a NEX company was picked up by Marketwire on Thursday. The company that released it was one whose stock was halted on Wednesday: Jalna Minerals [NEX: JMA.H]. The news release announced Jalna's acquisition of "up to a 100% interest in certain mineral claims [43 of them] located in the Nonacho Basin, District of Mackenzie, Northwest Territories of Canada (the "Property"), subject to a 3% [net smelter royalty]" held by the three individual vendors of them. None of the sellers were directors or insiders of Jalna, making it an arm's-length transaction. The property is expected to yield economic deposits of uranium. The underlying mineralization that the property partially covers has shown encouraging results from old soil, rock and a trench sample, but there are no current results as of yet. The release itself has further details on the mineralization and historical results; it ends with an announcement of the 2007 annual meeting on Thursday, November 15, 2007 at 11 AM PT in Vancouver. Jalna remained halted for all of Thursday, as confirmed by a release sent out through Canjex Publishing and included at the bottom of Thursday's TSX Venture Daily Bulletins.
Two releases were sent out exclusively through Canjex on Thursday. The first was from Gold Star Resources Corp. [NEX: GXX.H], and it contains two items. First of all, a consulting agreement has been entered into with Patrick Morris of SGM Inc. "SGM will provide consulting, administrative, logistical and management services to the company." Secondly, a $300,000 private placement of 3 million units has been arranged, at a price of 10 cents/unit. Each unit will consist of one common share and one purchase warrant with exercise price of 15 cents/share and life of one year. "The proceeds will be used for general working capital and to identify a transaction that will qualify the company for a Tier 2 standing on the TSX Venture Exchange." GXX.H closed at 15.5 cents/share, up 2.5 cents/share since Wednesday's close.
The second release is from Tri-River Ventures Inc. [NEX: TVR.H]; it announces a $90,000 private placement of 400,000 units, at 22.5 cents/unit if fully subscribed. Each unit consists of one share and a purchase warrant with strike price of 45 cents/share and life of two years. "The proceeds will be reserved for working capital." Regulatory approval is still pending; both the shares and the warrants will be subject to a four-month holding period. TVR.H closed at 30 cents/share, unchanged since it last traded on Monday.
In addition to the above items, there were also SEDAR-filed financial statements announced on Thursday:
To read about the highlighted NEX stocks for Thursday, you can go here.
Two releases were sent out exclusively through Canjex on Thursday. The first was from Gold Star Resources Corp. [NEX: GXX.H], and it contains two items. First of all, a consulting agreement has been entered into with Patrick Morris of SGM Inc. "SGM will provide consulting, administrative, logistical and management services to the company." Secondly, a $300,000 private placement of 3 million units has been arranged, at a price of 10 cents/unit. Each unit will consist of one common share and one purchase warrant with exercise price of 15 cents/share and life of one year. "The proceeds will be used for general working capital and to identify a transaction that will qualify the company for a Tier 2 standing on the TSX Venture Exchange." GXX.H closed at 15.5 cents/share, up 2.5 cents/share since Wednesday's close.
The second release is from Tri-River Ventures Inc. [NEX: TVR.H]; it announces a $90,000 private placement of 400,000 units, at 22.5 cents/unit if fully subscribed. Each unit consists of one share and a purchase warrant with strike price of 45 cents/share and life of two years. "The proceeds will be reserved for working capital." Regulatory approval is still pending; both the shares and the warrants will be subject to a four-month holding period. TVR.H closed at 30 cents/share, unchanged since it last traded on Monday.
In addition to the above items, there were also SEDAR-filed financial statements announced on Thursday:
- Nugget Resources has filings covering fiscal years 2004-6 and most of FY 2007;
- Warwick Communications has filed its latest quarterly statements with accompanying M D & A, and has re-filed the M D & A for the previous quarter;
- International CHS Resources Corp. has filed its interim quarterly statements and accompanying M D & A; and,
- Emergence Resorts Canada Inc. has filed interim quarterly statements but not an accompanying M D & A as yet.
To read about the highlighted NEX stocks for Thursday, you can go here.
Emergence Resort Canada Inc. Files Latest Financial Statements, But Not M D & A, With SEDAR
Emergence Resort Canada Inc. [NEX: ERS.H] has filed its interim unaudited financial statements [PDF file], but not the accompanying M D & A as of yet, for the second quarter of FY '07 that ended June 30th of this year. Emergence has $230,854 in cash as of the end of 2Q '07, as well as total current assets of $241,609 and working capital of $239,289. The cash came from an issuance of $200,000 of stock in the first quarter of FY '07, although as of the end of FY '06, there was also a working capital surplus of $62,743. Largely because of the financing, book value increased to 4.47 cents/share from 1.95 cents/share.
The only revenues for the second quarter of '07 came from interest on the cash, of $1,492 as compared with $1,062 for 2Q '06. Expenses for 2Q '07 decreased to $27,508 from $30,395 as of 2Q '06, thanks almost entirely to a $2,509 decrease in professional fees and a $730 decrease in administrative expenses as compared with the same quarter a year ago. Consequently, net loss shrunk to $26,016, or 0.487 cents/share, from $29,333, or 0.687 cents/share as of 2Q '06.
Trading in ERS.H was recently halted, and still is; its last close was at 36 cents/share on Sept. 26th.
The only revenues for the second quarter of '07 came from interest on the cash, of $1,492 as compared with $1,062 for 2Q '06. Expenses for 2Q '07 decreased to $27,508 from $30,395 as of 2Q '06, thanks almost entirely to a $2,509 decrease in professional fees and a $730 decrease in administrative expenses as compared with the same quarter a year ago. Consequently, net loss shrunk to $26,016, or 0.487 cents/share, from $29,333, or 0.687 cents/share as of 2Q '06.
Trading in ERS.H was recently halted, and still is; its last close was at 36 cents/share on Sept. 26th.
International CHS Resources Corporation Files Interim, Unaudited Statement With SEDAR
The interim unaudited financial statements for International CHS Resources Corporation [NEX: ICJ.H] have been released, for the 3rd quarter that ended September 30 of this year [PDF file.]As of that date, International CHS has negligible cash; almost all of its current assets are in the form of GST receivables: $39,623, as compared with $37,876 as of December 31, 2006. (Results from FY 2006 are audited; none are for FY 2007.) A short term loan of $30,300 made working capital below zero as of the end of 3Q '07: a deficit of $29,753, as compared with a working-capital surplus of $16,844 as of the end of 4Q '06. Also adding to the surplus as of the end of FY '06 was $5,577 cash in a lawyer's trust, depleted to $90 as of the end of 3Q '07. Book value went from positive to negative in 2007 as well: -0.201 cents/share as of September 30th versus +0.157 cents/share as of the end of 2006.
International CHS had no revenue for 3Q '07, as compared with $668 of interest income in 3Q '06. Despite this disappearance, net loss for the quarter shrunk to $17,745 as compared with 3Q '06's $19,186. A $5,607 decrease in general and administrative expenses more than made up for a $2,916 increase in shareholder information and transfer expenses between 3Q '06 and 3Q' 07. Both losses amounted to about 0.1 cents/share. In the latest quarter, the needed cash was supplied by a $7,500 loan advance. Total loan advances for the first nine months of FY '07 have been $30,300, as compared to nil in the first three quarters of FY 2006. (There was, however, a $10,000 share issuance that provided cash in the latter period, with none for FY '07.)
The accompanying M D & A [another PDF file] says that International CHS' mineral claims "were allowed to lapse" in 2006, and an attempted takeover of "a group of Quebec-based transportation and construction companies" fell through in early 2007, leading to International CHS's listing on the NEX. It also explains that the shrinkage in administrative expenses resulted from a $5,607 drop in general office expenses. Shareholder information costs went up because an annual general meeting was held in 2007, while one was not held in 2006. The loan advance came through a director. International CHS last traded on Wednesday, and closed on that day at 3.5 cents/share.
International CHS had no revenue for 3Q '07, as compared with $668 of interest income in 3Q '06. Despite this disappearance, net loss for the quarter shrunk to $17,745 as compared with 3Q '06's $19,186. A $5,607 decrease in general and administrative expenses more than made up for a $2,916 increase in shareholder information and transfer expenses between 3Q '06 and 3Q' 07. Both losses amounted to about 0.1 cents/share. In the latest quarter, the needed cash was supplied by a $7,500 loan advance. Total loan advances for the first nine months of FY '07 have been $30,300, as compared to nil in the first three quarters of FY 2006. (There was, however, a $10,000 share issuance that provided cash in the latter period, with none for FY '07.)
The accompanying M D & A [another PDF file] says that International CHS' mineral claims "were allowed to lapse" in 2006, and an attempted takeover of "a group of Quebec-based transportation and construction companies" fell through in early 2007, leading to International CHS's listing on the NEX. It also explains that the shrinkage in administrative expenses resulted from a $5,607 drop in general office expenses. Shareholder information costs went up because an annual general meeting was held in 2007, while one was not held in 2006. The loan advance came through a director. International CHS last traded on Wednesday, and closed on that day at 3.5 cents/share.
Warwick Communications Re-Files Its Quarterly And Year-End Financials
Warwick Communications, a NEX company currently suspended due to cease-trade orders issued against it by both the Alberta and the B.C. Securities Commissions, has sent out releases that announce the re-filing of the M D & A for the first quarter of FY '07 [PDF file] and the filing of both the interim unaudited financial statements [PDF file] and the accompanying M D & A for the second quarter of this fiscal year [another PDF file.] The first quarter ended March 31st, and the second quarter ended June 30th. An accompanying news release explains the re-filing of the first document: "The financial statements for the quarter ended March 31, 2007, were revised to ensure that ending deficit on the income statement reconciled to the deficit balance on the balance sheet. The revisions to the management's discussion and analysis for the quarter ended March 31, 2007, and the year ended Dec. 31, 2006, were substantially to include and expand on discussion of the corporation's disclosure controls and procedures and internal controls over financial reporting." The release ends with a disclosure of the cease-trade orders and states that the company is trying to get them revoked.
Warwick, unusually for a NEX company, has listed in its current assets $400,000 of inventory. This figure is unchanged as of the second quarter of FY '07, ending June 30th of this year, with respect to the last quarter of '06 ending Dec. 31st. Its current liabilities are larger than its current assets, resulting in a working-capital deficit of $126,460, down from a deficit of $70,629 as of 2Q '06. Using a different method, roughly equivalent to omitting inventories from the current liabilites, the M D & A's numbers for the working capital deficiencies are $517,208 for 2Q '07 and $461,377 for 4Q '06. Book value as of June 30th '07 is -2.10 cents/share, as compared with -1.17 cents/share as of June 30th/06.
Also unusually for a NEX company, Warwick has revenue, even though quarterly revenue is down sharply from the same period in '06: $14,016, as opposed to $62,908 in 2Q '06, not including $5,462 in government assistance in the earlier period. (There was no government assistance for FY '07.) Expenses, however, were larger than the revenue, giving rise to a loss for both periods. Selling and promotion expenses for 2Q '07 were $10,000; for 2Q '06, they were $17,499. Production expenses were zero for 2Q '07, and were $26,259 in 2Q '06. Gross profit, before administration expenses and depreciation, was: $4,016 for 2Q '07 and $24,612 (or $19,150 net of government assistance) for 2Q '06.
For the first two quarters of '07, revenue net of government assistance was $33,730 and expenses before administration and depreciation were $25,000, leaving a gross profit of $8,730 net of government help [of $5,462.] For the first two quarters of '06, the comparable figures were: revenue of $94,656 net of government assistance [of $27,343] and expenses before administrative and depreciation of $94,725, for a gross loss of $69 before proceeds from government cheques. For 2Q '07, administration costs ate up the gross profit and then some; depreciation added to the loss somewhat to yield a quarterly loss of $21,651 as compared to a loss of $44,622 for 2Q '06. The loss for the first half of '07 was $55,831; for the first half of FY '06, it was $100,542. 2Q '07 was the only period when the net loss per share was below a cent/share: for 2Q '06, it was a penny per share. The net loss for the first half of FY '07 was 1 cent/share; for the first half of FY '06, it was 2 cents/share including government assistance. The M D & A attributes the shrinkage of revenues to increased returns in 2Q '07.
Warwick has no cash - in fact, it has recurrent bank overdrafts. As of June 30/07, the overdraft (or cash deficit) was $4,440, up from a deficit of $4,986 as of June 30/06. The company is being kept afloat, cash-wise, by advances from directors. These advances have shrunk to a little more than half of 2Q '06's level: $8,750 as opposed to 2Q '06's $14,705. Advances from directors for the first half of FY '07 totaled $14,705, as compared with $25,527 in 2Q '06. Note 2 of the financials specifies: "Amounts due to directors are non interest bearing and are due on demand."
The M D & A starts off with a qualified assessment of its disclosure procedures: "[Warwick] has a small Board and only two officers with varying degrees of knowledge concerning the various regulatory disclosure requirements. The Corporation is not of a sufficient size to justify a separate department or one or more staff member specialists in this area. Therefore the Corporation must rely upon its advisors/consultants to assist it and as such they form part of the disclosure controls and procedures.... While the Corporation believes it has adequate disclosure controls and procedures in place, lapses in the disclosure controls and procedures could occur and/or mistakes could happen. Should such occur, the Corporation will take whatever steps necessary to minimize the consequences thereof." (This statement seems to refer to the re-filing, but isn't confined to that.)
Next to be discussed is its line of business. The revenue generator of Warwick Communications is publishing; the company has produced over 300 books, calenders and CDs aimed at the consumer. These are distributed to bookstores on a consignment basis. The distributor Warwick used changed several times due to bankruptcies, which has put Warwick's fortunes in some peril. The current distributor, Perseus Distribution, is a United States company; dealing with it involves border hassles. This distributor, though, hasn't foundered as of the time of the writing of the M D & A. Also bedeviling Warwick is a shortened turnaround time of returned consignment orders, typically to 90 days, as well as recent difficulties in the book-retailing sector. Attempts by Warwick's in-house sales force to turn things around were, in the M D & A's words, "disappointing," to the point where no further materials were produced as of March 30 of this year. Also explained in the M D & A is the reason behind the cease-trade orders, both issued in June of 2005: failure to file financial statements in a timely manner. These two filings make Warwick current in this area, and constitute the grounds for an application to revoke both orders.
The discussion of the earnings in the M D & A ends, before describing measures to cut expenses through stopping production and reducing lease costs, with this statement: "There have been no defaults by the Corporation to date, but the Corporation’s arrears are substantial."
UPDATE: Copies of Warwick's 2005 M D & A [PDF file] and 2006 M D & A [PDF file] are also webbed. In each of them is an explanation for the delays in filing that brought the cease-trade orders down, although the one from FY 2005's, quoted below, is more detailed in the final paragraph:
Warwick, unusually for a NEX company, has listed in its current assets $400,000 of inventory. This figure is unchanged as of the second quarter of FY '07, ending June 30th of this year, with respect to the last quarter of '06 ending Dec. 31st. Its current liabilities are larger than its current assets, resulting in a working-capital deficit of $126,460, down from a deficit of $70,629 as of 2Q '06. Using a different method, roughly equivalent to omitting inventories from the current liabilites, the M D & A's numbers for the working capital deficiencies are $517,208 for 2Q '07 and $461,377 for 4Q '06. Book value as of June 30th '07 is -2.10 cents/share, as compared with -1.17 cents/share as of June 30th/06.
Also unusually for a NEX company, Warwick has revenue, even though quarterly revenue is down sharply from the same period in '06: $14,016, as opposed to $62,908 in 2Q '06, not including $5,462 in government assistance in the earlier period. (There was no government assistance for FY '07.) Expenses, however, were larger than the revenue, giving rise to a loss for both periods. Selling and promotion expenses for 2Q '07 were $10,000; for 2Q '06, they were $17,499. Production expenses were zero for 2Q '07, and were $26,259 in 2Q '06. Gross profit, before administration expenses and depreciation, was: $4,016 for 2Q '07 and $24,612 (or $19,150 net of government assistance) for 2Q '06.
For the first two quarters of '07, revenue net of government assistance was $33,730 and expenses before administration and depreciation were $25,000, leaving a gross profit of $8,730 net of government help [of $5,462.] For the first two quarters of '06, the comparable figures were: revenue of $94,656 net of government assistance [of $27,343] and expenses before administrative and depreciation of $94,725, for a gross loss of $69 before proceeds from government cheques. For 2Q '07, administration costs ate up the gross profit and then some; depreciation added to the loss somewhat to yield a quarterly loss of $21,651 as compared to a loss of $44,622 for 2Q '06. The loss for the first half of '07 was $55,831; for the first half of FY '06, it was $100,542. 2Q '07 was the only period when the net loss per share was below a cent/share: for 2Q '06, it was a penny per share. The net loss for the first half of FY '07 was 1 cent/share; for the first half of FY '06, it was 2 cents/share including government assistance. The M D & A attributes the shrinkage of revenues to increased returns in 2Q '07.
Warwick has no cash - in fact, it has recurrent bank overdrafts. As of June 30/07, the overdraft (or cash deficit) was $4,440, up from a deficit of $4,986 as of June 30/06. The company is being kept afloat, cash-wise, by advances from directors. These advances have shrunk to a little more than half of 2Q '06's level: $8,750 as opposed to 2Q '06's $14,705. Advances from directors for the first half of FY '07 totaled $14,705, as compared with $25,527 in 2Q '06. Note 2 of the financials specifies: "Amounts due to directors are non interest bearing and are due on demand."
The M D & A starts off with a qualified assessment of its disclosure procedures: "[Warwick] has a small Board and only two officers with varying degrees of knowledge concerning the various regulatory disclosure requirements. The Corporation is not of a sufficient size to justify a separate department or one or more staff member specialists in this area. Therefore the Corporation must rely upon its advisors/consultants to assist it and as such they form part of the disclosure controls and procedures.... While the Corporation believes it has adequate disclosure controls and procedures in place, lapses in the disclosure controls and procedures could occur and/or mistakes could happen. Should such occur, the Corporation will take whatever steps necessary to minimize the consequences thereof." (This statement seems to refer to the re-filing, but isn't confined to that.)
Next to be discussed is its line of business. The revenue generator of Warwick Communications is publishing; the company has produced over 300 books, calenders and CDs aimed at the consumer. These are distributed to bookstores on a consignment basis. The distributor Warwick used changed several times due to bankruptcies, which has put Warwick's fortunes in some peril. The current distributor, Perseus Distribution, is a United States company; dealing with it involves border hassles. This distributor, though, hasn't foundered as of the time of the writing of the M D & A. Also bedeviling Warwick is a shortened turnaround time of returned consignment orders, typically to 90 days, as well as recent difficulties in the book-retailing sector. Attempts by Warwick's in-house sales force to turn things around were, in the M D & A's words, "disappointing," to the point where no further materials were produced as of March 30 of this year. Also explained in the M D & A is the reason behind the cease-trade orders, both issued in June of 2005: failure to file financial statements in a timely manner. These two filings make Warwick current in this area, and constitute the grounds for an application to revoke both orders.
The discussion of the earnings in the M D & A ends, before describing measures to cut expenses through stopping production and reducing lease costs, with this statement: "There have been no defaults by the Corporation to date, but the Corporation’s arrears are substantial."
UPDATE: Copies of Warwick's 2005 M D & A [PDF file] and 2006 M D & A [PDF file] are also webbed. In each of them is an explanation for the delays in filing that brought the cease-trade orders down, although the one from FY 2005's, quoted below, is more detailed in the final paragraph:
On June 17, 2005, the Executive Director of the Alberta Securities Commission issued the cease trade order under section 198 of the Securities Act (Alberta) in respect of the securities of the Corporation. On June 8, 2005 the British Columbia Securities Commission issued a cease trade order.The Corporation was cease traded due to the failure of the Corporation to file, with the Executive Director of the Alberta Securities Commission, interim unaudited financial statements for the period ended March 31, 2005, as required under the Securities Act (Alberta).
The interim unaudited financial statements for the period ended March 31, 2005 were not filed due to a health condition developed by the Corporation’s auditor, operating as a sole practitioner. Interim unaudited financial statements and annual audited financial statements were not filed for the periods subsequent to the cease trade order. The Corporation has not changed auditors out of a sense of loyalty to such auditor in a difficult time and the fact that the auditor’s medical condition was more serious and continued longer than expected.
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