June 7, 2019 - QUIS reported Q1/19 revenue of $4.0M, with adj. EBITDA of $223K (5.6% margins). Off the back of Microsoft cloud assessment pipeline momentum, QUIS closed five net new cloud migration projects in Q1/19. Gross margin for Q1/19 was 40.0%, with internal utilization rates in excess of 80%. During Q1/19, QUIS managed 65 customer engagements, including 52 Microsoft Azure Cloud Assessments and 13 new customer projects in Microsoft Azure, Office 365, and blockchain custom development. QUIS announced the acquisition of CRG, a leading provider of Microsoft technology, corporate consulting, and business software and systems based in Ottawa, Ontario. For 2018, CRG generated revenue of ~ C$7.8M (30% recurring), with adj. EBITDA of ~C$3M (38.5% margins). For 30+ years, CRG’s seasoned leadership team and host of talented employees (~36) have been delivering solutions in Microsoft Dynamics, Microsoft SharePoint, business intelligence and employee performance management (EPM). QUIS announced it has won the 2019 Microsoft Country Partner of the Year Award for the U.S. QUIS was honored among a global field of top Microsoft partners for demonstrating excellence in innovation and implementation of customer solutions based on Microsoft technology. The CRG deal creates a one-stop Microsoft shop with a solid foundation from which to build; we expect QUIS to announce further acquisitions in the near-term (“looking for targets on the East and West coasts”). As shown by Exhibits 2 and 3, we see considerable leverage in the business model as QUIS can now sell Azure Assessments to the CRG customer base. On consensus estimates, QUIS is trading at a 2020E EV/Sales of 0.6x versus its North American IT Services comparables trading at 1.4x.