CSE had the pleasure and honour of visiting the beautiful country of Israel from November 5th to 10th. The visit was a collaboration between CSE, OTC Markets, and OTC Israel. Also joining CSE on the trip were Bernard Pinsky of Clark Wilson LLP, and David Danziger of MNP LLP.
One of the primary goals of the visit was to connect with the Israeli business community and gain a deeper understanding of the capital markets needs of their world-class medical and technology startup ecosystem.
On the docket for this trip were meetings with local business influencers including funders, law firms, accountants, and advisors. Within just a few interactions, however, it became readily apparent that there was a high degree of alignment between the Israeli start-up ecosystem and the Canadian capital markets. The ability of the CSE to serve as a conduit for North American public venture capital was a message that resonated throughout many of the interactions during the visit.
Nowhere was this more evident than at the “Raising Capital and Taking your Company Public in North America” session which attracted a full room of technology company operators and various professional advisors. Engagement during the event was extremely encouraging and the wealth of follow-up and follow-on interest has set the stage for continued efforts to explore building bridges in the future.
However, the most encouraging insight from the trip was the demonstration of intellect and inspiration driving many of the projects that we had the pleasure of reviewing. As the Exchange for Entrepreneurs, it was clear to the CSE team that the entrepreneurial spirit and drive were thriving in Israel’s startup communities and these were also responsible for advancing many of the projects we reviewed.
Whether it was an innovative application of cannabis oils, crowdsourced intelligence and collaboration using SAAS, or surgical implants, there was no shortage of innovation on display during our short stay.
CSE looks forward to its next visit to Israel which will undoubtedly occur in the very near future. We look forward to continuing to build bridges with the “Startup Nation” and are once again appreciative of the positive response and hospitality shown during our visit.
To view more pictures and highlights from our visit, click here.
EnviroLeach Technologies (CSE:ETI) is shaking up the mining industry by offering an environmentally friendly alternative to widely used toxic methods of extracting gold from ores and electronic waste.
Many miners rely on cyanide and acid based leaching to recover precious metals from ores, concentrates and electronic waste. More than 76% of all gold is produced via hydrometallurgical extraction that utilizes cyanide.
While cyanide is an effective extraction medium due to its high gold recoveries and low cost, it is also potentially deadly to humans as well as fish, birds and other wildlife if used incorrectly.
EnviroLeach is trying to change this by producing a non-cyanide, non-acid based formula that is not only eco-friendly but actually contains food-grade additives that are fit for human consumption as nutritional supplements and medicines, including the treatment of some cancers.
Chief Executive Officer Duane Nelson says the formula is mixed with tap water so you can “effectively drink it” before the solution is chemically altered using electrical currents passing through diamond based electrodes supplied by De Beers.
“We’re really the only company that offers any type of environmentally friendly solution for the recovery of metals for both the mining and e-waste sectors,” Nelson says.
EnviroLeach has proven in recent tests that along with being better for the environment, its formula is also just as effective as cyanide leaching for ores and concentrates, and hot acid solutions for e-waste.
During seven months of extensive hydrometallurgical tests of its formula on electronic waste, the company achieved gold recoveries of over 90% in periods of less than two hours.
Electronic waste, or e-waste, includes devices such as mobile phones, TVs and computer components that are thought to contain as much as 7% of the world’s gold.
EnviroLeach found that when it tested its formula on e-waste – specifically printed circuit board assemblies (PCBA) used in electronic devices – it provided similar leach kinetics to conventional acid based extraction methods.
In contrast to current cyanide and acid based extraction, the study found the EnviroLeach reagent was safer to handle and functioned just as effectively at low temperatures and near neutral pH levels.
The formula is also cost-effective because it can be reused. “Not only does it offer an environmentally friendly solution but it offers a sustainable solution,” Nelson says.
The company has caught the attention of more than 140 mining firms, manufacturers and recyclers of electronics in more than 17 different countries.
While he wouldn’t name any names, Nelson states the group is in talks with some large clients in mining and some of the biggest manufacturers in e-waste.
“Everybody that we talk to is very excited by this technology,” he says. “In the mining sector, there’s been such a lack of innovation. This is the most exciting innovation since the advent of cyanide.”
EnviroLeach, spun out of Iberian Minerals in December 2016, has started construction of a 10 tonne per day e-waste processing plant with Mineworx Technologies. It will have initial annual capacity of 2,500 tonnes of PCBAs, making it the largest and most environmentally friendly chemistry-based e-waste processing facility in North America.
The plant, which is expected to be completed by the end of Q4 2017, will handle all aspects of the e-waste recycling process, including material pre-treatment, shredding, grinding, leaching and metal extraction.
Operating costs, capital costs, development timelines and permitting procedures are expected to be much lower than those associated with a typical mining project.
EnviroLeach believes e-waste recycling will play a significant role in the coming decade as the volume of electronic products going into landfills continues to grow at a worrying rate.
“Apple, Microsoft, DELL, CISCO and others are all looking for environmentally responsible recycling alternatives for their components,” Nelson says.
The company sees a continued rise in demand for gold in electronics as the number of mines is limited, the costs are higher, and the mines are often located in challenging political and geographic locations. Nelson says that by using the company’s formula, miners will also be able to set up shop in areas that are prohibited from using cyanide.
He also believes urban mining provides tremendous opportunity. “Previously, the only way to get gold out of e-waste was to put it into a smelter or use hot acid solutions, which is not cost effective. It’s not sustainable, and not healthy for the environment,” Nelson explains.
Young entrepreneurs are typically long on ideas, short on business experience and lack capital resources.
Incubator fund Victory Square Technologies (CNSX:VST) is a potential answer to their prayers.
Victory Square not only invests in innovative entrepreneurs, but provides them with a network of mentors, distribution partners, education programs, access to over 80 accelerators globally, and various other resources.
“We believe tech has become commoditized, which makes distribution and acquisition so important,” says Victory Square chief executive officer Shafin Tejani.
The Canadian company might be better known to some investors as Fantasy 6 Sports, which listed on the Canadian Securities Exchange in May 2016.
Change in busines model occasioned a change of name
In June of this year it changed its name to formally reflect the switch in business model to a venture builder that creates, funds and empowers entrepreneurs predominantly focused on blockchain technology, virtual reality, artificial intelligence, personalized health, gaming and film.
“Our vision is to continue to build a profitable portfolio of technology companies by giving them access to our resources that help accelerate growth,” says Tejani.
The genesis of Victory Square goes back further than 2016, however.
In 2007, Tejani founded Victory Square Labs, and built a successful track record funding seed-stage tech companies with exceptional entrepreneurs and high growth potential.
Successes included BTL Group; Tantalus Labs; V2 Games; a Film Fund deal with Unified Pictures; and partnerships with Launch Academy, Foxwoods Casino, BC Diabetes, and others.
“Given our record of successful results, we decided to create a public portfolio to scale faster. The first company the public vehicle targeted was Fantasy 6 Sports due to its high growth potential and the fact that sports and mobile gaming is global, it transcends geography, language, culture, etc.,” Tejani explains.
The fantasy sports company was, if you like, the advance guard for the rest of the Victory Square army.
“The entrepreneurs, IP [intellectual property], experience, talent, customers and partnerships that we established in these diverse verticals laid the solid foundation for the current and future portfolio of companies in Victory Square Technologies,” Tejani says.
The management team has broad experience in depth
Key to the company’s business proposition is the management team, which has a broad range of experience that matches the company’s areas of specialization.
The team includes former executives in professional sports, entertainment, video, media and film, along with leaders in technology, immersive sports, casinos, horse racing and gaming.
Tejani has successfully launched more than 40 start-ups in 21 countries, employing hundreds of people and generating more than US$100 million in annual revenues.
He’s been there, done it, and he’s not only bought the T-shirt but probably knows the people who designed it and the creators of the technology they used to produce it.
The executive team includes seasoned entrepreneurs and FansUnite co-founders Darius Eghdami and Duncan McIntyre, a chartered accountant and lawyer respectively, who focus on corporate development and operations.
Director Howard Blank has been an executive of the gaming and entertainment sector for more than 30 years, most recently serving as vice president of Media, Entertainment and Responsible Gaming for the Great Canadian Gaming Corporation.
Fellow director Tom Mayenknecht’s career spans journalism, television, professional tennis, executive management leadership with both the Toronto Raptors and Vancouver Grizzlies of the National Basketball Association, and the start-up of what is now Rogers Arena. He’s probably not the guy to challenge to a game of tennis at the office party.
Peter Smyrniotis, another director, is described as a “technologist”, as well as an entrepreneur and commercialization and growth professional based in Vancouver.
Tejani is adding to the depth of the team as his portfolio grows and expects to announce some pedigree additions in the near term.
The team also leans heavily on thought leaders at the companies it funds, both privately and through the company. The expertise these executives bring has proven invaluable in analyzing business opportunities.
The first moves were into film funding and personalized health technologies
Since its metamorphosis into an incubator fund in June, the company has made two major moves.
The first was to acquire a 40% interest in Unified Film Fund II, an entity that will be producing three major films in 2017 and 2018.
Two of the three could garner worldwide distribution right receipts of around US$14.4 million given estimates projected by talent agency William Morris Endeavor Entertainment and other sources.
Victory Square acquired its stake in the fund by issuing five million shares at an assumed price of $0.85, so essentially the stake cost C$4.25 million.
Shortly after strengthening its presence in the film and entertainment arena, it created a new venture, Victory Square Health, to oversee companies in its portfolio working on personalized health technologies.
Victory Square Health’s initial mission will be focused on management and prevention of the modern scourge that is diabetes.
Victory Square Health will make some introductions and provide technical development capabilities to its chosen projects.
Tejani believes personalized health is the future of medicine and that the team and partnerships Victory Square Health has established will allow it to be at the forefront of the rapidly growing health tech industry. Through strategic resources and technical development capabilities, Victory Square Health will use its relationships with seasoned industry experts, including Dr Bruce McManus and Dr Pieter Cullis, institutions such as the University of British Columbia and Simon Fraser University, and organizations such as BC Diabetes with leading endocrinologist Dr Tom Elliott.
Forget Silicon Valley … British Columbia is awash with technology companies
Some might expect Tejani to be carrying out this sort of activity in California’s Silicon Valley, but in fact British Columbia is awash with technology companies.
“British Columbia is a great place to build a tech company,” Tejani asserts.
“There is exceptional talent in B.C. and Canada as well as strong government support through funding and tax credits. B.C. has become a great place to build a tech company and Victory Square is looking to fill the gap by helping to fund promising early-stage companies.”
So, there are plenty of great candidates to go under Victory Square’s microscope, and better still, they won’t be expecting California-style levels of financial backing.
“We take great pride in being based out of Canada, and British Columbia specifically. Both the federal and provincial governments have made it a goal to continue to foster innovation, which can be clearly seen by the provision of integral grants and credits,” says Tejani.
“Victory Square has fostered relationships with these bodies to utilize financial opportunities and continue innovation…we have a ton of support from the provincial government and other groups like the BCTIA and the Vancouver Economic Commission.”
Victory Square’s current market capitalisation is around C$37 million and the group is focused on building businesses with positive cash flow and exponential growth potential.
It’s always difficult placing a value on incubator funds until a sale or spin-off comes along
Which brings us to the subject of valuing Victory Square.
It is the nature of incubators that they fly below the radar for long periods, investing money for little return until they cash in, perhaps through a trade sale or stock market flotation.
It’s at that point that the value is crystallized; otherwise, analysts must make their best guess at the worth of the portfolio, based on values of similar companies.
Having said that, the company is not plowing its cash into money pits.
“We build businesses that generate positive cash flow and continue to grow,” Tejani declares.
If 2017 is earmarked as the year the company scales up, then next year should be the one where it strides toward profitability, powered by revenue from its film investments and personalized health initiatives. Tejani is motivated to find liquidity events along the way that will allow companies in the portfolio to find new funding sources and grow their investor bases.
Few can deny that tech, leisure and healthcare are markets with massive growth potential.
“Tech is exponential and our first goal is to build or acquire businesses we can continue to scale. These profitable companies provide us with the option to take them to the public markets, or exit to a larger player. For example, a healthcare company we have funded will have the potential to be acquired by bigger players in the pharmaceutical space.”
In the meantime, it is just a matter of sitting tight and trusting the skills and judgement of a team that collectively has more than 100 years of award-winning entrepreneurial experience.
SaaS tools, malware, platform integration – businesses in today’s world need to stay on top of a dizzying array of technologies, all of which develop new functionality at such a pace it makes you wonder how small enterprises can possibly keep up. Subscribe Technologies (CNSX:SAAS) is fully aware of that challenge and has an answer in the form of a cost-effective services suite that covers pretty much every digital need a small- to medium-sized firm could have.
Subscribe Technologies is headed by public markets veteran Paul Dickson, a perfect fit given his background in software development spanning some 30 years. Dickson believes that Software-as-a-Service is just getting underway and that all software programs will soon run independently of our personal computer hardware, residing and functioning in the increasingly pervasive “cloud”.
“It ties in perfectly with all of the AI (Artificial Intelligence) advancements taking place, where SAAS applications are being developed with AI in the back end that ups the ability to analyze client data,” Dickson explains. “Nobody is going to run software on their computers locally in the near future. It is all going to be in the cloud.”
Established as a company less than a year ago (December 2016), Subscribe Technologies already has a set of product offerings ranging from accounting and sales software to a security platform for analyzing websites and an alternative to the famous Dropbox filing sharing service that Dickson says comes with fewer restrictions for users.
And that concept is the key to understanding how Subscribe Technologies intends to prosper over time. The idea is not to take on Microsoft (NASDAQ:MSFT) or Amazon (NASDAQ:AMZN) on their home turf, but to offer alternative software to businesses and businesspeople who find that incumbent products don’t fit the bill for them, often because they are too restrictive. Maintaining high functionality at a reasonable cost is the other pillar of the strategy.
As reflected in the company’s name, the cost side of the equation from a customer perspective involves subscribing to use the software and paying a monthly fee. Dickson says that because the targeted customer base is small- to medium-sized entities the monthly cost starts around $10.00, thus hardly requiring a potential user to engage in a make-or-break decision from a financial commitment standpoint.
Working with the company’s chief engineer in Victoria, British Columbia, and supported by a team of software developers in India, Dickson has developed, or acquired and refined, a number of products that were made available for subscription in the past few months.
The first to hit the market was bContact.com, a CRM (Customer Relationship Management) platform featuring both accounting and sales functionality.
“bContact.com is a fully integrated SaaS platform that performs invoicing, collections, reporting, billing and other functions so customers can essentially run their entire small business from any web browser,” Dickson says. “bContact.com is really the ultimate tool for managing your entire business back-end.”
The aforementioned Dropbox alternative comes in the form of a product named FileQ.com.
“With FileQ we wanted to offer a service that had fewer restrictions, as some of the most popular file sharing systems force users to sign up in order to access certain features,” says Dickson. “FileQ allows the user to share files freely with anyone and even plays video files with its integrated media player. Instead of paying a flat fee each month, the uploader of the files pays according to how much storage they require.”
The service most recently debuted is SiteSafe.io, which helps system administrators reduce the chance of having their website infected with malicious code. “SiteSafe is something we came up with to address issues that individual websites are having, as the hacking going on is relentless these days,” states Dickson. “It is definitely good practice to scan your own website for malware, or if you host other websites then you should scan the client websites.”
Sitesafe looks for viruses, worms, trojans and other malware, liaising with a third-party database that is constantly updated to both detect and eliminate programs designed to steal information, interfere with website performance, or worse. In the spirit of keeping things affordable, SiteSafe can be accessed to monitor a site for a monthly price of between $5.95 and $19.95.
Subscribe has other product offerings available as well, and Dickson says that there are more on the way. From a valuation standpoint, the company aims over time to build a reasonable base of recurring revenue and, eventually, profit. But given the value ascribed to some software programs these days, there is also the possibility that a Subscribe product gets hot and hits it out of the park.
As the products available to date have only just been introduced, marketing efforts have thus far been modest, and Subscribe is currently formulating a full-fledged marketing program that will utilize both keyword advertising and affiliate marketing, the latter enabling customers to earn money by referring others to use Subscribe services.
“Pretty much every SaaS company now has a referral program that pays people credits or cash for helping to obtain registered users,” Dickson explains. “The cost of acquisition can be high with online ads, where you are paying and hoping that people click. These days you do some of that, but also recruit others to market your product.”
One can’t deny that Subscribe has positioned itself to go after a huge market. Forecasts for the future size of the SaaS space begin in the tens of billions of dollars and run into the hundreds of billions. To settle on a particular number would be to miss the point – business spending on SaaS is big and getting bigger, and Subscribe need only capture a small piece to make a big difference to its bottom line.
“All we are trying to do is pick up a portion of the people who don’t want to use Dropbox, Salesforce, and the like,” says Dickson. “There is a great deal of business out there, and because there are others in the space capitalizing on this opportunity as well, that’s why we are establishing Subscribe as a multi-faceted SaaS company. In the months ahead, you’ll be seeing us meet a lot of our user targets and bringing new products to market.”
There are more than a few companies worldwide selling equipment to monitor the transmission lines that deliver power to our offices and homes, but none has products like Torino Power Solutions (CNSX:TPS). It should come as little surprise, then, that Torino CEO Rav Mlait speaks excitedly about the company’s outlook, fully understanding, as he does, the clever technology that makes its products so unique.
Before getting to that technology, however, a revealing story about the electricity we use every day is in order.
Power transmission is not nearly as efficient as the general public might think. From the time electricity leaves a power plant to the time it reaches its end user, it is common for somewhere between 6% and 15% of the power to be lost, and many estimates reach even higher. The losses occur for a variety of reasons.
One of these is that the company managing the transmission system needs to make sure its power lines don’t run too hot. Not only can excessive heat damage equipment along the transmission pathway, but when lines get too hot they can damage power lines that are very expensive to install and maintain.
So, how do many electrical utilities gauge the temperature of their lines to optimize the amount of power flowing through at any given time? Would you believe by referring to historical weather pattern charts and ambient temperature readings?
Despite the imprecision inherent in such an approach, Mlait confirms that the practice is common. Now, what if the utility were able to know what the temperature actually was along different sections of a long transmission system such that it did not have to underutilize its infrastructure?
That’s the issue that Torino addresses. And with over $10 million spent on R&D, plus patents in place, the time to push for widespread adoption of the company’s solution is at hand.
Torino’s “Powerline Monitoring System” is a combination of a hollow aluminum sensor placed on a power line, combined with a nearby “interrogator” that reads microwaves bouncing back from the sensor. The sensor expands and contracts according to the heat of the line, and an algorithm in the interrogator converts the signal to a temperature reading that is then relayed to the utility in real time.
“As populations grow and distributed connection resources such as wind and solar gain prominence, it is putting the existing electrical infrastructure under more strain and causing wear and tear,” Mlait explains. “Part of the solution is better data, and it all ties into the industrial Internet of Things concept whereby real-time information enables system administrators to make better decisions.”
Torino is not the only company to conclude that there must be a better solution for monitoring line temperatures, but it is the only one with a passive sensor. Mlait says that all competing line sensors require power sources, in the form either of batteries or the power lines themselves. “So, if a power line goes down, their sensors can go down with it. Ours won’t, and that is part of our competitive advantage.”
Another advantage comes in the form of economics. Torino will deploy a system, which is comprised of three sensors and one interrogator, for between US$40,000 and US$50,000, or approximately half the cost of its rivals’ installations.
“Having more data from more lines, and thus a richer data set, is a better way for utilities to manage their assets and conduct dynamic line ratings,” explains Mlait. “That is one of the reasons we priced our technology where we did, so that utilities can deploy more sensors for the same cost.”
Mlait claims that utilities can quite easily recover up-front costs within 12 months, enabling the return on investment to stack up quickly.
Consistent with the early stage of the product roll-out, Torino’s solution is being used by a single utility at present. Tri-State Generation and Distribution Association installed the system on a trial basis last year in eastern Colorado. In what can only be taken as a good sign, it added to the trial in June of 2017 by moving a second system to a more critical location in western Colorado.
“Utilities are conservative when it comes to adopting new technologies, and understandably so,” says Mlait. “They want to really examine new equipment before deploying it extensively throughout their expensive infrastructure.”
Mlait says that he and his team are in discussions with a number of utilities both in North America and overseas, and while nothing has been finalized, observers shouldn’t be too surprised if additional installations make news before long.
Another component of the marketing strategy is to potentially ally with distribution partners with reach into markets that Torino has yet to develop. “We are a relatively small company, so the idea of partnering with a large distributor is pretty significant,” Mlait says.
Word is definitely getting out because Torino has started developing new products based on feedback from potential users. The company recently initiated development of a system for distribution lines, which are the smaller power lines operating inside urban areas. Urban power lines often heat up and sag, causing a host of challenges such as power outages and clearance issues, so a robust solution in this environment would be most welcome.
The other development program announced recently involves underground sensors. Mlait says that potential clients have asked if products are possible for applications such as subways and other underground infrastructure.
“People in cities such as New York, London and Toronto know that there are significant down times associated with underground systems, largely owing to deterioration of aging lines,” says Mlait. “We have heard about the need to better monitor these cables as they continue to deteriorate and are looking to provide a solution down the road.”
With a cost/benefit ratio that makes sense and a need within a crucial industry that cannot be denied, the potential clearly exists for Torino’s sensors to gain broad acceptance. Installation of a mere 100 systems could bring in over C$5 million on the top line, and there is the possibility for ongoing revenue streams from installations as well.
“It is not too often that you see new technology in this industry. We have something that is unique and some highly respected companies have suggested to us that we might have a game-changer on our hands,” according to Mlait. “From an investment standpoint, we have an advanced product starting to make headway, but a pretty small market cap. Throw in our ability to develop new products as well and we feel very positive about our future.”
Deveron UAS helps agricultural efficiency reach new heights with a data-gathering drone fleet.
New trends in technology are penetrating every conceivable part of our daily lives, and the food on our table is no exception. What many shoppers might not know, however, is that technology is now making a difference right at the very source of our food – the farmer’s field.
The agricultural sector is experiencing a rapid digital revolution, with some farms these days run more like high-tech outdoor factories.
Right place, right time…
Deveron UAS Corp (CSE:DVR), an enterprise drone data provider targeting agriculture, would thus seem to be at the right place at the right time.
This use of drones, or for the uninitiated, unmanned aerial vehicles, is a nascent industry, yet one where the potential rewards are enormous, explains Deveron’s co-founder and Chief Executive Officer David MacMillan. Put simply, the company’s pilots ‘fly’ farmers’ fields, mainly over mass crops like corn and soybeans, and provide follow-up analysis to help increase yields and reduce costs.
Services include thermal imaging, data analysis and drainage identification – in other words, Deveron’s technology is able to tell a farmer what is going on in his field, something that is oftentimes difficult to determine by working strictly at ground level.
Macmillan says that in discussing Deveron with potential users, the emphasis must be on explaining the advantages of this new type of analysis, rather than trying to tell people that they’ve been farming the wrong way their whole lives.
“Essentially, we’re trying to enable decision makers in agriculture to make more efficient choices,” he says.
For farmers eager to embrace the concept, Deveron is one of just a handful of entities with a permit to fly drones across Canada. There are 15 pilots available as and when needed in eight of the country’s 10 provinces (having started in Ontario with just two).
MacMillan explains that it makes more sense for farmers to hire Deveron than to buy their own drones at great expense, particularly if field analysis is needed only a couple of times each year (as is often the case). The fact that farmers need to make key decisions on a variety of crop planning issues every year is a strong selling point, both for farmers who might use the service, as well as to investors considering whether to back Deveron with an equity purchase.
A strong recurring revenue model…
“Our hope is to continue to show the investing public that there is a strong recurring revenue model here,” MacMillan says. “Corn grows every year and the farmers need the data every year to make informed decisions.”
Currently, the group is targeting large agricultural operations as customers – those which might manage a million acres or more – as well as smaller outfits. At this point, it is all about encouraging a network to develop.
While it is still early days, Deveron is already seeing engagement expand as bigger players increasingly sell its services ‘downstream’ to their customers. At present, there are around 30 such partnerships with big farm managers.
Recent collaborations include the retail division of GROWMARK Inc., vegetable producer Bonduelle North America and major farming services and grain retailer Thompsons Ltd. Everyone gains in the network, explains MacMillan, as the large entities get Deveron’s services at a discount, and then in turn make some money when they sell it down the line.
“There are 400mln acres of farmland in North America so it’s a huge addressable market,” adds MacMillan. Some 88mln of those are in Deveron’s home Canadian market.
What could that translate into in dollars and cents? At Deveron’s standard $3 an acre charge, 2-3 flights a year over 400mln acres, and an assumed adoption rate of 20-30%, that’s a potential annual market of $700mln, reckons MacMillan, and likely to increase in the future.
First mover advantage…
For now, though, revenue and earnings are less important to the group than consolidating its first mover advantage by investing and scaling up the business.
MacMillan’s background is in public venture capital and he came to research drones three or four years ago after looking to invest in new technology which could be supported by Canadian companies. Rather than obsessing over the ‘flying robot’ concept, he was interested in how data collected by the vehicles could be used intelligently, and agriculture was a good place to start.
“Historically, network plays end up having very high IRRs (internal rates of return) for the first people in the space,” he explains. Behind all that, the idea that by 2050, with a global population of 10bln people, the earth’s food security may be an issue if agricultural yields don’t increase only added to the drive to establish the company, he says.
Business partner and co-founder Norm Lamothe is himself a farmer and manages 500 acres of land, so is ideally placed to know what famers need and want.
If valuation is any guide, it would seem this combination has the company heading in the right direction. From around $2mln in 2016, Deveron is now worth nearer to $8mln, and recently raised $2mln, says MacMillan. The idea now is to continue to grow organically, scale up the business and gain credibility via more collaborations and partnerships.
Canada is the focus for the time being, but to increase the amount of drone flights possible (they can’t fly fields in the snow) developing more of a presence south of the border is appealing, says MacMillan.
There is also the possibility of news flow over the next year around further partnerships, new revenue streams, and intellectual property value related to the company’s analytics technologies.
The seeds now planted, careful nurturing of Deveron’s business has the potential to yield robust returns for shareholders in the years ahead.
Often in the investment world, a long-term business trend is easy to identify, but finding the right stock to buy to take advantage of that trend is anything but. Fortunately, the choice is simple for microcap investors looking to hitch a ride on the rapidly expanding need for cellular network capacity by owning shares in a cellular tower company, as there is only one such stock in North America: Tower One Wireless (CNSX:TO).
Fortunately, too, the basics of the business are easy to understand. In many regions, mobile network operators don’t own the towers to which their antennas are fixed, but rather lease space on them. This approach essentially enables a carrier to share tower costs with other carriers serving the same area.
For a tower company, then, owing the structure that wireless carriers need today, next year and into the foreseeable future can be a stable, and lucrative, proposition.
“What makes this business interesting is that a tower costs between $50,000 and $70,000 to erect, but the monthly lease payments come in at $1,000 to $1,500, and that is just for one mobile network operator,” explains Alejandro Ochoa, Tower One Wireless Chief Executive Officer. “We sign 10-year lease contracts, with a 10-year option, but companies in the tower sector are valued highly because in essence use of the towers is perpetual. And if we add a second or third carrier to use the tower, there is no marginal cost to us.”
Reflecting the Colombian-born Ochoa’s 18 years of investment banking experience in Latin America, Tower One Wireless is focusing its early building efforts in Argentina and Colombia, with Argentina expected to account for about 80% of activity.
“Argentina went through some challenging times, but now the country has elected a new president and is back in business,” Ochoa says. “There will be demand for 10,000 new towers in Argentina.”
Ochoa tells an impressive story of competing with a large pool of rivals for the Argentine business before winning a spot on a shortlist of 15 companies, and finally being among the four companies awarded the right to build towers. “We all got awarded the same number of towers, which is 100 to begin with,” he says.
So far, the company has 20 towers up, and anticipates having the first 100 hundred built sometime around the end of 2017. The early exercise of warrants combined with a $5mln credit line will see the company through that planned construction.
Key to understanding the risk side of the equation is that Tower One Wireless never builds a tower hoping that a carrier will need it. “We don’t build towers on a spec basis, but rather on a build-to-suit basis,” Ochoa emphasizes. “Every tower I build has a guaranteed tenant. My relationship with other carriers is my chance to add a second or third carrier to that tower.”
Once a site is agreed and permitted, construction takes 60-120 days, and some 30 days later payments begin to come in from the first carrier on the tower. It is thus an easy business to model, and Ochoa’s model suggests very good returns indeed.
“With 100 towers we should have an EBITDA margin around 72%,” Ochoa says, adding that the company won’t see everyday expenses increase as it expands its tower pool further. “The majority of the work is outsourced, so I can move from 100 towers to 500 towers and manage it with the same 15-person team I have today.”
Ochoa describes his team of accountants and other professionals as hailing from major wireless companies and tower builders, including a legal unit entirely from telecommunications giant Telefonica.
Ochoa has some interesting comments when asked why he chose to list the company on the public markets. “When you sit across from the wireless carriers and they ask what makes you better than your 15 competitors with many times the capital you have, it is that I am not structured to sell my towers back to American Tower (NYSE:AMT). Every other company out there is modeled to build their towers and sell them as their natural exit. By being public, my investors have the embedded option of getting in and out of the company as they please.”
He also talks about the dynamics of capital in South America, where among his banking achievements is leading the team that listed Facebook (NASDAQ:FB) on Colombia’s stock exchange. Institutional investors in Colombia and other Latin American countries must observe foreign investment limits dictating that a substantial portion of any equity allocation ends up in domestic stocks. In some cases, this means a fund has fewer than 100 issuers to choose from.
Ochoa would one day like to provide them an additional choice.
“Canada has been very proactive in Latin America and is a market where investors understand the region through mining and oil and gas involvement,” Ochoa states. “The potential to access capital by listing in another market is also a reason we decided to go public.”
The company Ochoa mentions absorbing other networks, American Tower, is listed on the New York Stock Exchange and sports a market capitalization of some US$60bln. In 2017, it has outperformed the S&P 500 average at a triple-digit pace.
Putting Tower One Wireless and its C$13mln market cap next to American Tower makes for a lopsided comparison to be sure, but it illustrates the potential for value expansion as the former’s tower network builds out. It also shows that demand for towers is nothing if not healthy.
“I think looking at our company today makes sense because with the 100 towers we should finish over the next six months we’ll have positive operating cash flow,” Ochoa concludes. “On a discounted cash flow basis, every dollar you invest in a tower is worth three dollars the day you finish building. Our company is well-managed and the business is simple. And we are the only publicly listed entry point into the tower market at the microcap level.”
We are living in an age of big data and analytics. It has never been easier to collect and analyze information to optimize your organization’s business processes. Recruiting is no exception. Doing this will not only offer you fresh insights into how successful your existing recruitment efforts are but also provide clarity on how to make them more efficient to achieve better results.
Establishing and using analytics is a great way to figure out how to make your recruitment efforts as effective as possible. You can uncover that you’re spending hundreds or even thousands on resources that are not leading to the desired candidate pools where you wind up hiring from. Smart organizations leverage HR technology to gather the proper data points required for c-suite decisions for funds allocation and business process effectiveness.
There are lots of ways to capture data about your recruiting process. One of the easiest is to use an applicant tracking system that will automatically collect that data for you and display it back in an easy-to-understand dashboard. But, no matter how you collect your recruiting data, make sure that you focus in on a few key metrics:
Time to hire – is the amount of time to it takes from when a job is posted until a candidate accepts your job offer. While time to hire can vary dramatically depending on the industry you are in and the role you’re recruiting for, the longer the procedure takes, the more expensive it becomes.
Cost to hire – is how much it costs to fill a position, to calculate this you factor in advertising the position on paid job boards, paying for various other tools, and time spent on recruiting, vetting, and onboarding candidates.
Source quality – is the cost-effectiveness of the different sources you’re using to attract candidates. An easy way to calculate this is to divide the cost of each source (job boards, ads, etc.) by the number of successful hires for the desired time frame in question (quarterly, annually).
Together, these metrics will give you a fantastic initial understanding of how efficient and cost-effective your recruiting is. Once you’ve established some benchmarks for yourself or your recruiting partner like TPD, (i.e., how long it typically takes you to fulfill a job, how much doing so typically costs on average, and how cost-effective your distinct sources are), you can then get to work to optimize your recruiting efforts to get better results. When you have clarity through attribution analytics on your top candidate sources by job type, you can effectively build a case to increase ad budget for that job board platform and reduce spending on underperforming job boards.
There are many ways to leverage applicant tracking systems during the recruiting and onboarding. When done right this pivotal step in candidate experience becomes the stepping stone for your employer brand and the start of your new hire’s journey with you. TPD provides end to end solutions for organizations looking to improve their recruiting process internally or take over the entire function with total transparency into all of the analytics mentioned.
Anytime that you have data-driven analytics and metrics, you can use them to gain insights into everything you’re doing. If your time to employ is long and your cost per hire is low, then you should make some tweaks to your procedure, such as spending a bit more on advertising. A small investment can easily pay for itself if you are getting to better candidates faster, but you need to know your numbers to justify the action.
It may not be easy, but using analytics is a great way to figure out how to make your recruiting efforts as efficient as possible. For that reason alone, it’s worth taking a closer look at them.
TPD® is an international Workforce and HR Solutions company that partners with our clients and talent pool to help people succeed and help organizations perform. Founded in 1980, TPD works with people, for people, and about people; providing scalable HR solutions that are backed by the best-proven practices in the industry.
According to the movies, cybercriminals operate out of abandoned warehouses, target carefully selected conglomerates and use things like “worms” and “keys” to gain access. The reality, however, is that cybercriminals, using scattergun techniques like phishing, are not out for world domination but rather a more familiar motive: money.
In 2016, 24% of breaches targeted financial organizations, 15% healthcare, 12% public sector entities and 15% targeted retail and accommodations*. Whether it’s design plans, medical records or good, old-fashioned payment card details—someone, somewhere will see it as their meal ticket.
Organizations need to build a strong security posture by implementing strategies that address internal and external threats across the entire chain. It is critical to start from the premise that systems will be breached. This perspective enhances the effectiveness of decision making related to preventing, mitigating and recovering from a breach.
Another recent development makes this a pressing imperative. Canada’s new Digital Privacy Act has introduced mandatory breach notification. In 2017 organizations will be required to notify the Office of the Privacy Commissioner, as well as the individuals affected, if the organization experiences the loss or theft of personal identifiable information that puts these people at “real risk of significant harm.” Failing to do so could result in fines of up to $100,000 per offence. This comes as part The Digital Privacy Act (formerly referred to as Bill S-4) that was put into effect in June 2015.
On January 19, 2017, the Canadian Securities Administrators (CSA) published Multilateral Staff Notice 11-332, stating that they expect issuers to provide risk disclosure that is as detailed and entity specific as possible, should they determine that a cyber security risk is a material risk. In order to determine materiality, the cyber security incident requires analyzing and the probability of a breach occurring and the anticipated magnitude of its effect needs to be determined. The CSA expects issuers to disclose specific risks, rather than generic risks common to all issuers, and they expect issuers to tailor their disclosure of cyber security risks to the particular circumstance. Underestimating risks leaves enterprises highly vulnerable. Poor security can lead to painful, even catastrophic, financial and reputational losses. Moreover, data breaches and other security incidents put not just individual companies, but entire supply chains, at risk. The following are three steps to build a robust security posture that will support the goals and resilience of your organization, and assist you in determining your cyber security risk.
Conduct a health check of your organization’s cyber security maturity.
A health check is an assessment of an organization’s controls, security risks and threats, to define its current security posture and highlight gaps.
The health check assesses current risks to your industry and business and evaluates the strengths and weaknesses of your organization’s existing security controls.
The health check determines the impact a breach could have on your organization: operations, productivity, information assets, infrastructure, reputation, materiality of the cyber security risks and brand.
Develop a clear security roadmap.
The health check will guide an organization by providing a clear map of priority risks and practical direction regarding where to most effectively focus cyber security budget and resources.
Test your organization’s vulnerability to cyber-attack.
It’s essential to supplement planning with robust testing to determine your organization’s vulnerability to cyber breaches. Intellectual property, personal information, plant systems, computer servers, and mobile devices, could all be targets for attacks.
Seek objective, trusted third party cyber security expertise to assess potential weaknesses through vulnerability assessments and penetration testing of your internal and external networks and applications.
Without adequate protection, cyber security threats can put your organizations’ operations, reputation – even its existence – at risk. Vigilant assessment, planning and testing are critical to protect the bottom line.
For more information on how you can better protect your business from cyber-attacks, contact: Danny Timmins, CISSP, National Cyber Security Leader T: 905.607.9777 E: firstname.lastname@example.org
MNP is a leading national accounting, tax and business consulting firm in Canada. We proudly serve and respond to the needs of our clients in the public, private and not-for-profit sectors. Through partner-led engagements, we provide a collaborative, cost-effective approach to doing business and personalized strategies to help organizations succeed across the country and around the world.
2017 Verizon Data Breach Investigations Report
Canadian Securities Administrators Multilateral Staff Notice 51-347 – Disclosure of cyber security risks and incidents
Canadian Parliament: Digital Privacy Act (Bill S-4)
Government of Canada: For Discussion — Data Breach Notification and Reporting Regulations
The pace of change in technology is extraordinarily fast and, it seems, only getting faster. Ideas and technology that seemed to belong to the realm of science fiction are now very much on the cusp of becoming commercial realities. It is against this exciting backdrop that the latest edition of the CSE Quarterly is launching.
The growing constituency of tech issuers on the CSE, including those profiled in this edition of the CSE Quarterly, provide great examples of innovators leveraging technology to solve real-world problems and have global impact.
Featured in this special technology and innovation edition of the CSE Quarterly are: