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EnviroLeach Technologies set to overhaul mining sector with eco-friendly gold leaching formula

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.

This story was originally published at www.proactiveinvestors.com on August 23, 2017 and featured in The CSE Quarterly.

Learn more about EVI Global Group Developments Corp. at https://enviroleach.com/ and on the CSE website at http://thecse.com/en/listings/mining/evi-global-group-developments-corp.

Victory Square Technologies is giving tech entrepreneurs a sporting chance

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.

This story was originally published at www.proactiveinvestors.com on August 23, 2017 and featured in The CSE Quarterly.

Learn more about Victory Square Technologies at http://www.victorysquare.com/ and on the CSE website at http://thecse.com/en/listings/technology/victory-square-technologies-inc.

Subscribe Technologies helps small businesses with some big computing challenges

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.”

This story was originally published at www.proactiveinvestors.com on August 28, 2017 and featured in The CSE Quarterly.

Learn more about Deveron UAS at http://www.subscribetech.com/ and on the CSE website at http://thecse.com/en/listings/technology/subscribe-technologies-inc.

Torino Power Solutions nears turning point with unique approach for better power grid efficiency

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.”

This story was originally published at www.proactiveinvestors.com on August 29, 2017 and featured in The CSE Quarterly.

Learn more about Torino Power Solutions Inc. at http://www.torinopower.com/ and on the CSE website at http://thecse.com/en/listings/technology/torino-power-solutions-inc.

Deveron UAS’s drones helping agricultural efficiency to reach new heights

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.

This story was originally published at www.proactiveinvestors.com on August 15, 2017 and featured in The CSE Quarterly.

Learn more about Deveron UAS at http://www.deveronuas.com/ and on the CSE website at http://thecse.com/en/listings/cleantech/deveron-uas-corp.

Alternate Health to gain from the growing market of medical marijuana

The waves of legalized recreational marijuana in Colorado, Washington, Canada and now California have sparked a ‘Green Rush’ in the cannabis industry, but Alternate Health (CSE:AHG) CEO Dr Jamison Feramisco reminds investors not to forget about the market potential of the medical side of the business.

“The key to leadership in medicinal cannabis is constant innovation in the scientific research that puts the patient’s needs first,” says Feramisco. “Alternate Health takes a value-added approach, investing in the clinical studies and patented technology that turns cannabinoids, like CBD, into real medicine.”

The diversified healthcare company – which has patent rights for CBD delivery systems for sublingual tablets and transdermal patches and offers education programmes, electronic medical records (EMR) software and toxicology laboratory analysis – started trading on the Canadian Securities Exchange in January. Two months later it joined the US markets on the OTC bulletin board.

Feramisco brings experience in delivering profitability, strategic mergers and acquisitions and innovation in healthcare as the co-founder and president of Texas-based Apri Health – a healthcare data analytics company, formerly known as Transfuse Solutions. Feramisco is a graduate of the University of Texas at Southwestern Medical School with a Ph.D. in Molecular Genetics and Biochemistry.

Alternate Health stands to gain from the growing market of medical marijuana.

There are about 40,000 patients with prescriptions for medical marijuana in Canada, according to Health Canada. Over the next 10 years, the number of these patients is expected to grow to more than 450,000.

The group’s Alternate Health Media division offers education programmes for training healthcare professionals and physicians in the use of cannabis to treat medical conditions.

The Cannabidiol Certification Programs have been approved by the American Medical Association (AMA) and address all facets for the use of marijuana’s two active chemicals that have medical applications – cannabinol (CBD) and tetrahydrocannabinol (THC).

CBD and THC are considered useful substances to manage pain, and are also prescribed by some physicians for conditions including glaucoma, epilepsy and anxiety.

In January, the company announced the first continuing medical education course for practitioners on the endocannabinoid system, the body’s reaction to CBDs.

The video-based course, accredited through the University of Louisville and approved by the AMA, provides an overview of the endocannabinoid system and the role it plays in the different functions of the human body.

“Doctors and medical professionals have been waiting for a proper medical education program to provide details for this emerging medicine,” says Feramisco. “This program is the culmination of many years of investigation and research, coupled with a substantial investment in production to create a quality and highly necessary education program for doctors and healthcare practitioners.”

Cannabis tablets as an alternative to traditional smoking

Alternate Health has acquired the commercial rights to patents for developing and manufacturing sublingual tablets that include CBDs and/or THC.

The sublingual tablets can be rapidly absorbed into the body in less than three minutes. The company said it recognised the need for a more efficient way to use medical cannabis than the traditional smoking and ingestion methods.

Sentar Pharmaceuticals in March granted Alternate Health an exclusive 10-year agreement for global nutraceutical license rights to its patented sublingual delivery systems to administer CBD and THC in tablet form.

The company paid Sentar 850,000 common shares for the renewable license agreement.

The California marijuana Industry is estimated to grow to $25bn per year and is set to eclipse $50bn by 2026, Alternate Health said, citing USA Today.

“Alternate Health is uniquely positioned for licensing their manufacturing pharmaceutical grade delivery systems of CBD and THC healing products in this fast-growing new marketplace,” says Feramisco.

“Alternate Health facilitates the development of organic, safe and healthy medicines through our patented delivery systems to patients around the world, and the California market represents a significant starting point for us.”

Leader in electronic medical records software

Alternate Health describes itself as a leader in software applications and processing systems to the medical industry.

Its Alternate Health Technology business includes VIP Patient, electronic medical record (EMR) software that allows doctors to register patients and document their diagnosis and generate insurance recoveries with up-to-date billing codes.

The CanaCard Patient Management System tracks patient data and prescriptions while ensuring regulatory guidelines and financial transparency. It is a complete EMR, managing controlled substances like medical marijuana with an interface between patient, doctor and licensed provider.

“Alternate Health’s proprietary EMR systems give doctors, patients and producers the tools to manage prescriptions and dosages in a safe and transparent way,” says Feramisco. “This software is a key asset in the management of Alternate’s CBD delivery systems, while providing us with valuable feedback and clinical data.”

Alternate expands its labs division

The group also has an independent clinical lab in San Antonio, Texas, under the banner of its Alternate Health Labs business, which specialises in toxicology and blood testing services.

The lab receives and assesses the blood and urine of patients from across the United States and then supplies the results to physicians so they can diagnose and treat diseases and medical conditions.

In March, the company agreed a deal to expand the business through the acquisition of a 20% stake in Clover Trail Capital, a Texas-based investment company.

Clover Trail, which owns a 40% holding in Sun Clinical Laboratories, has investments in labs that conduct toxicology and blood studies for hospitals, private insurance groups and clinics.

Feramisco said: “It is an excellent opportunity for us to grow and increase the effectiveness of Alternate Health Labs, already a leading source of revenue for us and a key part of our strategy to fundamentally advance patient care.”

This story was originally published at www.proactiveinvestors.com on May 11, 2017 and featured in The CSE Quarterly.

Learn more about Alternate Health at http://alternatehealth.ca/ and on the CSE website at http://thecse.com/en/listings/life-sciences/alternate-health-corp.

iAnthus Capital bordering on big things

The movement to legalise cannabis in a majority of US states is drawing interest from an expanding list of companies, as entrepreneurs sense opportunity in a market where growth is virtually guaranteed.

Currently, 29 US states have legalised the use of full-strength medical cannabis, with eight of those states allowing recreational use of the drug as well.

In all, 43 states allow some degree of cannabis use, meaning 93% of Americans live in a state that allows consumption.

According to the latest industry data, direct legal cannabis sales totalled US$7bln in the US in 2016 and by 2020 will reach around US$22bln.

However, although this looks like a good opportunity for businesses, the fact that cannabis is still illegal on a federal basis in the US makes it difficult for entrepreneurs to finance their operations.

This is where Canadian Securities Exchange-listed iAnthus Capital Holdings Inc (CNE:IAN, OTCQB:ITHUF) has stepped in.

“You have a strange anomaly in the US where cannabis is legal at the state level and illegal at the federal level,” says Hadley Ford, chief executive of iAnthus Capital.

“Citibank and Bank of America aren’t making any loans to cannabis operators, and the Goldman Sachs and Morgan Stanleys of the world aren’t taking anyone public.”

iAnthus, however, raises capital in Canada, where cannabis is legal for medical use at both the federal and provincial levels, and puts the cash to work in the US market.

That market is growing at a compound annual rate of over 30% so the returns on investment have the potential to be significant.

iAnthus, which has raised over C$50mln since its founding, has been putting money to work in Colorado, Vermont, New Mexico and Massachusetts, and is also in discussions pertaining to other high-growth markets.

TGS deal

In early February, iAnthus announced a strategic partnership with The Green Solution (TGS), a big player in the US cannabis industry.

TGS operates 12 dispensaries and integrated cultivation and processing facilities in the state of Colorado and has generated over US$150mln of cumulative revenue since its inception in 2010.

“The chance for us to work with TGS on strategic opportunities is very exciting,” said Ford. “TGS is a leader in cannabis and we look forward to seeing what we are able to do by working closely together.”

As part of the strategic relationship, TGS will provide iAnthus with retail expertise and advice on investments in Massachusetts, Vermont, New Mexico and Colorado.

iAnthus is providing a US$7.5mln credit facility to TGS which will be used to fund the build out of additional store locations. The facility runs for one year and carries an interest rate of 14% during the first four months, escalating to 23% thereafter.

To finance the credit facility, and also to provide cash for general corporate and working capital purposes, iAnthus closed a bought deal private placement at the end of February which raised gross proceeds of C$20mln. The deal was structured as a convertible debenture with an 8% coupon and convertible into common shares at a price of C$3.10 per share.

The stock, which also started trading on the OTCQB in early April, is currently changing hands for around US$2.00.

“If you are an investor, there are very few industries where you can pretty much have guaranteed top-line growth of 30% for the foreseeable future,” Ford points out. “There are not many ways for the public to play that opportunity. We believe iAnthus provides an easy way for investors to invest in multiple operators across high-growth states in the US.”

Ford says the group has put over US$19.1mln to work to date, and he thinks the opportunities for investors “look outstanding.”

Massachusetts interest

Aside from being excited about working with TGS in Colorado, Massachusetts is also high on Ford’s radar.

At the start of March, iAnthus said construction had begun on a state-of-the-art cannabis cultivation and processing facility for affiliate Mayflower Medicinals, Inc., a Massachusetts non-profit and cannabis dispensary licence holder.

The 36,000 square foot facility in Holliston is expected to have annual production capacity of 8,700 pounds, with the ability to supply over US$35mln of medical and retail sales. The company has spent US$2.1mln of the approximately US$10mln it will need to build out the cultivation, processing and store locations. “We have the necessary cash on our balance sheet today to complete the project,” notes Ford.

Ford calls Massachusetts the “Colorado of the East, but with less competition.” Mayflower has been awarded two of its three licences by the state, including one of the three dispensaries currently approved to open in Boston. A Boston ordinance provides that no other dispensaries can be opened within a half-mile of any dispensary currently approved by the City.

Ford believes that operations in Massachusetts should start generating revenue in the fourth quarter of this year.

Political risk limited

The election in November last year which made Donald Trump US President included referendums in a number of states on legalising cannabis in one form or another.

Even so, some people question the heightened political risks to the US cannabis industry caused by Trump’s presence in the White House.

Ford, however, plays down such fears, seeing no material change with Trump in power from the environment under President Barack Obama. “Obama could have decriminalized cannabis. He didn’t,” notes Ford.

Ford says the real issue is not one of politics, but of economics, with states like Colorado seeing a big tax boost and the cannabis industry serving as an important jobs provider.

“Nothing is going to stop the forward motion of the industry at this point,” Ford explains. “It doesn’t make sense politically, doesn’t make sense economically, and there just aren’t the federal resources available to roll back the progress that has been made in 29 states.”

iAnthus reported a small loss last year, but as it puts its capital to work it should ultimately see the business turn very cash generative. “When I look at some of the opportunities we have in the pipeline, the future looks very rosy from our perspective,” Ford concludes.

This story was originally published at www.proactiveinvestors.com on May 11, 2017 and featured in The CSE Quarterly.

Learn more about iAnthus Capital at http://www.ianthuscapital.com/ and on the CSE website at http://thecse.com/en/listings/life-sciences/ianthus-capital-holdings-inc.

Maricann looks to replicate Canada success in newly legal German cannabis market

Anyone looking for a model company in the medical cannabis sector would be well advised to consider Maricann Group Inc (CSE:MARI), as thus far it seems to have done everything right.

With a green ethos that drives both product development and corporate efficiency efforts, Maricann succeeded in becoming one of the first companies in Canada approved to cultivate and sell medical cannabis.

Not content with being an early mover in just its home market, Maricann was quick to stake its claim in another jurisdiction largely overlooked by its peers: Germany.

On the verge of turning a profit

The combination has the company predicting profitability by the second quarter of 2018. Its top line is off to a good start, with sales currently running at $450,000 per month. And having just announced a $42.5mln non-dilutive stream financing that will fully fund its German plans, Maricann is positioned to really put its foot on the accelerator.

The strategic mix of Canadian and European markets notwithstanding, Maricann chief executive officer Ben Ward sees the company’s key point of differentiation being technology for extraction and product formulation.

“We have locked up two groups with preparative chromatography expertise in cannabis and this means we have the only ability in the industry to get all the cannabinoids, terpenes and flavonoids,” says Ward. “To formulate the plant, you first have to be able to deconstruct it to make sure you get the active pharmaceutical ingredients.”

Ward explains that there are 500 terpenes – an organic compound found in numerous plant-based products – specific to the cannabis plant, and that companies looking only at cannabinoids or THC are missing much of what cannabis has to offer. “We are focusing on whole-plant medicine, which is done by extracting all of the different isolates.”

This approach to the industry reflects the direction set for the company early on by founder Dr Eric Silver. An assistant professor and clinical teacher in the Department of Family and Community Medicine at the University of Toronto, Dr Silver knew first-hand the benefits that alternative medicine employing cannabis could have on patients. The next step was to gather colleagues from the industry with capital and know-how and begin the search for a facility to purchase.

Eventually, the team settled on the Langton facility, which had been operating under the MMAR (Marihuana Medical Access Regulations) regime established in 2001.

The facility was approved under the more robust MMPR (Marihuana for Medical Purposes Regulations) in March 2014, with a license to sell product grown at the facility arriving in December of the same year.

A green ethos going hand-in-hand with the commercial imperative

A brief analysis of the facility indicates Maricann is committed both to being a custodian of its environment and running its business with an eye on costs. Langton has its own co-generation plant to help with electricity needs and there is even a natural gas well on the property to provide some of the fuel. Other efforts include equipment to capture rainwater for use in the fertigation process.

These and other efforts lead the company to believe that it is among the most competitive producers on the Canadian landscape, with per-gram costs estimated at just $1.37. That should translate into healthy margins that really make their presence known as sales continue to ramp up.

“Our revenue generating capacity right now is restricted only by our footprint of 34,000 square feet,” says Ward. “We are building a 216,000 square foot facility and that will be able to produce another 20,000 kg of dry flower starting in the first quarter of 2018.”

As far as near-term trends are concerned, Ward is in the camp of industry executives who believe smoking cannabis will give way to ingestion in other forms over time. “We think users will come to prefer extract-based products, which is the experience in more mature markets such as Colorado and California,” Ward notes. “Once people can access a product with a consistent extract in a dose they are used to, they will opt for that. We think that is when the real adoption will take place.”

Maricann is ready with its own line of gel caps, which it developed in partnership with another company, to help that trend along.

First we conquer Canada, then we take Berlin

The Canadian operations are clearly well on their way to developing serious momentum, and the plan is to create the same success in the German market.

It was only in January of this year that Germany’s lower house of parliament, the Bundestag, voted to legalize medical cannabis. The drug will be available from pharmacies to patients with a prescription, and importantly for companies serving the market it looks like it will be covered by German health insurance.

“I think we will see almost a carbon copy of the Health Canada program as far as cultivation and regulations are concerned. The difference will be in distribution,” posits Ward. “It won’t be supplied directly to patients but through major pharmaceutical companies or wholesalers, or distribution through pharmacies. Germany’s market will likely remain medical for a long time, but from an ease of access standpoint I think it will move ahead of Canada because of the German population’s propensity to seek alternative therapies.”

Ward explains that companies hoping to grow cannabis in Germany need to possess over three years of cultivation experience, a benchmark that the team at Maricann is able to meet. The company is currently preparing an initial 150,000 square feet of space in a facility that it has the option to purchase. “All we have to do is install the tables, the fertigation system and the lights and we will be operational,” says Ward. “We are moving through the licensing process there right now.”

Ward comments that the team is happy working in jurisdictions where legalization is uniform on a federal level, contrasting the environments in Canada and Germany to that in the United States, where cannabis is illegal federally but many states have passed laws to make it legal.

“Much of the rest of the world, and especially western Europe, is moving forward with legalization in some way,” observes Ward. “There is a much larger population that Canadian companies can export our experience to, and in doing so create best in class companies that compete globally. We might only be talking five or six years, but that is a lifetime of experience in the cannabis sector. I see Canadian companies moving into other markets and helping governments with regulatory issues so that their citizens can look forward to safe, reliable access to high-quality cannabis.”

This story was originally published at www.proactiveinvestors.com on May 10, 2017 and featured in The CSE Quarterly.

Learn more about Maricann Group Inc. at https://www.maricann.com/ and on the CSE website at http://thecse.com/en/listings/life-sciences/maricann-group-inc.

Namaste Technologies moves closer to buying “vaping” online business

The acquisition by Namaste Technologies Inc (CVE:N) of various assets currently owned by Haze Industries has moved a step closer.

The Canadian company, formerly known as Next Gen Metals but now focused on medical marijuana and alternative medicines, said that it has now signed an asset purchase agreement that will see it acquire a number of web site domains, a customer list of more than 150,000 individuals plus intellectual property and goodwill of VaporSeller, an e-commerce platform for the fast-growing vaporizer and accessories market.

Namaste will pay US$500,000 in cash when the deal closes, and will hand over five million shares of the company. In addition there is any earn-out clause of US$1.5mln over a three-year period that could be triggered by revenue, margin and operational controls.

Namaste anticipates closing the transaction on or about June 30, 2016, subject to the receipt of all director and regulatory approvals, including approval of the Canadian Securities Exchange if required.

Namaste also revealed it has arranged a non-brokered private placement of at least 8.5mln units but no more than 12.5mln units at C$0.12 a pop, to raise between C$1mln and C$1.5mln.

Each unit comprises one common share of Namaste plus half a warrant; each pair of warrants would entitle the owner to exchange them for a single common share upon payment of C$0.18 any time up to 24 months after the date of issue.

The net proceeds from the offering will be used to fund cash closing costs associated with the VaporSeller transaction, inventory expansion and for general working capital purposes.

“The signing of the definitive agreements for the acquisition of VaporSeller represents a significant step forward in terms of the completion of this transaction. As the first of multiple opportunities we have identified to expand through acquisition, our management team is high focused on ensuring an efficient and effective execution of this transaction as well as a seamless integration of our current platform and VaporSeller,” said Sean Dollinger, president and chief executive officer of Namaste.

This story was originally published at www.proactiveinvestors.com on June 8, 2017 and featured in The CSE Quarterly.

Learn more about Namaste Technologies Inc at http://www.namastetechnologies.com/ and on the CSE website at http://thecse.com/en/listings/diversified-industries/namaste-technologies-inc.

The Canadian Bioceutical Corporation profits from shift to US cannabis market

Technology companies often attribute their success to a strategic “pivot” that saw them de-emphasize an early business in favour of what ultimately proved to be a better idea.

The burgeoning cannabis sector now has its own example in the form of The Canadian Bioceutical Corporation (CSE:BCC), which shifted its focus to the United States after identifying cultivation opportunities it could advance much more quickly than its founding project in Canada.

Through a strategy of acquiring existing businesses and providing capital and management expertise to accelerate their growth, the company has positioned itself to be profitable early in its young life.

With its first acquisition, completed in January 2017, The Canadian Bioceutical Corporation acquired highly profitable assets in Arizona. These were only consolidated as of January 1, so their contribution to the company’s full financial year, which ended March 31, will be limited. Still, they will provide a good indication of what can be expected in coming quarters.

The Arizona assets are the first of several that chief executive officer Scott Boyes is working to bring under the company’s umbrella. The plan is to move quickly, setting up shop in states where risk is quantifiable and businesses are available at valuations that allow for multiple expansion as capacity is expanded on both the production and distribution fronts.

Unlike Canada, the US cannabis cultivation market is fragmented

“The market in the US is highly fragmented, characterized by a landscape with thousands of small producers,” explains Boyes. “This contrasts with Canada, which has a much more concentrated landscape with fewer but larger players.”

Boyes shares that the Arizona deal cost US$25mln, and was concluded at around 1.5 times revenue and 4 times cash flow, undeniably reasonable metrics for a business in the super-hot cannabis sector.

The Canadian Bioceutical Corporation gained more than just operating assets, as Boyes was eager to work with the executive who had built the Arizona business, Beth Stavola – so much so that Stavola is now president of the company’s US unit, CGX.

Purchasing the Arizona assets was an easy decision based on the results of extensive due diligence, which included an audit by a Canadian accounting firm and other assessments.

“The business checked every box,” says Boyes. “It was in a state where the regulatory authority is friendly. Also, when you obtain a license in Arizona you get seed-to-sale capability, with the right to operate a dispensary, to have one on-site cultivation, one off-site cultivation, run a full concentrates operation, and do your own packaging.”

Boyes explains that Arizona laws dictate medical cannabis operations must be owned by non-profit organizations, and therefore The Canadian Bioceutical Corporation does not cultivate or sell cannabis products itself in states with this type of legislation. Rather, the company purchased management, real estate leasing and other entities providing support to the licensed cultivation and retail operations under long-term services agreements. Because the owner of the license and facilities is a non-profit, the cash left over after operating costs flows to the service providers.

The company also holds another license that will enable it to open a third Arizona dispensary, which is currently in development. All three will operate under the Health for Life (H4L) banner and carry, among other products, the award-winning Multiple Extracts (MPX) brand Stavola established.

One final note on Arizona is that legalization for adult recreational use is off the table right now, following a November 2016 vote on Proposition 205, which proposed legalizing cannabis use for people 21 years of age and older. The “No” victory was far from overwhelming, with the vote decided by a margin of fewer than 3 percentage points.

After praising Arizona, the company is turning its focus to Massachusetts

The company’s second big acquisition of 2017 is taking place in a state where voting in November approved recreational use. In early April, The Canadian Bioceutical Corporation announced a Letter of Intent (LOI) to purchase a 51% stake in Massachusetts-based IMT LLC. The deal will take place via CGX using a services company structure similar to that employed in Arizona.

Assets include a 40,000 square foot facility zoned and licensed for cannabis cultivation and a license to open up to three medical cannabis dispensaries. Annual capacity is an impressive 2,500 kg of cannabis and 500,000 g of concentrates. The first dispensary, in the city of Fall River, will be adjacent to the cultivation facility.

The acquisition calls for a US$5.1mln cash payment to IMT LLC and a further US$2mln in capital to build the second and third dispensaries. Massachusetts could begin licensing dispensaries for recreational sales as early as January 2018, with preference given to medical-use locations already up and running.

In early May, The Canadian Bioceutical Corporation announced it is moving into a third market, as it is acquiring 100% of GreenMart of Nevada, a licensed cultivation and wholesaling business based in Las Vegas.

The growing facility is fully operational and can produce 1,600 kg of dried cannabis per year plus 85,000 g of concentrate. Total cost is US$19mln, payable half in units of the company and half as a non-interest bearing promissory note.

Boyes notes that while Nevada’s population is less than three million people, over 42 million tourists visit each year, so with voters having recently given the green light for recreational use the total market could be very large.

Completing over C$50mln in acquisitions during the first half of 2017 would be quite a feat, and a US$25mln line of credit the company secured in May will play an important role. It will also help to limit dilution; the company stated its intent in late March to raise US$20mln by issuing new shares but decided to raise less (the book was closed at US$11.2mln) because the line of credit can cover a substantial portion of near-term spending.

While Boyes says the Canadian cultivation license for its facility in Owen Sound, Ontario, is still something the company would like to obtain, the focus for now is definitely the US, where he says more acquisitions can be anticipated this year.

The company is undervalued relative to many other cannabis players in Canada

Boyes has been somewhat surprised that his company has not achieved the valuation multiples enjoyed by some other public cannabis issuers in Canada, but thinks this will correct itself over time as investors become more comfortable with businesses operating south of the border, where on a federal level the possession of cannabis remains illegal.

“There is a degree of concern about the political environment in the US, but the more you are involved down there the less you see it as a risk,” Boyes concludes. “Some states may need to tighten their regulations, but overall the industry is growing too quickly and simply creating too much employment and tax revenue. We may see some speed bumps along the way but, in my opinion, the US is a good place to be growing a business such as ours.”

This story was originally published at www.proactiveinvestors.com on May 8, 2017 and featured in The CSE Quarterly.

Learn more about Canadian Bioceutical Corporation at http://www.canadianbioceutical.com/ and on the CSE website at http://thecse.com/en/listings/diversified-industries/the-canadian-bioceutical-corporation.