Melissa Rolston on Empowerment from Skin to Within – the JADA Story

CSE’s Grace Pedota was recently joined by Melissa Rolston, Founder of JADA, who dropped by to share her personal journey in the cannabis industry which has led her to launch her new venture – a cannabis infused skincare brand.

In this discussion, Melissa shares how she was inspired by her work in chronic pain management and photography (1:15), how one particular case she treated demonstrated how cannabinoid therapy can work effectively alongside chemotherapy (4:45), and the key allies in the industry that have helped her in her mission to evangelize “Empowerment from the skin to within” (10:26).

Listen until the end to learn about her new company called JADA, why she has partnered with DANA to address the market for high-end cannabis jewelry, and how her company is set up to help “break the stigma”.

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Versus Systems: Clever technology increases advertising engagement to extraordinary levels

Versus Systems (CSE:VS) is disrupting the conventional advertising landscape with an innovative choice/reward model. The company’s main focus is the esports sector, where game developers use its WINFINITE platform to create competitions that provide players the chance to win a variety of attractive prizes.

The platform can be accessed via mobile, console, PC games and streaming media, and thanks to that reach some half a million prizes have been awarded already. WINFINITE is used for games in the US and Canada right now, with a UK launch slated for December. Plans call for making it available in continental Europe in the first half of 2020, and in China around mid-year.

In August of 2019, Versus struck a licensing deal with hardware giant HP that will see its technology used in a variety of HP products and services. Public Entrepreneur caught up with Versus Chief Executive Officer Matthew Pierce last month to learn more about the company and its considerable potential.

How is the advertising landscape changing and how does Versus fit into that?

I think media is changing but that advertising is changing more slowly. People in general don’t care for old systems of advertising, or paid ads. We measure videos not by whether they were watched but by how many seconds they were watched before someone hits X to escape. People don’t care for banner ads or interstitials or pre-roll or any of those kinds of things.

And as content, as media, as games, as shows and all those things become more interactive, and more choice-based and more tailored to the viewer or the player, so too does the advertising. The advertising needs to be just as thoughtful. And for us, the marriage of choice and reward, which is to say that when you get to choose what you want to play for or you get to choose what you’re trying to win, it introduces the idea of earning it, so it no longer feels like an ad, but rather a prize. It feels like something you’ve earned and that makes all the difference.

Can you explain how WINFINITE works and how you came up with the idea?

In any Versus-enabled content, whether it’s a show, a fitness app or a video game, when you enter into the experience, when you’re about to load up the game or when you’re about to watch your show, there’s a menu that asks what you want to play for. You can choose anything from downloadable content in a video game to trips, to apparel, to food, to electronics. There’s a huge number of things that we’ve given away, from tickets to BlizzCon to hats and shirts.

Users see a win condition that says, “If you do this then you will get this, or if you do that then you will be entered into a sweepstakes to get that.” People try to win the race or crush the right amount of candy and then you get sent a message saying that you either won it or you didn’t. If you didn’t, you try again or try to win something else. It doesn’t interrupt the show or the game. It’s there to enhance the experience.

The company came out of an incubator whose limited partners included a large software development firm, a large law firm, and people with strong media backgrounds. The idea was to create something that’s in a really thorny regulatory space that is also difficult to achieve technically.

People love winning things and people love earning things. How can we make that real? We’ve been filing IP on it for years now. We’ve been granted patents covering how to do it and how to do it at scale.

Is it fair to say you’re focused mainly on the gaming space?

We very much like the gaming side of things. We also like things that look like games. Games are already made such that there’s what we call a “win condition,” and the win condition is very clear inside of a game – save this town, crush this candy, find the loot. That’s a really rich environment for us. But I also keep bringing up fitness because fitness looks a lot like a game as you try to run a certain distance or achieve specific goals.

What sort of feedback do you get from players?

Ninety seven percent of players interviewed that have used the platform say it makes the game more fun. And that is not true of most advertising, right? We did a huge survey with UCLA last year to talk about user behaviour and how people interact with media and it confirmed that people don’t care for ads. But 97% of people who play for rewards say rewards make the game more engaging. Once introduced to prizes, people play more and there’s not an ad unit anywhere that makes people consume the content more frequently.

How do you make money from this?

The business model works in classic advertising fashion, which is that the brands that want to reach these players pay to place their products inside of the content, the difference being that our engagement rates are minutes rather than seconds, and the transaction rates are measured in whole percents, rather than hundredths of a percent.

We are much, much, much more effective with respect to getting people to do something. Do they go into the store, or do they go to the website? It’s much more effective when you introduce these ideas of choice and reward. The brands pay for that because it’s just a more effective ad unit.

We split the revenue with the content owner, so in the case of HP we’re in all the HP Omen computers and we split the revenue with HP. When we are in a game we split the revenue with the game developer and the publisher. So, we make our revenue on a transactions basis. Every time someone makes an attempt to win a prize, the company who put up that prize pays for that engagement.

You’ve struck a number of partnership agreements. Is there one deal you are particularly proud of?

The HP deal is massive. HP is a US$50billion company and we have a multi-year deal. They are well known for being safe and secure, and conservative and thoughtful and the idea that they would partner with us, I think, suggests that we’ve worked very hard to be a credible, trustworthy, thoughtful, capable company. HP sells tens of millions of computers a year and they’re one of the most highly respected hardware manufacturers on earth. They have access to not just gamers, but to anything you can do on a computer that you want to encourage or incentivize. We can put rewards around things other than games. The platform also works extremely well for fitness apps and certain business applications.

What would you say to potential investors about the group’s future targets?

Now’s a great time. You start talking about tens of millions of machines from the HP deal and then you also start talking about the opportunities that we’ve got when we grow into some of these other markets, particularly in Asia. You have access to a lot of people playing a lot of games or a lot of people engaging with these apps. And they want to win. It’s perfect for us.

This story was featured in the Public Entrepreneur magazine.

Learn more about Versus Systems at https://www.versussystems.com/.

Cultivar Holdings Inc. Opens the Market at the CSE Media Centre

The CSE was excited to welcome Cultivar Holdings Inc. to open the market at the CSE Media Centre on January 29th, 2020.

Cultivar Holdings Inc. is an early stage cannabis company based in Toronto, Canada. The company cultivates cannabis in Jamaica, and has a variety of offerings in the industry, ranging from cannabis derived products, to proprietary artificial intelligence technology that can help workplace safety and law enforcement detect cannabis impairment. Its products include consumable health goods, natural cosmetics, and genetic tools for opioids and cannabis dependency. With its ongoing research and development efforts, Cultivar Holdings’ vision is to be a global leader in the cannabis space.

“It’s a pleasure being here, [ringing] the bell today,” remarked COO Dr. Rahul Kushwah. “It’s a journey that started over two and a half years ago. And our stronghold is really our impairment technology, because when you look at the landscape, impairment – whether it’s cannabis or alcohol – is actually a huge concern. But especially in the cannabis space, there is nothing out there that can identify impairment.”

He added, “there’s actually a lot which is in the pipeline, which I can’t disclose right now. What I can say is that we are developing our entire business around AI and impairment technology. And as this year progresses, there are going to be a lot of developments which should be disseminating, so it’s a great space to watch.”

CEO Sheldon Kales and other key members of the Cultivar Holdings team were also in attendance at the Market Open.

View the podcast on this Market Open featuring Dr. Rahul Kushwah here.

For more details about the CSE Media Centre, including information on upcoming Market Opens, please visit the CSE website, or follow us on social media.

Dr. Rahul Kushwah on How AI Will Revolutionize Impairment Testing

CSE’s Barrington Miller was recently joined by Dr. Rahul Kushwah, COO at Cultivar Holdings Inc. (CSE:CULT), to discuss his company’s recent listing on the Canadian Securities Exchange and the innovative work his company is pursuing in the application of artificial intelligence to impairment detection.

In this conversation, Dr. Kushwah shares his thoughts on why its important to challenge the widely accepted correlation between impairment and THC levels (1:19), why Fortune 500 companies are interested in their testing (3:13), and how Cultivar is applying AI to non-invasive impairment testing (4:35).

Listen until the end to hear about how Rahul’s experience as a research scientist led him down the path to public entrepreneurship and why the company has cultivation interests in Jamaica.

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Anish Chopra on Why You Need to Understand Risk Tolerance

CSE’s Phillip Shum was recently joined by Anish Chopra, Managing Director at Portfolio Management Corporation, to discuss his market perspectives based on a 20+ year career in asset management.

In this discussion, Anish shares how he sets himself up to recognize good opportunities in bad markets (3:24), why fundamentals are the key entry-point to investing in 2020 (4:55), and why it is imperative to understand risk tolerance before determining a fit with a financial advisor (6:26).

Listen until the end to hear Anish’s thoughts on the differences between the US and Canadian investment landscape, and his professional journey that has led him to being one of the most respected market commentators in Canada.

New Wave Esports: Esports investments are the latest thing and this CEO is at the top of his game

Esports in North America is undergoing a metamorphosis. Video games like Fortnite and Overwatch have taken the world by storm, viewership at tournaments is bigger than ever and capital is flowing into the industry from sources that had never considered it before.

New Wave Esports (CSE:NWES) provides the spark for organizations looking for oxygen in the space, whether it’s esports teams, platforms, tournament organizers or technology innovators. If you have a great moneymaking idea in this industry, New Wave Esports is the type of company you turn to for the capital to make your dream a reality.

And it has not taken long for the company’s investments to begin paying off. In July, Lazarus Esports, a competitive team in which New Wave owns a minority stake, took home US$3.5 million at the Fortnite World Cup.

At the helm is Chief Executive Officer Daniel Mitre, who perfectly fits the profile of an esports CEO. He’s fresh-faced – young enough to have spent his whole life growing up around video games, but old enough to remember carrying a roll of quarters to the arcade. With a beard, gauges in his ears and a sleeve of tattoos down each arm, he looks the part.

New Wave Esports went public in October and Public Entrepreneur caught up with Mitre in the midst of a road show to talk about where his company, and the industry as a whole, goes from here.

Tell me about your background in the gaming industry and how New Wave Esports came to be.

I’ve been in gaming for over 17 years. I started off testing video games way back in the early 2000s, where I learned the fundamentals of game development and gained an understanding of what motivates players to keep coming back.

I went on to do community management, and eventually started doing global marketing campaigns. I’ve worked at Electronic Arts (EA), THQ, Sega, Sierra Online, and various music and toy companies.

The past five years I’ve been at EA, and I got to work on the Battlefield franchise, as well as some other competitive titles like FIFA, Madden, NBA Live, and Need for Speed. And esports has always been a common thread in the sustain/retention models of those games, so I’m able to bring my gaming network and my expertise to New Wave Esports.

Then, I met with Trumbull Fisher. He’s a 15-year finance industry expert who’s raised capital across Canada for industries like cannabis and mining, and he brings capital markets experience as New Wave Esports’ president. Between my gaming and his finance, we bring the investment vehicle that is New Wave Esports.

How does your investment process work?

We set up the company in two pillars, the first of which is the acquisition arm. We’re looking for companies that we can fold into the New Wave Esports family. They benefit from the performance of our shares as well as the ancillary services we provide, and their revenues are directly turned into our revenues.

The second pillar is the traditional holdings arm. We’ve built a phenomenal portfolio of minority investments, and as we go forward, I expect to see a shift in our investment approach toward majority stake investment.

We‘re unlike a traditional investment group that just puts in a bunch of money and checks in every quarter. We place investment capital and take stock options in companies, and we sweeten the deal with financial advisory services and new revenue streams.

We facilitate new sponsorships for teams and collaborations with big franchises like Fortnite or Battlefield, as examples, and that’s where teams thrive.

What do you look for when considering a potential investment?

We look at the esports industry in four verticals. The first one is teams and organizations – that’s Lazarus.

We also look at tournament organizers, whether an event is in your local hometown or a big arena – that’s Even Matchup Gaming.

The third is platforms and networks. This is anywhere gamers congregate online, such as online tournaments or an esports gambling platform – that’s PlayLine.

Fourthly, we target technology and tools, which is really the backbone of the industry. A lot of this is behind the scenes, including data insight and business intelligence for esports companies to better know their audience or build a better experience for gamers coming in – that’s Thunderbolt CDG.

We look at the esports industry as an ecosystem. First and foremost, we look for ethical teams that share the same vision as us. Secondly, we ask if these companies are led by executives that have run businesses before, and if not, how we can help. Thirdly, we consider whether these companies are positioned to thrive in a space that may be saturated or may not have any competition.

Speaking of Lazarus, congratulations are in order after the team won $3.5 million at the Fortnite World Cup this summer. What was your involvement there?

Lazarus is owned and operated by an organization called Tiidal. We came in and invested a sizeable chunk into Lazarus in March.

Not many people knew about Lazarus before the Fortnite World Cup, but the tournament came around and Lazarus took second in the duos and fourth in the singles, which led to that $3.5 million revenue into Tiidal. That put Lazarus on the map as one of the highest grossing esports teams in the world.

I was at the airport and I got a call from one of our advisors who said, “Dude, Lazarus just took home $3.5 million! Their athletes are like rock stars now!” I love calls like that.

Why did you decide to take New Wave Esports public?

We see the public vehicle as an opportunity for the esports community as well as other investors and brokers to invest in the industry. We are the first esports investment company to be traded publicly on the Canadian Securities Exchange, and we wear that with a badge of pride.

We went live on October 28, and so far it has been phenomenal. This generates exposure for us and opens up new opportunities worldwide. Not only are we listed on the CSE, but we also just listed on the Frankfurt Stock Exchange in Germany, where we know esports is massive.

How do you see esports evolving in North America?

The esports industry is still very much growing in North America. Asia is 20 years ahead of us, so we look to them as an opportunity to replicate those tried and true models. That’s why we opened up the New Wave Esports Asia department.

But with North America as an economic stronghold, everyone’s looking to see what we do to push esports forward. You’ve got celebrities like Will Smith putting sizeable money into a team called Gen G, and Drake took an ownership stake in gaming group 100 Thieves.

It’s just starting in North America, so the revenue multipliers have yet to hit. So, if you’re at the ground level, you’ll see that coming through.

Look, gaming has been around for 40 years, and it’s always been entertaining to watch someone play who’s better than us. I remember swarms of people at arcades watching someone play Street Fighter, and that’s why Twitch exists today.

As a video game player, how does it feel to be running your own esports company?

If you were going to tell 15-year-old Dan that he would have a career built on video games and ultimately become the CEO of an esports company, he’d be saying, “Get out of here, that’s insane.”

Back in the 90s, video games were still kind of for nerds. You didn’t have Internet connectivity, a mass audience and mobile games that make gaming accessible to everybody.

It’s phenomenal to see gaming grow, and it has created a community that I absolutely identify with. I’ve been able to build a sustainable life from it, and this is an opportunity for me as a CEO to grow the video game industry.

This story was featured in the Public Entrepreneur magazine.

Learn more about New Wave Esports at https://newwaveesports.com/.

Peter Hodson on the 103,000 Answers He Has for DIY Investors

CSE’s Phillip Shum recently sat down with Peter Hodson, the founder of 5i Research, and former Chairman of Sprott Asset Management, to discuss what he’s learned over his 50 years of investing experience.

In this discussion, Peter shares the feeling he gets finding the little gems that turn into the “next big thing” (2:29), how his firm has answered over 103,000 questions from DIY investors, (7:08), and his explanation as to why a value investment isn’t necessarily a cheap investment (10:12).

Listen until the end to hear Peter’s thoughts on why there’s always something to worry about (in investing), and how to combat that with a long-term investment plan. Peter also shares his insights on “FANG” stock and why he believes their value may be immune to government intervention.

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Interview With Canadian Securities Exchange CEO Richard Carleton: 2019 Review

The CSE is known to share milestone moments with their newly listed companies, but it also celebrated some major milestones of its own this past year. In addition to its 15th anniversary in 2019, the CSE also celebrated 129 new listings – including three Israelian companies – the signing of an MOU with the Jamaica Stock Exchange, and a growing team of over 50 employees. Scroll on for an exclusive, in-depth interview with CSE CEO Richard Carleton, as he discusses industry challenges from 2019, areas of growth for the CSE, and what’s in store for the new decade.

PM: First of all, congratulations on marking your 15th year as an exchange in 2019. We’ll review some developments in a moment illustrating how the CSE has grown in size and stature. But let’s begin by discussing what it’s like to take a concept built around superior issuer service and grow it into a securities exchange that now routinely attracts listings and capital from around the world.


RC:
The quick answer is that we are not ready to declare victory just yet. Yes, we are pleased, and in some respects, humbled, with the success we have had to date. But we know there is a lot more work to do to provide the best possible listing and trading environment for issuers and investors before we can really feel any significant level of satisfaction.

We still have a lot of work to do on improving access to the CSE from outside of Canada. We also want to engage with the institutional investor community to provide a greater diversity of shareholders for CSE issuers so we are able to expand beyond the traditional base of retail investors who have supported CSE issuers to date. There is still quite a bit of work for us to do to provide that best possible experience for issuers and the investing community.

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PM: Comment for us on market quality. The CSE team has been very successful at establishing relationships on the data side and ensuring easy access for investors to place orders. Are we seeing the hallmarks of a quality market, such as market depth, tight spreads and lower volatility? And what is the CSE doing to continue to enhance market quality?


RC:
We are constantly looking for ways to improve all of the benchmarks of market quality you mentioned, whether it’s spreads, turnover, trade continuity, or other measures. And let’s face it, it is particularly challenging in the small cap space, where companies can be subject to significant levels of volatility.

Again, we think that providing as broad access as possible to all categories of investors in Canada, the United States and beyond is key in terms of improving market quality. The more participants you have in the auction process, the better the outcomes will be for investors, as well as for companies looking for an appropriate valuation of their shares and the ability to conduct financing activities at the lowest possible cost of capital.

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PM: European retail and institutional investors often participate in North American small cap opportunities. What can you tell us about trading access for European investors?


RC:
Canadian and US small cap markets got caught up in a European securities regulator initiative a few years back to limit access to the so-called penny stock market. As a result, most of the bank- and institutional-owned advisors in Europe are unable to provide trading services for companies listed on the CSE, over the counter in the United States, and various other markets that cater to small cap companies.

That said, we have made inroads in improving coverage from the “self-directed” market in Europe, and that has assisted companies in broadening their shareholder base to interested retail and private investors on the continent. These folks have become an important source of capital for our issuers: in the cannabis space, for instance, 15% of the capital raised in 2019 came from Europe. So, people who have conviction are finding a way to trade shares from overseas.

All that having been said, the CSE team continues to work with various platforms and service providers who can manage that order flow into Canada from other parts of the world, and that will be an important area of focus for us in the coming year.

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PM: Let’s look at a few numbers: listed securities up 23% in 2019 to 569, total value of financings down 42% to $3.15 billion, trading volume down 31% to 19.8 billion shares, and  value of trading down 17% to $16.9 billion. Despite these declines in KPIs, 2019 still stands as the second best year for trading and financing in the exchange’s 15 year history. Take us behind those numbers and tell us what you saw and heard to help us make sense of it.


RC:
It’s really quite straightforward. On the finance side, 2018 was the year that the big US multistate operators came into the Canadian Securities Exchange. We saw record amounts of money raised that year, led by a handful of very large US companies. As valuations fell in 2019, companies were not in the same strong position to raise additional capital by way of a secondary offering. It would have represented considerable dilution of the original investors.

We saw a real shift in 2019.  There was a lot less capital raised in the cannabis sector and, secondly, the capital that was raised was through secondary offerings of convertible or debt-related securities issued by existing companies. And I think it’s fair to say that there were a lot of private companies in the United States that took a wait-and-see attitude in 2019 to watch whether valuations for US companies would recover. And if and when they did, those companies would be re-visiting their plans to do a  public offering.

I’m pleased to say that, from the beginning of November, the US cannabis group is up more than 20%, with the positive price performance accelerating in recent weeks. That should be a positive leading indicator for us for the coming year.

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PM: The CSE’s growth has been driven by multiple industry sectors, but far and away the most important for the past few years has been cannabis.  It’s fair to say that this sector ended 2019 with some challenges on its hands. Talk to us about 2019 in terms of the way the market transitioned for cannabis, and what are you hearing that might be of use to those trying to understand where it goes next?


RC:
The cannabis sector as a whole traded with very high correlations through 2019. What I mean is that whether the company was a Canadian cultivator, an extraction company, a US multistate operator, or another type of company, the stocks tended to trade up and down with a very high degree of correlation.

That was a source of some frustration for the management teams of US companies, as many of them were meeting or exceeding their revenue and earnings forecasts. Many are doing really well and expanding their networks into additional states. So, those companies, while they may have a different set of challenges in front of them than do Canadian LPs, have an addressable market that is already significant and will only grow going forward. We are beginning to see support for that theme, and it does look like the correlations are breaking down; companies are being judged more on specific achievements than prevailing sector sentiment.

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PM: What about other sectors? Are there any already shaping up with a particularly interesting outlook as we begin 2020?


RC:
We did a lot of outreach to the esports community last year and we have had success with some listings in that space already. It is a very interesting market. I don’t think it is clear what the most successful investment approach in the sector will be, but I believe investors accept the idea that as time goes on, people will spend more money and time on esports.

But in terms of the number of companies that joined the exchange last year, half of them were gold exploration companies. That was certainly driven by the fact that the value of the underlying commodity increased last year to well above $1,500 per ounce. And after many years of very little activity in the space, we saw a number of get funding, join the public markets and begin to pursue exploration programs. We see that continuing in 2020, in all likelihood, particularly given the backlog of applications to list on the CSE and continued strength in the price of gold. I guess it is kind of getting back to our roots in many respects, as for most of our existence the mining sector has been far and away the largest industry group on the exchange.

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PM: With mineral exploration taking on renewed importance, do you have any thoughts on the Save Canadian Mining initiative and the impact of short selling on the mining industry?


RC:
The issue is not short selling as much as it is abusive short selling. And we already have a lot of rules in place designed to curb abusive short selling. I am concerned that some of the measures proposed, regarded by many as a panacea, may not in fact be the magic bullets they are purported to be.

I think that the first step is taking a hard look at whether our current rules are being circumvented in any way. We certainly don’t lack anecdotal testimony about the evils of abusive short selling. But it is a complicated issue and I have concerns that you could materially affect share turnover and liquidity if we make well-intentioned but poorly applied changes to the short sale rules. As I say, it is a very complicated topic, and to the extent that there is abusive short selling taking place, I believe that it is likely well within IIROC’s ability to address right now without any additional rules.

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PM: The plan to create a senior tier at the CSE was revealed in 2019. What is the status, and is there any interesting feedback you can share with us from issuers, regulators or others regarding this idea?


RC:
Basically, we have completely rewritten the listings manual for the Canadian Securities Exchange in order to effectively create two tiers of issuers. This is designed to reflect the distinctions in Canadian securities law related to venture issuers and non-venture issuers.

Non-venture issuers, who are the more senior companies with larger market capitalizations and complexity of operations, have different rules around corporate governance, financial reporting and continuous disclosure. Timelines for them to report quarterly and annual audited financial statements and other burdens more appropriately borne by larger companies are a good example.

We have a significant cohort of companies which, if they were listed on two of the other exchanges in Canada, would be categorized as non-venture issuers.  We think it is appropriate to put in place a formal framework to ensure that those companies are regulated by us as non-venture issuers, as they are on other marketplaces.

It is important that comparable companies are subject to the same level of oversight and regulation. The companies win because investors know that there is no possibility of regulatory arbitrage or differences in reporting between the CSE and other exchanges. If companies on the senior tier become eligible for margin under IIROC rules, as we are working towards, that will improve liquidity in those names because trading and corporate finance costs should go down.

We have completed the work and are now basically huddled with regulators in BC and Ontario on the final few points. We hope to get clearance from the regulators to soon publish the new listings manual for a 30-day public comment period. If all goes well, we look to implement these new rules shortly after the 30-day comment period expires, and on the receipt of formal regulatory approval from the two commissions.

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PM: What, if any, impact will this have on fees at the exchange? Your fee structure has always been a factor that differentiates you positively from other exchanges.


RC:
We have made some adjustments to our fee schedule for issuers. This is both for applications and for what we refer to internally as hosting fees, i.e. the monthly fees that companies pay over the life of their listing on the exchange. We have established four tiers, which are market capitalization-related, with different levels of fees.

Going into this exercise we knew there were a few governing principles. We knew that we wanted to maintain one of our key strengths from a pricing perspective, and that is cost certainty. So, regardless of how much activity a company engages in – whether it is secondary financings, business changes or another activity – they are going to pay the same to us regardless.

Secondly, we know that as the relatively new kid on the block, we do need to be cost-competitive with all of the alternatives, whether they be exchanges in Canada, or the over-the-counter market in the United States, or some of the venues in Europe that cater to early stage companies. We have achieved that in this exercise, but we still gain considerable resources, both from the growing number of listed companies and the fee increases that have been introduced. It enables us to reinvest in the work that we do on behalf of our issuers in a variety of ways, one of them being to help them tell their story in a number of ways to a market that is very crowded and competitive.

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PM: The second half of last year saw three companies from Israel list on the CSE, the first ones from that country. You signed an MOU with the Jamaica Stock Exchange. How important are international activities to the CSE today, and how do you see them being important in the years ahead?


RC:
Our international activities have largely been driven by our support for and involvement in the cannabis industry. The three Israeli companies that have listed are in different parts of the cannabis space, and we have the same situation with the Jamaica Stock Exchange. There is a significant legacy industry in Jamaica which is in the process of being legalized. It is a low-cost cultivation jurisdiction, but they have challenges locally from banking and other perspectives in listing and trading those stocks. Our work with the Jamaica Stock Exchange is to help Jamaican companies raise capital from Jamaican and CSE investors and have a liquid market in their securities here on the CSE, which is something we are really looking forward to.

In the case of the Israeli issuers, we have done good work with the OTC Markets Group out of New York, collaborating on what essentially amounts to access to North America in a single transaction. Companies that become Canadian reporting issuers and list on the Canadian Securities Exchange, in addition to being able to raise money from Canadian investors, are also able to take advantage of prospectus exemptions in the United States to do private placement financings with US investors. These companies are also able to access liquidity in the US through the markets operated by the OTC folks.

This is a very powerful tool. For a small Israeli company to consider the ability to work in the United States, it is a very big leap, and very expensive, and risky. We can cut a lot of this cost and risk out by providing them access to North America through a CSE listing.

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PM: The CSE does a lot of work on behalf of the issuer and dealer communities that people never hear about. Is there anything interesting going on in regulatory or other realms that the exchange is helping to shape?


RC:
We are an active and engaged participant in the ongoing debate over public capital markets policy. We routinely submit comment papers to the securities commissions and are represented on a number of stakeholder committees and industry boards to advance the interests of our listed companies.

The biggest challenge for companies who are nearly public, in reality, is coming to grips with the fact that the going-public transaction is not the goal, but rather just the beginning of the heavy lifting. Companies really do need to understand that they have to tell their story and win mindshare from investors in order to stand out from what is a very, very large group of peers.

What we’ve tried to do is give them opportunities to tell their unique stories in a number of  different ways. We initiated market opening ceremonies for our issuers, which tie in with various media outlets with whom we are affiliated to give them more exposure. We also created a podcast studio inside our head office where issuers and thought leaders from different industries have conversations about issues of interest to the CSE community. There has been great pickup on these services, as we can see how many people listen to a podcast and how many people follow us on social media. So, there is that sort of general work that we do to provide our issuers with opportunities to tell their stories.

We are going to do more work in the coming year to teach companies about the public markets. How can they boost liquidity in their shares? What are the things that work for companies? And there are questions around market-making, and marketing activities – what are the marketing activities you need to undertake, what are the trade shows you need to be at? We try to really act as a concierge to give them access to as many opportunities as we can to help them navigate what is a very complicated, confusing and difficult world.

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PM: The CSE now has over 50 employees. How do you see the continuous expansion of the CSE influencing your culture, and what is the impact on your clients, the companies who list on the CSE?


RC:
Well, so far, the growth has not come at the expense of what I believe is an enthusiastic, fun-loving, “don’t take yourself too seriously, but do take your work seriously” kind of culture. And if that comes from the top, that’s great, as it’s entirely intentional. Our employee turnover is low, and the experience level is very high. I think we do have a healthy and strong culture in the company, and I am looking forward to seeing that continue in the future.

I get tremendously encouraging feedback from our clients – the issuers, the dealer firms and others – about how positive their interactions with our team members are, and that is extremely gratifying. In fact, that is about as good as it gets. I understand that those types of compliments are not won easily. From my perspective, it is very gratifying when I get that kind of feedback.

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PM: Finally, can you share with us your expectations for the exchange in 2020? And what do the next 15 years hold for the CSE?


RC:
That’s easy – there will be another chief executive at the helm 15 years from now, I’m pretty sure.  Nearer term, we clearly have a few key projects. We’ve talked about the new rulebook that will see the introduction of a senior tier, with the knock-on effect of margin eligibility for issuers. We haven’t mentioned that the new rulebook provides for the ability for the CSE to list ETFs and Special Purpose Acquisition Corporations, which is a vehicle that has proven popular for issuers to raise capital. So that will have a positive effect for us and provide new and interesting vehicles for investors.

We also haven’t talked about our clearing and settlement initiative to list, trade, clear and settle tokenized securities. We have been quietly working away on that last year and into 2020. I expect this is the year we will be making a formal application to the regulators for that clearing facility. It is a significant undertaking and there are a lot of different people at the exchange engaged in the effort. And again, we continue to receive a lot of support and interest from the issuer community to implement this ability to use securities tokens to raise capital.

As far as the longer term, I think there are some interesting challenges ahead for public markets generally. There is a lot of competition from different forms of private equity investment. Whether that is private equity or venture capital or different sources of non-public financing. Public markets are really going to have to continue to make their case to consumers of investment capital and constantly address areas of inefficiency and cost. You don’t have to look very hard to see studies or commentary on the benefits of staying private, for the technology and life sciences industries in particular. I think that is going to be a big theme over the next few years. Essentially, is the existence of the public market assured? Is the Canadian Securities Exchange going to continue to be a venue for companies to raise capital? Or, is it instead going to be an exit for the early stage investors who are looking for public market liquidity? I think that is a hugely important debate that is already taking place, and the continued existence of the status quo is simply not assured.

HeyBryan Media: Home maintenance should be easy, safe and a few app-clicks away

HeyBryan Media (CSE:HEY) has its sights set on becoming to the home maintenance industry what Uber Technologies is to the transportation industry – a genuine disrupter.

In 2018, technologist and entrepreneur Lance Montgomery created the HeyBryan app, which seamlessly pairs homeowners and tradespeople. In short, the handyman app gives harried homeowners instant access to reliable experts in their zip code who can handle everything from electrical repairs to plumbing, and more.

Every expert undergoes a background check to ensure a safe experience. Montgomery, who has a strong track record of taking companies public, has done a good job of propelling HeyBryan’s user base, with the company recently announcing average monthly customer growth of some 115% since the beginning of 2019. Having contractor and TV personality Bryan Baeumler playing a key role in the business has certainly helped to drive that growth.

Public Entrepreneur caught up with Montgomery recently to talk about how he is creating a carpe diem moment for the company by tapping Canada’s $50 billion home maintenance market, while eyeing the even larger US market.

Can you share the story about how HeyBryan Media started?

HeyBryan started from a personal experience, as do most successful startups. One day, I came home and the dishwasher was broken. I did what everyone does and googled “dishwasher repair Vancouver” and got served with paid ads. Frustrated, I tried Craigslist and wasn’t comfortable with what I found. I didn’t feel confident about who would come, and what I would be charged. Are they vetted? Will they even show up? These are things homeowners deal with every day; it’s the small tasks that we all need done and it’s hard to find help.

So, I decided to research the space and really didn’t find anything that worked in Canada. That’s how HeyBryan Media was born.

Tell us about your marketplace app and what it does.

HeyBryan connects homeowners to home maintenance experts in your area, on your schedule. All experts are vetted and verified. It’s really an end-to-end solution that brings the connection together. Everything happens in-app – scheduling, payment, chat, ratings, reviews and rescheduling.

On the expert side, we provide the opportunity to work when you want and where you want. They set their own rates and get paid fast through the app, with money deposited in their account. We bring the business to them and allow both sides of the marketplace to rate and review each other. This gives us great data on the quality of the work and where experts rank in our system.

How long did it take the company to develop the app and line up reliable experts?

The app started slowly with just our CTO and me working on it in our spare time. But as we raised money, we were able to get additional support to speed up the process. To go live in Vancouver, we did a 30-day recruitment, so all in all it was 12 months from idea to first city launch.

Typically, does the tradesperson vetting process take a lot of time?

We partnered with Certn, an AI-based company that does ID/criminal and background checks in real time. We then have our customer success team onboard them, so it’s fairly quick. We currently have around 600 experts on the platform.

What are your key markets and how do you expect them to shape up?

We are currently live in Vancouver and Toronto with plans to expand across Canada in 2020. Our marketing efforts are showing growth in both markets and the focus is now on repeat customers, referrals and new customer acquisition, but the growth is solid. Future plans call for entering the United States.

What are the hallmarks of an innovative company and does HeyBryan fit the bill?

I think innovation is solving or disrupting an industry. This small task space has been painted with a negative brush and our goal is to change this perception. We are adding technology to a very outdated industry and bringing value to both the homeowner and the experts — this is highly innovative.

How important is it to have a company like HeyBryan with an aging Canadian population?

Peoples’ homes are their biggest asset and research shows that people are staying in their homes longer and home maintenance is a massive market. As the population ages, it’s important to have a trusted solution for this demographic so they can get help around the house with no worry.

Is the HeyBryan app the number 1 app for averting DIY (do it yourself) mishaps?

Yes, with a trusted brand like Bryan Baeumler, we feel we are number 1. There’s always competition, but we share the same values as Bryan and want to be the go-to home maintenance solution. We focus on the small tasks, so we are not looking to get into large renos, but if you maintain your home properly, you can avert larger disasters. Take a car – if you maintain it, the car will last longer, and you can avoid the engine blowing up.

Talk to us about the business model for the company.

Everything is done in-house, and we have a full team looking after technology, creative, design, development, data, marketing, sales and customer service. Everything has been built in-house, which allows us to grow and scale as well as pivot when needed.

The revenue model is two-sided. We take 20% of every completed task from the expert and a 7.5% trust and support fee from the customer. The customer fee takes care of our hard costs such as insurance/payment processing fees. All in, our margin is 27.5%.

HeyBryan is already disrupting the home maintenance industry, but do you have plans for new products?

Yes, we are exploring many avenues both in strategic partnerships and complementary new revenue streams. The opportunities in the gig economy are endless and we’re excited about the future of the overall company.

You were successful in getting Bryan Baeumler to sign on as the name brand and face of your company. How does the celebrity endorsement help keep marketing costs in check?

Securing a celebrity endorsement was a massive win. Trying to build brand awareness and consumer confidence is expensive and time-consuming. Bryan brought that reputation, as well as awareness and trust. We can leverage Bryan’s following and his massive reach allows us to spend money in other areas to evolve and grow the business.

You have the entrepreneurial DNA to take your idea and build it into a business. What is one of the important lessons that you’ve learnt?

Be patient and don’t try to rush to market with a sub-par product. Do your research, plan and always expect delays. The other major thing I learnt was how critical it is to have the right people in the right roles. Surround yourself with the right people in the right roles and allow them to shine. We have built an amazing team and I couldn’t be prouder.

This story was featured in the Public Entrepreneur magazine.

Learn more about HeyBryan Media at https://heybryan.com/.

Rana Vig on How to Maintain Investor Interest 365 Days a Year in Mining

CSE’s James Black and Barrington Miller (!) both recently sat down with Blue Lagoon Resources Inc. CEO Rana Vig to discuss the company’s new listing (CSE:BLLG) on the CSE and the lessons he’s learned through the first 10 years of his capital markets career.

In this discussion, Rana shares the origin of the company’s name and offers the “best” advice ever shared on #HashtagFinance (2:58), the importance of keeping investor attention year-round (4:27), and why he insists on being the “dumbest” person in the room (10:45).

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