thecse.com | @CSE_News
davidson new ad
Experts in helping entrepreneurs
fulfil their audit, tax, and listing requirements on the CSE.
Visit Us at the PDAC March 1-4, 2015, Booth 346
www.davidson-co.com
w w w . d a v i d s o n - c o . c o m
Take the bull by the horns. Bacchus Law Corporation is a boutique corporate and securities law firm known for helping fast-growing private and public companies finance, create and develop their businesses with speed and efficiency. Our expertise in corporate finance and securities law allows us to effectively advise emerging companies from start-up to going public in Canada through to becoming major players in their fields. We won’t let the bull throw you.
Securities Law contacts at Bacchus: Penny Green pgreen@bacchuscorplaw.com 604 632 1280
Kari Richardson krichardson@bacchuscorplaw.com 604 632 1284
Innovation. Efficiency. Speed.
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 1 - 2015
Contents CSE | Quarterly Issue No. 1 - 2015 www.thecse.com Publisher Fusion Publishing Media Inc. #317 – 1489 Marine Dr. West Vancouver, BC Canada V7T 1B8 1.888.925.0313 (Toll Free) www.FusionPublishingMedia.com info@FusionPublishingMedia.com Group Publisher Terry Tremaine Group Editor Connie Ekelund Production Manager Christie Smith Issue Editor James Black Free Digital Subscription Published by Fusion Publishing Media Inc. on behalf of Canadian Securities Exchange. To receive your complimentary subscription, please visit www.thecse.com and complete the contact form.
6
CEO’s Message
Feature Story 7 GoviEx in “perfect position” to capitalize on uranium market rebound by Deborah Bacal Company Profile 11 MGX Resources - New resource frontiers in BC may ease hurt from falling oil prices by Christian Vakenti 13
Renforth Resources - Past producer gets a strategic overhaul in Quebec by Christian Vakenti
15
CopperBank aims to become unique depository of established copper assets by Deborah Bacal
18
Pivotal says 2015 will be a big year with national presence, drug filing on the horizon by Deborah Bacal
21 BioMark brings new life to cancer detection technology by Deborah Bacal 23
Fundamental Applications aims to disrupt app space with vision, clever marketing by Peter Murray
26
UpSnap expands by bringing its targeted mobile advertising to small business owners by Deborah Bacal
www.thecse.com | @CSE_News
www.thecse.com | 5
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 1 - 2015
CEO’s Message
A
s the CEO of Canada’s fastest growing securities exchange, it’s always great to share news about what the team at the CSE is up to. With a record-breaking 2014 now behind us, I’m very pleased with how we’ve successfully executed on our mission to become a destination of choice for entrepreneurial public companies. As we press on into 2015, two reasons give me great optimism that our model and our outstanding service will continue to drive interest in the Exchange for Entrepreneurs. First, although the environment is very tough for early stage companies, capital raising via the CSE continues to improve. Looking back to where we were just one year ago, the number of financings and the value of those deals have increased substantially. As of January 2015, the number of financings is up two-fold to 27 and the value of those financings is up four-fold to $22 million compared to the same period in 2014. Companies across a wide range of sectors successfully raised money during the month. It wasn’t just existing companies that were raising capital via the CSE either. We also had our first IPO for 2015, Carl Capital, who chose to go public via the CSE. Another source of great progress for the CSE is improving the connectivity for retail investors. Starting off 2015 we are proud to welcome Canada’s largest online brokerage, TD Direct Investing, to the list of online brokerages with online order entry capability. With 11 Canadian online brokerages now connected to the CSE, we, along with our brokerage partners, have successfully managed to provide Canadian retail investors with convenient access to the 266 (and growing) listed securities on the CSE. Of course, the lifeblood of any exchange is the quality of companies that come through its door, and I truly believe our success is a credit to the work done by our listed companies to create value for their shareholders and to create wealth for all Canadians. In this issue we focus our coverage on several companies in the mining exploration business to coincide with the Prospectors and Developers Association of Canada Conference (PDAC) – the world’s largest mining conference that occurs in Toronto from March 1st – 4th. We also have stories covering more great entrepreneurial companies in the Life Sciences and Mobile Technology sectors. With no sign of slowing down, 2015 looks to be at least as busy as the year that passed. Enjoy the issue and we look forward to connecting with you soon.
“
...we are proud to welcome Canada’s largest online brokerage, TD Direct Investing, to the list of online brokerages...
”
Sincerely, Richard Carleton CEO The CSE - Canadian Securities Exchange
6 | www.thecse.com
feature story
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 1 - 2015
GoviEx in “perfect position” to capitalize on uranium market rebound by Deborah Bacal
G
oviEx Uranium, Inc. (CSE:GXU) is navigating While the Fukushima plight was no doubt a in a tough market like many other uranium setback for the industry, there are currently 94 developers, but the company has the percent more nuclear reactors under construction unique advantage of not only a stellar project, but and planned than at the height of the uranium also the flexibility to stand back and wait for the market in 2007, according to brokerage H.C. market to rebound as predicted. Wainwright. This is attributed to increased demand The company has already completed a from markets such as China, Russia and India. prefeasibility study on its large and high-grade “A lot is driven by the commodity price,” says resource at the Madaouela project in Niger, and chief executive and mining engineer Daniel Major, has started the environmental impact and social who is referring to when GoviEx will choose to assessment, which is expected to be filed in begin construction. “Our project is breakeven at February. The two combined will allow GoviEx to $50 per pound of uranium oxide, whereas most apply for a mining license sometime in the middle companies have projects that require a price of of next year, which would give the company two $75 plus. We are a very high grade project if you years to start construction. compare us to our peer group.” This gives the junior developer ample time to wait on the uranium market to revive itself, after the nuclear disaster in Japan in 2011 took the industry by storm, and sent prices of the material plunging. While spot prices have edged up recently — late last year crossing the US$40 per pound threshold — they are still far off from their heyday back before the Japanese earthquake and tsunami led to the shutdown of nearly all the reactors at the Fukushima-Daiichi atomic power plant. But new reactors in Europe, the Middle East, and Asia are setting up a longer-term supply-demand imbalance of around 10 million pounds to a number far greater within 10 years, perfectly timed to coincide with Madaouela’s anticipated start-up. Daniel Major and Brigi Rafini Niger Prime Minister www.thecse.com | 7
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 1 - 2015
Team at first drill rig site
Indeed, GoviEx’s project has quoted an average grade of 0.14% uranium oxide in all resources, which compares well to an average grade of 0.16% for all of uranium giant Cameco’s (TSE:CCO) projects and 0.07% for producer Paladin Energy (TSE:PDN). Developer Denison Mines (TSE:DML) currently has an average grade of 0.04%, mainly associated with its African projects, and Forsys Metals (TSE:FSY) has an even lower average grade at 0.02% . The company’s project lies in the heart of Niger, the world’s fourth largest uranium producing nation, with 50 years of uninterrupted uranium exports traveling on a highway that crosses GoviEx’s tenements. The region has been producing the commodity since the 1970s, with over 120,000 tonnes of uranium hailing out of Niger, which is extremely supportive and dependent on the uranium industry. Mining accounts for about 50 to 70 percent of the country’s export revenues. Amid this backdrop, a prefeasibility study at Madaouela revealed a net present value of $251.14 million at an 8 percent discount rate and an IRR of almost 22 percent, using a long-term uranium price of $70 per pound of uranium oxide. Total start-up capital costs were pegged at some $340 million, while cash operating costs were estimated at $26.39 per pound, below the current spot uranium price. 8 | www.thecse.com
“Our forecast cash costs are only marginally above ISR [in-situ recovery] projects, which is where very low cost producers would be,” Major explains. “GoviEx is in a strong position when the market does turn, and we’re ready to move into it.” Major, like many industry watchers, agrees the market will get “very tight” from a supply and demand point of view around 2020, amid the continued growth of nuclear construction around the world.
“
GoviEx is in a strong position when the market does turn, and we’re ready to move into it.
”
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 1 - 2015
Whether Japan’s nuclear reactors will come back on stream remains the single biggest variant for uranium supply and demand, but the CEO is confident that after the first one comes, the rest will be relatively easy, providing a clear path for future Japanese reactors to come back online. Two Sendai reactors in Japan are expected to come on-line in 2015, which is expected to ease fears and alleviate some of the psychological pressures that have been plaguing the market since Fukushima. While many have cut new projects or suspended existing ones awaiting a uranium price revival, GoviEx has already completed most of the heavy lifting for Madaouela, with the company able to wait patiently for banks to come around. “Banks need to be comfortable for companies to be able to raise debt for [uranium] projects, and they’re going to want to see high prices in order to be comfortable. New projects will be squeezed until the price is a in a position to support the bank funding to go with them, but we are in a stronger position then the companies trying to come up behind that.”
“
While Major believes that uranium prices have hit bottom, he says that uranium equities are still 20 to 30 percent lower than this, with nowhere to go but up. “There is a lot of potential in this particular commodity driven by power generation, particularly in China. “There aren’t economic drivers. There are real fundamentals driving [uranium]. It is slightly out of the normal commodities cycle,” he adds. Though the majority of uranium companies have struggled since 2011 in terms of raising capital, GoviEx had no such trouble, and is backed by some premium names in the industry. GoviEx was a private company from 2007 until June of this year, and raised over $100 million during this period. Just a year after Fukushima in 2012, Toshiba Corp, which owns one of the largest producers of nuclear reactors in the world, invested in GoviEx through a $40 million strategic financing and offtake agreement. Toshiba, which can purchase up to 600,000 pounds of uranium from Madaouela over 14 years, now owns 19.4 percent of the company, while Cameco and Semafo Energy each hold about an 8 percent stake.
GoviEx controls about 1,596 square km of uranium mineralization...
”
www.thecse.com | 9
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 1 - 2015
Chairman Govind Friedland, son of major mining tycoon Robert Friedland, holds 20 percent of GoviEx, with mostly institutional shareholders owning the remainder. Clearly, the company’s project has inspired confidence. The flagship asset is expected to produce an average of 2.53 million pounds per year of uranium over an 18 year mine life, and while this represents a small piece of the current market, there is “massive upside”, says Major. “We’re only focused on one of the licenses we’ve got. All our licenses are contiguous and all contain uranium,” he explains. GoviEx controls about 1,596 square km of uranium mineralization, consisting of seven adjoining land tenements in Niger, known as Madaouela I through IV, AnouMelle, Agaliouk and Eralrar, on which they have applications. “The sheer scale and potential upside are real trigger points for us.” The company’s chief executive boasts that with total current resources of 122 million pounds, it holds the third largest resource of a uranium developer, beating out Toro Energy, UEX (TSE:UEX), Berkeley Resources and Laramide Resources (TSE:LAM), among many others. Once GoviEx moves into the next stage of the project, permitting, construction and financing arrangements will follow, which is when it will begin to reach out to more end users.
If the company starts construction on target in 2017, it expects the asset to come into production by late 2019 or early 2020, just when analysts are forecasting the supply and demand gap to widen. The mining license application process for Madaouela is anticipated to take about six months, compared to multiple years for permitting uranium projects elsewhere, especially in Canada. The junior developer doesn’t expect any issues with progressing the project, as Major says the company has worked to achieve success through local investment. Since 2007, GoviEx has invested over US$100 million in Niger, completing more than 600,000 metres of drilling, all with the use of a Nigerien drilling contractor. Further, 100 percent of its in-country leadership positions are occupied by locals, and during the pre-feasibility study, it employed 500 Nigeriens. The company also maintains good working relationships with the country’s ministers and political leaders; the Nigerien President in his youth worked for Paris-based nuclear energy giant Areva. With $5 million in the bank currently, Major is encouraged by GoviEx’s development plan. “Unlike a lot of our peers, we don’t have to drill. We’ve already done the majority of the technical work. “We’re in a perfect position to get into construction when the market is ready for us. It won’t take a lot to get us there,” he affirms. n Originally published November, 2014, revision January, 2015.
10 | www.thecse.com
New resource frontiers in BC may ease hurt from falling oil prices
company profile
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 1 - 2015
MGX Minerals hints at secondary manufacturing base of magnesium oxide by Christian Vakenti
“N
ever again will we see $100 a barrel oil,” stated Saudi billionaire businessman Prince Alwaleed bin Talal in an interview with USA Today. For consumers, particularly commuters who‘ve seen their paychecks stretch forcibly to accommodate gas prices up to $1.50 per liter, the rapidly falling prices at the pump are a welcome relief as the cost of getting around town and to and from work plummets south of .99 cents per liter. To the rest of the country, whose loonie is often called “the petrodollar” because of how closely it‘s foreign value is tied to oil, a long term drop in the price per barrel spells disaster for burgeoning industries such as shale gas and tar sands. The jobs lost when oil companies shut down are simply the first in a long line of secondary and spin-off industries whose pain is felt across several boundaries as the effect ripples out. Which is why it‘s more important than ever for western provinces who‘ve enjoyed significant and historic resource based revenue streams to encourage new and innovative approaches to broadening our economic portfolio by developing new industry.
“
Enter MGX Minerals, Inc. (CSE:XMG) and CEO Jared Lazerson. MGX is a diversified Canadian mining company engaged in the acquisition and development of industrial mineral deposits in western Canada that offer near-term production potential, minimal barriers to entry and low initial capital expenditures. “The development of a magnesite quarry for the purpose of producing magnesium oxide would open up significant business and employment opportunities in the sale and production of both basic magnesium oxide refractory materials as well as more advanced and value added products,“ says Jared. This is precisely the kind of forward thinking message that have the finance and employment ministries salivating when they hear it. New industry brings a host of added benefits to the Province, including high paying jobs, secondary spin-off manufacturing, resource infrastructure, increases to traffic at ports and railways and of course, tax revenue. “MGX believes that the development of Driftwood Magnesium represents a cornerstone in the building of a new advanced materials industry in the Province of British Columbia,” says Jared.
‘Never again will we see $100 a barrel oil.’ - Saudi billionaire businessman Prince Alwaleed bin Talal.
”
www.thecse.com | 11
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 1 - 2015
The latest assay report from MGX comes from the recently completed diamond drill program at its flagship Driftwood Creek magnesium deposit located in southeastern British Columbia. Eight drill holes were completed over the Eastern Zone of the deposit and all ended in magnesite mineralization, which was observed to a depth of 57 meters, and suggests the zone remains open at depth. Seven of the eight drill holes were spaced within 30 meters of each other and will provide a high degree of certainty for the upcoming N.I. 43101 compliant resource estimate. “The results look very encouraging,” says Vice President of Exploration and non-independent Qualified Person Andris Kikauka. “The relatively high silicon dioxide content can be removed by flotation process and other compounds of interest approach the specifications required for producing calcined or dead-burned magnesite that are suitable materials for export markets.”
“
‘The development of...magnesium oxide would open up significant... opportunities in the sale and production of both basic magnesium oxide refractory materials as well as more advanced and value added products.’ — Jared lazerson, CEO MXG Minerals
”
12 | www.thecse.com
By relatively high silicon dioxide content, Andris means greater than 5%. The other compounds of interest he‘s referring to are magnesium oxide, calcium oxide and iron oxide. Magnesite in its purest form is 47.6% Magnesium Oxide (MgO). Magnesite generally serves as an excellent feedstock for the production of MgO and in turn is a valuable and widely used industrial mineral. Uses of MgO include abrasives, animal feed supplements, chemicals, coatings, construction, electrical, fertilizers, foundries, glass manufacture, insulation, lubricating oils, pharmaceuticals, plastics manufacture, refractory and ceramics, rubber compounding, steel industry, sugar refining, sulfite wood pulping, and wastewater treatment. According to CEO of MGX, Jared Lazerson, at this time MGX is focused on the refractory and steel industries. “MGX continues to take tangible steps towards rapidly moving from exploration to development at Driftwood Magnesium,” stated Jared. When business closes one door, it opens another. As the heyday of our oil-based revenue streams begin to close off, it will be the Jared Lazerson‘s and the magnesium oxides of our country that pick up the slack and open new doors. For more info, visit www.mgxminerals.com. n Originally published January, 2015.
company profile
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 1 - 2015
Past producer gets a strategic overhaul in Quebec
Renforth Resources resurrects former Thompson-Cadillac mine by Christian Vakenti
I
f it‘s true that a rose by any other name would smell as sweet, then it also follows that a gold mine shines just as bright even though the moniker may change. Such is the case with the historical ThompsonCadillac mine located on the Cadillac Break outside of Rouyn, Quebec. Renamed and reinvigorated by Renforth Resources, the New Alger project purports an inferred resource of 237,000 ounces of gold above a depth of 200 metres contained in 3,505,000 tonnes with a grade of 2.1g/t Au using a cut-off of 0.75 g/t Au. Under the helm of Nicole Brewster, President and CEO, Renforth has managed to acquire the property, target it‘s resources and return significant assay results. Well situated (the regional highway runs right through the middle of the property), New Alger benefits from a local specialized labour pool and boasts some successful neighbours: the property is contiguous to Agnico Eagle‘s LaRonde mine and Radisson‘s former O‘Brien mine, both exceptionally deep mines. The property is also bisected by the Break (the Cadillac Break runs from val D‘or to Timmins and is likely the most prolific gold structure in Canada). On the western end of the Cadillac break, this fault stretches across Northern Quebec and Ontario, hosting about 40 deposits which have produced over 60 million ounces of gold since the early 20th century.
“
...sitting at surface... with numerous producing mines...will attract attention...
”
“Mines are found in the shadows of head-frames,” states Nicole. “Renforth sits in the shadow of many.” Adjacent to the east is the O’Brien Mine. The O’Brien Mine, discovered in 1924, has produced more than 600,000 oz Au, the bulk of it at a grade of 0.47 oz “Renforth is excited to have the opportunity to again drill on the Thompson-Cadillac Mine deposit at our New Alger Project outside of Cadillac, Quebec,” Nicole Brewster told The Prospector. “We will drill several shallow holes which are targeting areas with our surface deposit model that have no data, no drilling to date. If we successfully intersect the modeled vein systems we will be extending our deposit and adding to our resource. To date every hole Renforth has drilled into this deposit has returned gold assays, we look forward to continuing our record of successful drilling.“ www.thecse.com | 13
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 1 - 2015
Moving forward, Nicole has begun accomplishing her strategic overhaul by resuming a drill program, targeting data gaps at surface within their >2g/t surface gold resource. In addition, they‘ve recently announced assays from the Pontiac Vein extension campaign, which includes 11.6 g/t Au over 0.5m. Assay results received from the 10 channels cut demonstrate the continuity of gold in the vein system, in addition, a nugget effect within the mineralization due to coarse gold was observed by the laboratory. “We are pleased to have again confirmed, and extended at surface, the gold bearing occurrence to the south of the Thompson-Cadillac Mine area. This occurrence, now measuring half a kilometer on surface, warrants additional attention. Renforth is presently compiling all of the available property information, which includes previous drill results that we can now tie into the Pontiac Vein System, as well as records regarding the historic underground development in the area, existing geophysical and geological records, as well as our own field and regional observations. In short, this is becoming a quite interesting second opportunity on the New Alger property,” said Nicole.
“The job before me now is to keep exploring as I can raise capital, consistently adding ounces to the property,“ says Nicole. “At some point our resource, sitting at surface in an incredible logistical position beside the highway, in the midst of a specialized labour pool, with numerous producing mines and idle mills as neighbours, will attract attention.” For more info, visit: www.renforthresources.ca n Originally published January, 2015.
14 | www.thecse.com
company profile
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 1 - 2015
CopperBank aims to become unique depository of established copper assets by Deborah Bacal
C
opperBank Resources Corp (CSE:CBK) sees itself as a transactional depository of established copper projects, distinguishing itself from other mining developers with its culture of “owneroperators” and low burn rate business model. The company, which listed on the Canadian Securities Exchange in November after acquiring the assets of two subsidiaries, is geared for maximum optionality to moves in the copper price on a per pound basis, according to executive chairman Gianni Kovacevic, who has a background in electrical studies and recently published a novel on smart investing in green energy. “The kind of company me and my investors wanted to have exposure to did not exist, so we created something for ourselves and for the market in general. You can look at us as an aggregator of copper projects or pounds in the ground, if you will,” says Kovacevic, the author of “My Electrician Drives a Porsche?” CopperBank has plans to be aggressive in 2015, with several projects already under consideration for accretive inventory additions. It has about $800,000 in cash, but Kovacevic says most of the company’s costs for 2015 are already sunk. The current bank balance takes the company well into 2016. “We don’t have a conventional office as most of our team already has existing arrangements; we’re very lean. The only major expense is our annual lease payments for our projects, which are modest,” he explains, adding that no additional capital will be required until the middle of next year, and even then it will be modest.
The company owns two flagship assets at the moment, with the 100 percent owned Contact project in northeastern Nevada and the Pyramid property in Alaska, where it has the option to also earn a 100 percent interest. Gianni Kovacevic
“
It’s a very special type of deposit that has a far lower capital intensity requirement to put into production.
”
www.thecse.com | 15
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 1 - 2015
Contact is a fully engineered project, with about $15 million spent already to bring it to its advanced stage. It has about 1.23 billion pounds of copper in the measured and indicated category, with another 393 million pounds of inferred resources. “There are no work commitments or obligations there, but it remains open to exploration,” says Copper Bank’s executive chairman. A pre-feasibility study, which was released in late 2013, showed a project that produces 49 million pounds of copper per year, with an after-tax net present value of $76 million and an IRR of 21 percent using a copper price of $3.05 per pound. At a copper price of $3.20 per pound, NPV jumps to $107 million and IRR rises to 25.9 percent. Total initial capital was pegged at $189 million. “We feel there could be engineering enhancements as well,” adds Kovacevic.
Pyramid Project Looking Southwest
16 | www.thecse.com
For the moment though, CopperBank’s plans are to keep the project “in good standing” and look internally at further enhancing the “already favourable” engineering and metallurgy, meaning the review would be completed at little cost to the company — quite a benefit in the current commodity price environment. “All the pounds are leachable, which means lower capex and opex as copper cathode would be produced on site. It’s a very special type of deposit that has a far lower capital intensity requirement to put into production.” At Contact, ore would be crushed in a two-stage process, and then heap leached with sulfuric acid solution. Copper would then be recovered in a solvent extraction-electrowinning plant to produce copper cathodes on site, with metallurgy indicating modest acid consumption of 17 lbs per tonne and a recovery rate of approximately 76 percent.
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 1 - 2015
Meanwhile, CopperBank’s Pyramid project in Alaska is at an earlier stage of development, and the company would entertain a joint venture opportunity to conduct additional work. The property is located on Native-owned lands on the Aleutian islands of Alaska, a region that represents a classic “island-arc volcanic setting” that is prospective for both epithermal gold and porphyry coppergold systems, said CopperBank. The project has an inferred NI 43101 compliant resource of 1.34 billion pounds of copper, 74 million pounds of molybdenum and some 488,000 ounces of gold. The resource is dated as of May 2013, and is based on the drilling conducted by Antofagasta (one of CopperBank’s shareholders) in 2011 and 2012. “This is an exciting delineation play,” says Kovacevic, who adds that the San Diego Bay prospect, which sits just 7 km east of Pyramid, is the largest geological anomaly that CopperBank’s CEO Robert McLeod has ever seen in his mining career, at 60 square km. “We’re looking to joint venture [the property] to enhance and increase the size and confidence of the resource, following up on the first two rounds of successful drilling.” Kovacevic, who is one of the largest single shareholders of CopperBank, says he is looking to increase his position in the company, as it continues to aggressively seek accretive inventory additions and/or projects that could offer shareholders “cost-free” exploration opportunities. Given his significant holding, Kovacevic is mindful of adding assets that are not very accretive to current shareholders, and his desire to increase his stake demonstrates his confidence in an overall alignment with the company’s goals. Despite the recent slump in copper prices, Kovacevic remains positive on the metal. “Oil is energy; energy without fossil fuels is electricity and electricity demands copper.” He sees a supply deficit in the market happening in the next few years, as “major producers do not have an incentive to build production beyond 2017/2018 unless the copper price is significantly higher.” “The market will continue to be very tight, and it could surprise people how tight it will be,” Kovacevic opines.
Shack on Contact project
Demand, however, is reliable, says the chairman, with continued strength from China seen even in 2014. “I don’t see a situation where we wouldn’t have demand growth on a global scale,” he explains. Kovacevic is not alone in his view, with Morgan Stanley also finding favour in the red metal, in spite of a 6 percent correction last week. The investment bank said there was no evidence of impaired trade or a collapse in demand, and therefore remains bullish on the copper outlook, citing copper fundamentals that are largely unchanged. Like Kovacevic, Morgan says there is a modest surplus at the moment, but sees the market moving into a deficit, which will likely shore up prices. There is not enough new supply coming to the market to satisfy even flat demand growth, according to the analysts. Copper prices have been dragged down by oil, a commodity which was the victim of a 50 percent collapse in 2014. But Morgan Stanley, and others that are seeking to buy copper on the cheap, remain optimistic on the metal, which is used as a conductor of heat and electricity, as well as a building material and as a constituent of various metal alloys. The investment bank reiterated its copper price forecast of $7,049 a tonne by the end of the year, with expectations for an “oil-led” price recovery. Copper is currently trading around $5,727.50 a tonne on the London Metals Exchange. With copper prices where they are, the metal’s strong fundamentals mean the time could not be more perfect for CopperBank to acquire value-add copper assets from juniors that are struggling to stay afloat, positioning the company for success as soon as prices revive. n Originally published January, 2015.
www.thecse.com | 17
company profile
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 1 - 2015
Pivotal says 2015 will be a big year with national presence, drug filing on the horizon
P
by Deborah Bacal
ivotal Therapeutics, Inc. (CSE:PVO) (OTCQX:PVTTF) is coming off a year of strong growth and is looking to an exciting 2015 in terms of the expansion of its sales efforts for its Omega-3 therapy and new marketing partnerships. In the fourth quarter, the company saw a 47 percent year-over-year increase in sales of its prescription-only Vascazen medical food product, which was developed to lower cardiovascular health risks in Omega-3 deficient cardiac patients. The 90 percent pure product, which was introduced in the U.S. in November 2011, provides those suffering from heart disease with levels of the most important Omega-3 fatty acids in fish oil — EPA and DHA —that the company says cannot be achieved through simple changes in diet alone. A published study of 110 patients showed that Vascazen substantially lowered triglycerides, which are fatty substances in the blood, as well as improved entire lipid profiles. Lipid profiles are an entire panel of blood tests that serve as an initial broad medical screening tool for abnormalities in lipids, such as cholesterol and triglycerides. Vascazen is now available with a prescription in all major pharmacies throughout the U.S., with Pivotal devising a two-phase commercialization plan. The first phase was a pilot study testing awareness of the product in three U.S. states, with the second phase being a national expansion, a stage in which it is currently looking to flourish. 18 | www.thecse.com
“We are actually having scripts written in 37 states in the U.S., predominately in states where we currently have no sales representation,” says President and Chief Operating Officer, Rachelle MacSweeney, who attributes this to the company’s strong marketing and investor relations campaign. “We want to drum up sales better in those states, where we have received very positive feedback so far,” she adds. To build up its in-house sales force, the company is seeking to complete a financing and find a comarketing partner with a national presence, which is calling on similar practitioners that Pivotal is looking to attract.
“
The Omega-3 company has also made significant headway with its intellectual property...
”
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 1 - 2015
The Omega-3 company has also made significant headway with its intellectual property recently, receiving a number of issued patents and patent allowances in the past year, opening up the door for further uses of its product and potential licensing deals. Last May, it was issued a US patent for its unique Vascazen formulation in combination with antiobesity drugs to reduce body weight in patients with heart disease, and diabetics. This was followed by the notification for two patent allowances in October: one is to combine its Vascazen product with a statin therapy, which is used to reduce cholesterol, and another is to combine Vascazen with a cholesterol absorption inhibitor. The company has a total of eight patent applications, of which one has been issued and two allowed so far. Several more patent allowances are anticipated in 2015, according to MacSweeney. These patents could open a window of opportunity for Pivotal, as big pharma companies seek potential licensing deals to extend their current anti-obesity and cholesterol-reducing drug pipelines. “A lot of obesity drugs make people depressed. But Omega 3s are known to stimulate a more positive mood,” says the COO.
Pivotal has also been building its own product portfolio with the development of Omazen, the company’s second product to market, which is distributed exclusively in Canada and is positioned for the professional over-the-counter Rachelle MacSweeney, President market. and Chief Operating Officer The target market is the result of Omega-3 therapies not being recognized as a drug in Canada, but rather purely as nutraceutical, over-the-counter products. Its third product is called BeneFishial, and was also created as part of Pivotal’s new nutraceutical line, for prenatal, child, heart health, and AgeRelated Macular Degeneration (AMD) applications in mind. Whereas Omazen is geared more for the professional market like private healthcare clinics, BeneFishial is targeted for the retail, or direct-toconsumer, side of the healthcare industry, in both the US and Canada. With the highest content of Omega-3 fatty acids of any other over-the-counter product on the market, it is specifically formulated to give the highest antiinflammatory properties and the best therapeutic effect for a healthy body and mind, says Pivotal. Meanwhile, the company also has in the makings its first drug candidate, called PVT-100, which is designed to stabilize vulnerable plaque in patients undergoing carotid endarterectomy (an operation which removes the inner lining of your carotid artery if it has become thickened or damaged).
www.thecse.com | 19
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 1 - 2015
A phase 2a trial for the product was cleared by regulatory authorities in France in December, with the double-blind, placebocontrolled study to test over 100 patients scheduled to undergo vascular intensive surgery for the disease at the University of Strasbourg, France. Subjects will be randomized to receive either Pivotal’s PVT100, or placebo, for six straight weeks. Preliminary results are anticipated later this year. “This opens up a lot of doors for us,” affirms MacSweeney, referring to the potential to commercialize the product in Europe. “We anticipate the results will be very favourable.” The company’s Chief Operating Officer also noted that positive results could lead to Pivotal seeking approval from the FDA in the US to complete a similar phase 2 trial. All of Pivotal’s products are based on its high purity, Omega-3 formulation and unique EPA to DHA ratio, but are targeted for different populations, from those suffering from heart disease to diabetics, and even pregnant women. Omega 3s are widely known to result in improved blood flow, reduced inflammation, and have positive effects on lipid metabolism. Pivotal’s other main attraction this year is its plan to develop a point-of-care diagnostic test designed to help doctors easily identify patients that are Omega-3 deficient in their offices, clinics and even pharmacies. The technology will seek to simplify the current practice of determining the Omega-Score and Omega-Index, which measure the amount of Omega-3 fatty acids in the blood. Currently, doctors have to collect blood samples and send away to the lab for results, which is not only costly, but also time-consuming. Pivotal’s test will act as a companion diagnostic to assist with Vascazen treatment monitoring, said the company, which is targeting to submit a 510(k) application to the FDA in the latter part of 2015 or early 2016. It is hoped that Pivotal will have a prototype of the rapid format test in hand by this spring.
20 | www.thecse.com
This is not an unreasonable timeline for a company like Pivotal, which counts Dr. George Jackowski as its Chief Scientific Officer – the man credited for the development of the rapid format cardiac blood test – the current standard of care for triaging patients presented to the emergency room with chest pain. Dr. Jackowski was awarded the Diamond Jubilee Medal that was presented by Canadian Prime Minister Stephen Harper two years ago for his contributions to the Canadian biotech and pharmaceutical industries. MacSweeney says that the prototype and the 510(k) application for the point-of-care diagnostic test will be a stand-out milestone for investors this year, as will preliminary results from its PVT-100 clinical trial in France, which is no doubt expected to drum up analyst coverage for the company. In the meantime, Pivotal is seeking to raise in the range of $7 to $10 million to achieve its goals, keeping the door open to a number of options, including equity, convertible debentures or various licensing and co-marketing deals. “The financing will help us move and implement the next stage of our commercialization strategy for Vascazen, to have a national presence,” explains the COO. “We will keep investors interested in the company, and hopefully, our stock will start to reflect what has been accomplished.” n
BioMark brings new life to cancer detection technology
company profile
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 1 - 2015
by Deborah Bacal
B
ioMark Diagnostics, Inc. (CSE:BUX) has in its hands a diagnostic test that can detect cancer at an early stage, disrupting the current diagnostic market for the disease as we know it and making it easier for both patients and doctors alike. The metabolomics-based test consists of a single, one-shot application of Amantadine, a drug which is already approved in both the US and Canada, after which a urine sample is collected two to four hours later and then analyzed. The non-invasive test, using a sophisticated LC-MS machine, is screening for high levels of the acetylated form of the drug. The acetylation is performed by an enzyme, known as SSAT, which has been proven to be present in elevated levels in many cancers including lung, breast, prostate, melanoma and gastrointestinal tract. “This enzyme is always present in all mammalian cells. The difference is that cancer patients have a higher proportion of the enzyme than healthy subjects,” says Chief Executive Officer Rashid Ahmed. The company has validated its work with various clinical trials, as well as with literature published at
the National Cancer Institute and other leading scientific publications. “[The test] could work for many kinds of cancers,” explains Ahmed, “but we are specifically looking at cancers that have the most significant impact on the most patients. SSAT is highly up-regulated in breast, lung, GI and prostate cancers.” In tumor cells, SSAT Rashid Ahmed, CEO is “upregulated”, the process by which there is a cellular increase in the number of receptors to a molecular stimulus. Ahmed was drawn to the technology, which has its origins in a Canadian university, from his own life experience, as his sister was diagnosed with cervical cancer in 2006 at a very late stage and was given just six months to live — an event which he calls a “turning point” in his life. According to recent stats, some 90 percent of cancers are curable if caught early. He says lung cancer is a special area of focus for BioMark, given that the disease is often diagnosed at a stage that is too late for any promising chance of recovery. The idea behind the test is to allow doctors to screen high risk patients such as smokers and ex smokers, bringing them to the front of the line and saving hospitals both time and money. In North America, there are over 95 million smokers and ex smokers. “A low dose CT scan costs around $1,000 in North America and it takes up a physician’s time, nurse time and set-up time. Our test could help narrow down the people who might benefit most from CT scanning or even be complementary to populationbased screening recommendations.
Elisa Kit
www.thecse.com | 21
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 1 - 2015
“As well in many places around the world, CT scans are scarce.” Phase 3 trials are already underway in Manitoba, Canada and in Bangladesh, with Ahmed saying he is looking to go into the US and China as well, areas with bigger populations where it is easier to attract patients. The company has some 200 patients enrolled in Bangladesh, and 140 in Canada, with plans to extend the trials by about 500 subjects down the road on an ongoing basis. Once the company has results in hand, expected this year, the plan is to bring the data to Health Canada and the US FDA to attain formal approvals. BioMark’s diagnostic technology was initially licensed from the University of Manitoba as single patent, which has already been expanded to include other detection technologies within its area of interest. After receiving its investigational testing authorization (ITA) from Health Canada, the company has the authorization to provide its test to sites like LifeLabs, which has 280 patient care centres across Canada. “It’s easy for them to work with us. We provide a package and once patients go to LifeLabs to do the test, the urine is sent off for analysis using our internal standards that we have developed,” says BioMark’s CEO. Another market for the diagnostic test is a pointof-care system targeting existing cancer survivors, with some 15 million estimated across North America currently. BioMark’s test may allow cancer survivors to screen for the disease affordably in their homes, providing them with immediate monitoring capabilities. The concept would turn the idea of early detection on its head, essentially empowering an individual’s ability to detect cancer at home and seek earlier intervention. “Recurrence happens quite frequently with cancer and the first five years are critical,” explains Ahmed. “Once patients see an increase in the enzyme, the red flag info can be transported directly to the doctor,” he added. BioMark, says the CEO, is the only company using a therapeutic agent for diagnostic indication, acting as a smart probe that is “very selective to the tumor.” “Once this enzyme is in your body, it circulates back and forth. It doesn’t recycle. It’s a real clear signal.” The chief executive officer reckons that the pointof-care system could be worth a few hundred million to a billion dollars depending on how many tests a patient performs. 22 | www.thecse.com
The third potential market for BioMark is to analyze the SSAT enzyme levels to determine the specific cancer type. By combining its unique urinebased system with sophisticated data analysis, BioMark will develop a general cancer screening tool to enable the early detection of specific types of cancers. “We are strategically working with the right medical institutions, incorporating the right patients into our study and working with lab companies that have the infrastructure to deploy our tests. We are making sure we are at the forefront, and transparent with regulators,” affirms Ahmed. Indeed, the company has strategic collaborations with five universities in Canada, as well as relationships in China, Malaysia, Bangladesh and the US, including University of Maryland. BioMark says that not only is its technology cost effective, but it is also non-invasive, reproducible and easy to use. The company is looking forward to a number of milestones in 2015, including a listing of its stock on the OTCQB, the increase of its clinical trial sample size and the completion of its point of care (PoC) kits and applications. This is on top of the continued development of its strategic partnerships in the US and internationally. “We want to demonstrate to US investors that we are really a North American company, not just Canadian,” says Ahmed. BioMark is already generating revenues from its technology, selling some of its systems late last year to a company in the US involved with biophotonics, which can be described as the development and application of optical techniques, particularly imaging, to the study of biological molecules, cells and tissue. The company will capitalize on this application and present its technology at an industry conference in San Francisco, where it hopes to pick up more buyers. “If researchers like it, this moves us into the lab and once we have a user base, it will be much easier to move into the mainstream. We will keep pushing for revenue generation, collaborate with strategic partners and build new distribution agreements around the world.” With $250,000 in the bank, $750,000 in proceeds to close shortly from a financing round, and another $3 million to $5 million expected within the next four months, the company is well positioned to advance its commercialization strategies and deliver on an exciting 2015. n
company profile
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 1 - 2015
Fundamental Applications aims to disrupt app space with vision, clever marketing by Peter Murray
“B
uild it and they will come” is one of the most dangerous beliefs for a young business, even if your sector is one people around the world use 50 billion times each day. If you want to pry users from the likes of recent Facebook acquisition WhatsApp, Line and established online goods marketplaces, or even just share some of them, you had better have a gameplan that is watertight. Fundamental Applications Corp. (CSE:FUN) is confident it has such a plan, plus an evolving suite of products featuring enough differentiation to both attract users quickly and remain “sticky” – in other words, hold onto those users and grow with them as they themselves evolve.
Fundamental’s first product, in what president and chief executive officer Justin Rasekh intends to build into a diversified “stable” of mobile applications, is an app for group chatting in an anonymous setting. Dubbed Serum, the product’s name is a play on “truth serum” and this reflects the feature it provides that most other chat apps cannot – a protected environment where users can voice sincere opinions, unhindered by concern that someone might not like what they say. Given how Serum got its name, the press release Fundamental issued on January 20 has serendipity written all over it. The release discusses a nonbinding Letter of Intent that would see the company acquire Foro Technologies Inc., in part to combine Foro’s main app with Serum.
www.thecse.com | 23
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 1 - 2015
The name of Foro’s app? Truth. Truth was voted one of the Top 100 Social Messaging apps in Apple’s iTunes’s store for 2014 and has over 130,000 users. Fundamental and its new teammate would set to work creating Truth 2.0, combining the best of Serum and Truth to come up with the ultimate in privacy-oriented chat applications. Both applications are based on the concept of communicating in a defined group – in this case, members of the contact list in a user’s phone – but being able to convey your true thoughts because the identities of those participating in the chat are not revealed. Each participant is assigned an icon so everyone can keep track of who is saying what, but nobody knows who is behind any of the icons – not even the manager of the chat thread. “How it all started was a group of our friends were chatting about breaking up with their boyfriends and relationships, and they looked over to us and were asking us questions about it,” explains Fundamental Applications director and Serum cofounder Julian Ing. “I said to Justin that there should be an app that allows them to chat with each other but where they can get honest feedback. ‘Should I break up with Dave? No, Dave’s a really nice guy.’ The real answer is ‘Dave was hitting on me last week’, but of course a friend is too afraid to say that.”
24 | www.thecse.com
“
Truth was voted one of the Top 100 Social Messaging apps in Apple’s iTune’s store for 2014...
”
Thinking outside the box on user acquisition
As much as vision and technology define the corporate DNA at Fundamental, so does a healthy respect for marketing. “Anyone can make a mobile app, but how many people can make a great mobile app,” begins Ing in explaining the strategic thinking behind the product and company. “That is a smaller segment but they can still get made. Right after that is how you go about getting critical mass, and I think that is the most important thing we think about aside from great technology -- how do we achieve critical mass?” Ing previously founded companies in the online advertising and gaming sectors, so he knows a thing or two about attracting Internet users and sending them in his preferred direction. Rasekh brings a set of marketing skills to the table complementary to Ing’s. His career in software sales, investment banking and investor relations, not to mention his highend Hollywood connections, is directly reflected in the marketing plan for the coming year. “You are going to see a rollout with placement on an NBC primetime show where they use our chat app as a tool for detectives so people can give clues anonymously,” says Rasekh. “We also are teaming up with several popular fashion and lifestyle blogs. They are going to focus on using the app in everyday life, for anti-bullying and other positive activities.”
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 1 - 2015
Justin Rasekh
Julian Ing
Once the business combination is complete, the combined entity plans to roll out a new, more feature-rich version of Truth in the first half of 2015. Initial availability will be on the Apple iOS platform, followed soon after by a version for Android phones. Rasekh is keeping user acquisition targets for Truth 2.0 internal for the time being, but the objective is to quickly become one of the larger players in the anonymous chat space.
Foro marketplace app designed for convenience, safety
Also part of the Foro acquisition is an app that makes it easy and safe for students and others in defined settings to market items they no longer need. The app is named Foro and was conceptualized following attacks that occurred against students after they had replied to advertisements for goods online. Foro makes the buying and selling process safer in a number of ways, one of these being a requirement for poster and potential buyer to have a login at a recognizable location, such as a university. It also requires that the poster of the ad have taken the picture of their item with the device they use to place the ad, thus reducing the possibility of fraudulent postings. And if one is active on Facebook, the app will indicate the number of mutual friends the poster and potential buyer have, adding yet one more level of security.
For students looking to sell textbooks, bikes, furniture or other items, it is a way to put goods online and have some degree of comfort as to who is contacting them to come and have a look. For a buyer the same holds true – they have reasonable certainty that the products offered are real, as is the person who posted the advertisement.
Monetization and beyond
It might come as a surprise to learn that some of the mobile apps attracting multi-billion dollar valuations over the past couple of years do not generate revenue. At some point, however, each of these will have to prove their financial worth or be assigned to the dustbin of tech sector failures. Rasekh and Ing have already figured out how to monetize Fundamental’s chat app, but understand that to move too soon would be a mistake. For now, the focus is on achieving a user base that positions the product to be a major and lasting player in its space. When the time comes, monetization is expected to be akin to pulling a lever. “I think we are in the age now where a lot of third parties are helping automate that,” says Ing. “And there are lots of value-added features we want to add later on, such as digital sticker packs.” Monetization of Foro will come a lot sooner, as the app contains its own transaction engine to facilitate payment. Because it retains a small percentage of the value of each transaction, as soon as sales roll in, monetization begins. Anonymous chat and marketplace are segments where apps can catch on quickly if they offer superior utility to users. But they aren’t the only segments where opportunity abounds, and reflecting this Rasekh and his team are considering new apps in fields such as music and health. “Fundamental Applications is a company that is constantly looking for cutting-edge apps and people to work with. We don’t want to be a onetrick pony,” says Rasekh. “We want to always be advancing, always growing.” n Originally published December, 2014. Revision January, 2015.
www.thecse.com | 25
company profile
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 1 - 2015
UpSnap expands by bringing its targeted mobile advertising to small business owners
U
by Deborah Bacal
pSnap, Inc. (CSE:UP) has found a fast and simple way for companies to monetize their products by providing targeted mobile advertising campaigns based on first-party data and real-time analytics, attracting loyal audiences for both big and small brands. The company’s technology has appealed to both large national customers and smaller businesses, where UpSnap’s CEO Bruce Howard, who came on board in March, sees a huge amount of upside. Back when User Friendly Media, which is also led by Howard, invested in UpSnap in February last year, 100 percent of its mobile ad business was comprised of big brands, whereas now these customers take up roughly 40 percent. The Chief Executive has been focused on expanding UpSnap’s legacy mobile advertising technology into the smaller business market in an effort to grow its recurring revenue. This is because larger brands pay a fee based on transaction performance, whereas smaller companies sign on with yearly contracts, bringing UpSnap a continuing stream of cash flow for that period. 26 | www.thecse.com
“The business has been growing much more rapidly in the small to medium sized customer set. It’s kind of new ground in this area, and we are running as fast as we can,” says Howard. While big brands are no strangers to mobile advertising, many smaller companies are still Bruce Howard, CEO looking to broaden their horizons in this area. Mobile ad spending is projected to hit $18 billion in 2014, and is estimated to rise to $42 billion by 2017, according to stats from Gartner. The market potential is huge, and undeniably warranted. Indeed, SearchEngineLand.com estimates that 90 percent of mobile searches lead to action, and 50 percent lead to purchase. “We knew the growth rate of mobile advertising. Nobody was bringing that to the small business owner and we wanted to take that offering that big box players had to the smaller brands, allowing them to communicate and monetize across mobile devices.”
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 1 - 2015
And that is exactly what UpSnap did. Since February, it has not only developed and executed on its product, but it has tallied a total of 15 reseller partnerships and 1,200 customers, with more than half of these being small to medium sized businesses. UpSnap’s unique offering is based on its proprietary analytics database, which has collected some 350 million data-rich consumer profiles using its telephony technology, with nearly 300 data attributes for each customer that allows it to select an ideal target audience for a mobile campaign. Campaigns can then be optimized based on real-time insights such as impression reports, the number of installs, clicks, phone calls and details of action such as type, data, time and location. Once a campaign goes live, UpSnap displays the mobile banner ad to customers that are near the business via related apps and websites. Targeting begins within a 5-mile radius, and expands outward based on traffic availability and the client’s desired radius. The company’s reach is currently at some 100 billion mobile impressions per month through relationships with direct publishers, ad network partnerships and integration with large exchanges. UpSnap calculates that for $200 a month, small to medium sized clients receive up to 40,000 banner impressions, as well as a monthly analytics report, a custom-designed banner ad and landing page, and strong calls to action featured on the ads such as “Tap to Call” or “Tap for Website”. The company’s service works differently for its two distinct sets of customers, as large national brands pay per call, or per action, as opposed to annual contracts. “We bring our data, place the mobile ads across sites and search engines, and deliver the audience they are looking for,” says Howard, referring to a specific example of Home Depot running a promotion on carpet installation. The ideal target audience here was people with an income of over $100,000 that have owned a home for at least 10 years. UpSnap gets paid each time “a call” is made on
the back of its mobile ad campaign, with certain specifications necessary, i.e. the call has to last for more than 1 minute. “It’s less dependable than our subscription model of revenues,” says Howard. The subscription model the CEO is referring to is for the small-to-medium sized businesses, which pay a monthly fee for a 1-2 year term. This is a significant advantage for a company in these beginning stages: UpSnap has recurring revenue for the term of the entire contract and the cash flow generated is not contingent on transaction performance as subscription clients are mostly concerned with exposure of their brand. Howard says these smaller businesses are primarily interested in location, specifically, how close a mobile user is to the company’s facility or store — an easy task with UpSnap’s location-based advertising. Their other main interest is when it is ideal for them to reach out to a new customer, based on information that shares the part of the day when their target audience is accessing a mobile device. Clearly, small businesses are catching on. In just 8 short months, the company’s growth rate in this area has been nothing short of spectacular. As of early September, it had acquired 850 subscription-based clients, compared to nil in 2013. It also had almost $1 million in operating revenue at the end of the third quarter, and it is aiming to break even sometime next year. Recurring revenue was just over 11 percent of total revenue in Q3, compared to 4.6 percent in the second quarter. While its focus is on North America right now, the company understands what is required to take its business internationally, meaning it is prepared to pounce when the time is right. Howard says UpSnap has cash visibility through the second quarter of next year. It also has solid backing from User Friendly Media, the private company that invested some $5 million in UpSnap in February, and is coincidentally, one of UpSnap’s largest customers. Aside from User Friendly, which owns a 40 percent stake in the company, UpSnap is held by a blend of retail and institutional investors across Canada and the US. Howard says investors can look forward to a bright 2015, with solid predictable cash flow going forward and new customer acquisition expected. “The rate at which we add new customers is directly related to how fast the company will be able to grow,” he says. So far, the outlook is excellent. n Originally published December, 2014.
www.thecse.com | 27
WANT TO GROW YOUR BUSINESS? Join over 240 companies who have accessed capital on the Canadian Securities Exchange.
Save time, lower costs and build a great company by listing on the CSE. Contact your regional listing development officer to find out how your company can benefit from listing on the CSE: TORONTO Rob Cook 416-367-7349 rob.cook@thecse.com
VANCOUVER James Black 778-383-7694 james.black@thecse.com
CALGARY Mark Francis 403-532-7870 mark.francis@thecse.com
MONTREAL Scott Pritchard 514-594-6848 scott.pritchard@thecse.com
thecse.com
|
@CSE_News
TRADE ONLINE?
There are now over 260 securities listed on the Canadian Securities Exchange, accessible for trading online through the following discount brokerages:
CIBC Investor’s Edge Credential Direct HSBC InvestDirect Laurentian Bank Discount Brokerage Questrade
thecse.com
|
@CSE_News
National Bank Direct Brokerage Qtrade Investor RBC Direct Investing Scotia iTRADE TD Direct Investing Virtual Brokers