CSE Quarterly 3 - 2015

Page 1

davidson new ad

Experts in Helping Entrepreneurs

Fulfill Their Audit, Tax, & Listing Requirements on the CSE


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. 3


Contents CSE | Quarterly Issue No. 3 - 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.


CEO’s Message

Feature Story 7 Lite Access Technologies shaking up broadband fibre world with fast, cost-efficient deployment by Jonathan Jones Company Profile 10 Canadian Metals: Ferrosilicon producer poised to enter steel alloy market by Christian Vakenti 12

Targeted Microwave Solutions harnesses microwave energy to revolutionize industrial material processing by Peter Murray


Robix’s one-of-a-kind oil spill clean-up vessel ready to make a splash by Deborah Bacal


IGEN Networks takes relationship between car and driver to a whole new level by Peter Murray

25 BioNeutra anticipating record year as new production facility expands line-up, opens markets by Jamie Ashcroft

www.thecse.com | @CSE_News Cover Photo: PIXSOUL MEDIA INC.

www.thecse.com | 5

THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 3

CEO’s Message


am pleased to introduce the third issue of the CSE Quarterly for 2015. Although markets around the world experienced a renewed bout of market volatility over the summer, CSE issuers continue to be active in the corporate finance market. As a group, companies are some $15 million ahead of last year’s pace in completed financings. We have welcomed 48 new issuers to the exchange so far this year, and will shortly welcome our 300th listed security. We also have a large pipeline of companies conditionally approved to list on the exchange, and applications that are under active review by our listings department. In short, although market conditions are undeniably challenging for all participants, the entrepreneurial energy of our community continues to shine through. One of the CSE’s principal goals for 2015 was to provide a greater number of opportunities for our issuers to understand and master the challenges associated with the public markets. Following on a successful inaugural event in Vancouver last fall, the exchange has hosted a series of “CSE Days” this year. In the next few weeks we have events scheduled in Toronto (September 21), New York City (October 7) and Vancouver (October 14). Not only do we programme engaging speakers on a variety of topics germane to companies managing their public markets opportunities, we also ensure that a broad representation of the local corporate finance, trading and advisory community (accounting, legal and investor relations) is on hand to learn more about the entrepreneurs who have chosen to list on the CSE. I encourage readers to contact their CSE representative to arrange for attendance at one or more of these events. Of course, we recognize that technology is rapidly bringing international markets and investors together in so many different ways. To that end, this fall we will continue to strengthen our partnerships with large US marketplaces, including the OTC Markets Group and NASDAQ to leverage their industry leading service offerings for our listed issuers. Outside of North America, we’re also continuing to deepen our relationships with European, Asian and South American marketplaces to expand the access of our listed issuers to international investors, and to introduce the benefits of a CSE listing to international companies. The CSE will continue to grow only if the companies on our exchange continue to be successful. Please take a moment to learn about a number of our recently listed companies, and how they plan to grow their businesses on The Exchange for Entrepreneurs.

...we will continue to strengthen our partnerships...


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. 3

Lite Access Technologies shaking up broadband fibre world with fast, cost-efficient deployment By Jonathan Jones


nless you know a lot about broadband infrastructure, Lite Access Technologies (CSE:LTE) is not a company you will have heard of. But according to Co-founder and Chief Technical Officer (CTO) Michael Plotnikoff, you will soon. “It will be something where everybody will be sitting back going ‘Oh my God, did you see that company go wild this year?’” And that will only be the start, he reckons. For those not clued up, recently-listed Lite Access Technologies is the world leader in air blown fibre and microtrench solutions for fibre optic cable installation. Put simply, it cuts small micro-trenches in the road, fastens microducts securely below the ground, and uses compressed air to blow broadband fibre through the tubes from point A to point B.

“In the old world, companies would typically rip a street apart and dig about 1m wide and 1m deep and they would fill it with 4inch conduits and cables,” the 28-year telecoms veteran said. The Vancouverbased company, though, has got that down to a one and a 1/4 inch wide by 14-inch deep microtrench, which allows it to place up to 500m of fibre a day at around a third of the cost of traditional methods. It then uses compressed air through tube systems to blow the fibre to its end point. “Our method of using micro-trenching has put us at the forefront of this world at the moment,” Plotnikoff said. “The world has started to change its direction with respect to fibre connectivity options and started to become a little bit more flexible.”

The...company place[s] up to 500m of fibre a day at around a third of the cost of traditional methods.

www.thecse.com | 7

THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 3

In North America, a lot of cities and municipalities are starting to own their own infrastructure and trying to displace the high costs of service providers. “When we go in, we help them install this type of infrastructure. We have the flexibility to redesign and manufacture client specific configurations and offer design, technology and construction. We are a one stop shop.” Using traditional methods, installing a meter of fibre cable can cost up to C$750. With Lite Access and its team of 50 employees, it costs approximately C$120. The bottom line is that the company’s proprietary technology enables it to deploy a future-proof fibre network 3 to 5 times faster than traditional methods, and at a cost saving to the customer of 40-80 percent. Importantly, future capital costs associated with network deployment are dramatically reduced, as fibre can be added or removed as required. And Lite Access delivers all this while maintaining very attractive margins for itself. “If fibre were to become obsolete, you can blow out the old fibre and put in the new,” Plotnikoff said. It’s not the only company offering this type of service, with service providers “coming on board at a pretty ferocious pace” to start to develop their own methods of fibre deployment, but Plotnikoff isn’t concerned.

8 | www.thecse.com

“There are some other products available but their technology just doesn’t have the same integrities and more importantly, no one seems to be at the same point when it comes to the equipment, tools and experience that are needed to Co-founder and Chief Technical Officer Michael Plotnikoff micro-trench.” This kind of technology doesn’t just happen overnight and with 10 years of experience he said the company made sure its product was right before bringing it to the market. The company spent two and a half years designing the equipment, and continues to conduct rigorous crush and strength tests on its products as well as complying with strict fibreoptic installation standards. In this time, it has built relationships with some of the world’s largest companies, priming Lite Access for a long run at the top. “I’m pretty certain that Lite Access is going to be a leader [in fibre-optic infrastructure] for many years to come,” Plotnikoff said.

THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 3

And he would know, having worked at Sprint Canada (acquired by Rogers Communications) and TELUS, two big players in the telecoms space. A couple of years ago Lite Access was approached by Google to work at Stanford University, California. It was the first time the company had attempted a fibre to home project, and now, these projects make up a bulk of its work. “It was a wonderful opportunity for us to showcase the technology, showcase what we do, how cost effective, quick and easy it is to manage to design and build,” Plotnikoff said. Since then, the company has gone on to work with Verizon in New York and NTT in Asia, as well as install fibre infrastructure worldwide, including most recently, in Peru. But, like most upstarts, the hardest part has been funding, and that’s where a recent placement came in. The company completed a private placement of 7.38mln shares at C$0.25 per share for gross proceeds of C$1.8mln “The response since listing has been phenomenal,” explained Plotnikoff. “It seems like when this was starting, it was at the back of people’s minds that ‘I have to get into this’ and when we hit the market it seemed like the turning point for most people to say ‘I have got to get into it now’.

“It gave us the opportunity to broaden our horizons and go after acquisitions like construction company DSG Communications and tackle the market harder and faster than we were able to do in the private world.” DSG is a construction firm which has been working closely with Lite Access for more than six years, and, according to Plotnikoff, offers a route to more conventional methods of revenue. Lite Access paid CS2.5mln with C$1mln in cash and C$1.5mln in shares at C$0.68 per share, a bargain, he says, for the company which conducts a lot of its micro-trenching. It’s a signal of intent from the company which is expecting to have a “phenomenal year” according to its founder. “I expect us to continue to grow over many years because more and more cities are getting fed up with people ripping up streets and they have to have an alternative solution for broadband connectivity so you might as well do one which is the least intrusive, most cost effective and the most future proof.” n

Originally published on Proactiveinvestors.com August 25, 2015

www.thecse.com | 9

company profile

THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 3

Steel frontier:

Ferrosilicon producer poised to enter Steel Alloy Market By Christian Vakenti


Quebec-based mining company is poised to become the next ferrosilicon producer in North America. Canadian Metals Inc. (CSE: CME) is focused exclusively on the development of its Langis Project, a high-purity silica deposit located in the province of Quebec. Until recently, ferrosilicon was a mineral that was primarily mined in China. Due to a partnership with South Africa’s MINTEK, Canadian Metals has completed the first step in a rapid journey, where proof-of-concept has already been established and commercial production comes next. This is good news for the Canadian junior, which plans on entering the market for steel additives

10 | www.thecse.com

soon, at a time when steel production is expected to increase in North America. Having tested the process of producing ferrosilicon from the quartzite sand that can be found at Langis in abundance, the Quebec firm is now engaged in its next phase: conducting a Preliminary Economic Study (PEA) on a commercial facility. As the company actively explores Langis, results from a drilling campaign begun in May of this year will feed into the PEA study, adding solid numbers into the equations. Drilling is scheduled to take place over a large area of highly concentrated sandstone, rich in silicon, as indicated by government mapping and in part from previous drilling campaigns.

THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 3

The interesting thing about CME is the ...unique corner of the...market it will soon be able to carve out.... By proving this important steel additive can be successfully mined here, and in abundance, CME finds itself in a very pretty position: holder of a vital resource, with no known competitors in it’s region.

Ferro silicon (FeSi) is an atomized alloy, used as an essential alloy in the production of steel and cast iron. It is formed by combining iron and silicon with a silicon content range of 15% to 90%. A universal “heat-blocker” used in the production of carbon and stainless steels, this additive is used with other ferro alloys to remove oxygen from steel and as alloying element to improve the final quality of the steel. It can also be the basis for manufacture of prealloys like magnesium ferro silicon (FeSiMg), used for modification of melted malleable iron. Used in this manner for the production of cast iron, it can accelerate graphitisation. Ferro silicon replaces the need for ferro manganese, spiegeleisen and calcium silicides in the manufacturing process. Main markets for FeSi are the worldwide producers of alloyed, stainless and carbon steel. Used mainly as a master alloy during iron- and steel-making, the production of one tonne of steel consumes four to five kilograms of FeSi. As an alloying element it also improves the electrical and mechanical properties of steel along with corrosion resistance. One of the fastest growing categories within steel-making is the stainless sector, in both flat and long products. Stainless steel has a specific consumption of FeSi five to ten times higher than regular carbon steel. One tonne of stainless steel needs approximately twenty kilograms of FeSi.

At the end of this July, CME had just announced a first tranche closing of a private placement in the form of convertible debentures, amounting to some $700,000. This sizable fund will be used to carry out the PEA on the Langis project and for working capital purposes. The convertible debentures mature three years from the closing date and bear interest at a rate of 10% per annum, payable in equal semi-annual installments on June 30th and December 31st, commencing December 31st, 2015. At the option of the Corporation, interest shall be payable in cash or in shares for the first year. For year 2 and 3, interest shall be payable in cash only. If the payment is made in shares, it will be based on a price equal to 85% of the average closing price of the Common Shares of CME for a period of 20 consecutive trading days ending five trading days before the payment date. The interesting thing about CME is the seemingly unique corner of the North American market it will soon be able to carve out for itself. By proving this important steel additive can be successfully mined here, and in abundance, CME finds itself in a very pretty position: holder of a vital resource, with no known competitors in it’s region. As the steel market looks to take an upswing and with prices strengthening, Canadian Metals, Inc. is poised to enter the new steel frontier not only at the head of the pack, but for the foreseeable future, as the only North American vendor of note. n www.thecse.com | 11

company profile

THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 3

Targeted Microwave Solutions harnesses microwave energy to revolutionize industrial material processing by Peter Murray


hat sets your company apart?” It is the question all investors want answered before deciding to put their hard-earned money to work in a specific stock – essentially, why should I buy your shares instead of another company’s shares? For Targeted Microwave Solutions Inc. (CSE:TMS), unique technology and a strong corporate profile is clearly resonating with investors. As of Augustend, the company led the Canadian Securities Exchange for capital raised in 2015, having added CDN $11.85 million to its treasury in January. Despite being a relatively new listing on the CSE, Targeted Microwave Solutions is already a standout in the emerging-technology sector, commissioning a CDN $5 million demonstration processing plant in July that features its proprietary microwave beneficiation technology. The Targeted Microwave Solutions team includes founders and senior executives from NYSE, NASDAQ, and TSX-listed companies that collectively bring a robust background in technology research, development, and commercial deployment. 12 | www.thecse.com

It is a pretty strong basis for an emerging company, but once you know what the team is working on it is easy to appreciate why the technology and its objectives are attracting successful people and large investors. In short, the company’s technology involves the application of microwave energy to dehydrate and process coal, as well as a wide range of industrial materials and aggregates. The technology aims to replace conventional thermal processes in the food, wood, clay, and mineral processing sectors that perform the same function by heating materials from the outside in using large kilns or ovens. Targeted Microwave Solutions believes that the unique ability of microwaves to dehydrate materials from the inside out, with much higher efficiency, is what will make its technology a very attractive alternative. Although the company believes its technology may have potential applications to a wide variety of industrial markets, it is primarily focused on processing high-moisture sub-bituminous coal. To understand why, a little background is in order.

THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 3

Most people are probably unaware that coal-fired plants are the leading source of electricity in many countries. According to the International Energy Agency, China generated 79% of its power with coal in 2012, with Australia close behind at 78%. The United States got 45% of its electricity from coal, and even clean energy advocate Germany relied on it for 41%. South Africa? Try 93%. “What we have seen is that the coal primarily used in power plants is bituminous coal. This coal has a high heat value and low moisture content, but contains higher concentrations of mercury, selenium and sulfur,” explains Targeted Microwave Solutions Chief Executive Officer Lawrence Siegel, noting that these contaminants find their way from power plants into the air and other parts of our environment during combustion. “Lower rank coals such as sub-bituminous and lignite coals are much cheaper to mine but do not have the desired high heat value characteristics of bituminous coal, primarily because they exhibit a much higher moisture content – up to 45% in some cases – and because of that they do not burn as well,” he continues. “Generally speaking, however, this lower quality coal contains only a fraction of the polluting contaminants that are present in conventional thermal coals used today for electricity production.”

Clearly, then, the trick is one of de-watering low quality coal to the point that it burns with a high degree of efficiency. Low rank coal is inexpensive, and generally lower in sulphur content. By improving its heat value, Target Microwave Solutions hopes to add value to this energy feedstock and create a designer coal product that may prove to be a very attractive alternative to conventional thermal coals used by utilities worldwide. It seems the type of challenge solved by relatively simple technology, but in reality companies have been trying to find a solution for decades, with little to show for their effort. One of the reasons might be that most groups use one of a number of thermal drying approaches, which essentially applies external heat to coal to dry it out. In recent years, a small number of companies started to experiment with microwaves to penetrate coal and force the drying process, but only Targeted Microwave Solutions aims to make the process vertical. Most commercial microwave applications, including in the food industry where the technology is used for killing bacteria and other tasks, process on horizontal belts. “The traditional method of moving product through microwaves is horizontal conveyor belts,” says Siegel. “Getting an even spread is difficult, and heated material on belts can cause the belts to disintegrate,” he adds. www.thecse.com | 13

THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 3

“We developed an approach using microwaves in a vertical process where the material is fed through a series of vertical processing chambers and is subject to microwave exposure on the way down. Water and steam expelled from the material is removed through specialized vacuums on the side of the system. The question is how much energy do you have to put into those microwaves and how much water are we taking out of the material, and at the end of the day are we ahead of the curve? At this point, we are.” To prove this, the company built its demonstration plant in King William, Virginia, commissioning the facility in late July of this year. Here, material (currently coal) rides in an elevator up to a hopper before being dropped through a shaft utilizing Targeted Microwave Solutions’ proprietary technology. Microwaves, their timing and intensity controlled by a special computer program, flow out of articulating ports, hitting the coal all the way down as it falls and stirs inside the processing chambers. King William TMS Pilot Plant

14 | www.thecse.com

THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 3

The system is designed so that no microwaves escape and no conveyor belts catch fire, and because the coal moves around, the application of microwaves is more even. The end result is superior drying efficiency and better safety. One of the goals in the coming year is to find ways to make the technology even more efficient. Putting more coal through the system using less energy and on a smaller footprint – all of these achievements should make the Targeted Microwave Solutions technology more attractive to power companies, to whom available real estate for the installation of additional equipment and processes is often quite limited. Refining the technology will soon be the responsibility of an R&D team the company is locating in Gaithersburg, Maryland, about 90 minutes from the demonstration plant. Siegel expects a new R&D headquarters to open in October and to add to his team of on-site engineers by the end of 2015. But, let’s turn back to the demonstration facility for a moment. Its location is interesting and heralds a potentially important component of the company’s future, as it sits on 5 acres of land situated next to a large clay mine in Virginia. Kitty litter is a huge industry in the United States and one of the challenges in producing it is drying a special type of clay it contains called bentonite.

“It is absolutely our intention to present our technology as an attractive alternative to the bulky and inefficient ovens currently used to dry the bentonite,” explains Siegel. “Thermal ovens heat the clay from the outside requiring it in many cases to pass through the oven several times before it is the CEO Lawrence Siegel correct dryness and size. Our microwaves penetrate the clay and remove moisture from the inside out, potentially reducing the costs of this process substantially. We are going to begin microwaving clay in the next several months as preliminary tests are quite encouraging.” Coal treatment, however, remains the priority and driving force behind the Targeted Microwave Solutions business for now. Making that more than clear are joint ventures the company has already formed in China and India, countries that Siegel believes will be its two leading sources of business. “I suspect probably in the spring we will begin an aggressive marketing effort to sell our technology to coal-fired plants, or joint venture with power companies to build a facility on their premises and share in the revenue stream,” says Siegel.

Our microwaves penetrate the clay and remove moisture from the inside out...

www.thecse.com | 15

THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 3

“My hope is that by this time next year we have commercial orders in place and we start to see some revenue.” This timeline is aggressive to be sure, but when one considers the pedigree of the company’s leadership, it is difficult not to hop on the bandwagon. Siegel has worked in a variety of technology and manufacturing industries, both for himself and for some very high-profile global companies, including 5 years as president of Atari, a well-known pioneer in home video game consoles. Board chairman Jim Young was one of three businessmen who worked to establish MedImmune Inc. in its early days during the late 1980s. He was still with the company a decade later, as president of R&D, when it was sold to AstraZeneca for USD $15.6 billion. Director Steve Crocker was part of the team that developed protocols which later formed part of the foundation for the Internet. He is currently chairman of ICANN, or the Internet Corporation for Assigned Names and Numbers. Then there is Dr. Rajiv Modi, Chairman and Managing Director of generic drug giant Cadila Pharmaceuticals Limited, the largest private pharmaceutical company in India.

Plants for processing coal and other materials using the Targeted Microwave Solutions technology would cost in the tens of millions of dollars to build, but environmental regulations and big cost savings from higher burning efficiency could make that a palatable number for many potential users. “The optimal revenue model will depend on a potential client’s, and our, access to capital, and other factors,” says Siegel. Beyond treating coal and bentonite, Siegel speaks of the potential to replace conventional mineral separating processes in the mining industry, particularly that for iron ore, and more obvious applications such as removing water in the wood feedstock for biomass plants. “We have dozens of applications in mineral and fuel stock areas to exploit in the months to come,” he says. If coal-fired plants do begin adopting the technology in large numbers, it would not be the first time a clever team took an age-old problem, looked at it a different way and utilized advances in technology to solve it. Technology, connections and intellectual firepower are among the factors required to pull off such a feat, but then those terms describe Targeted Microwave Solutions’ strengths. Shareholders and the environment are counting on the team’s success.n Originally published on Proactiveinvestors.com September 10, 2015

16 | www.thecse.com

company profile

THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 3

Robix’s one-of-a-kind oil spill clean-up vessel ready to make a splash By Deborah Bacal


obix Fuels (CSE:RZX) has under its sleeve what it says is a revolutionary oil spill cleanup technology, with a patent for a vessel that recovers oil off the surface of water mechanically. Known as the “COV”, or Clean Ocean Vessel, the apparatus promises a higher rate of recovery as well as a smaller environmental footprint for oil spills in open waters, harbors and near shorelines.

...it can be used in virtually any rough sea conditions with waves as high as eight feet...

After signing its first preliminary agreement to market the device this past spring, Robix is ready to build on its foundation and establish a portfolio of customers, taking the company to a new stage of growth.

The Alberta-based company’s CEO, Nathan Hansen, said the technology is based on simple “oleophilic” (oil friendly) principles of physics, as the ocean vessel contains two metal contrarotating drums to which the oil clings, allowing for the material to be picked up off the surface of water. Scavenger blades then work CEO Nathan Hansen to scrape the oil/water fluid off the drums into storage tanks so that the oil is safely contained in the vessel. The contra rotating drums also cause a pumping action, which helps the oil to collect more effectively than by one rotating drum, explains Hansen. The advantage of the stable, Catamaran-style barge vessel is that it can be used in virtually any rough sea conditions with waves as high as eight feet, and that the recovery efficiency of the COV is in the 90 to 97 percent range, outperforming its competitors that cannot operate when waves exceed 18 inches. The special design of the company’s vessel gives the ability for the two drums to fit into the surface of the oil slick, says Robix.

www.thecse.com | 17

THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 3

The technology is also highly scalable, as it can be used in any size, from mini to large, depending on the size of the oil spill. The company has already built its first COV, which is 40 feet long, 26 feet wide, and 12 feet deep from the surface of the deck to the bottom of the tanks. Robix’s idea is to license its technology to either a potential customer such as an offshore oil producer, or a service contractor, to use the vessel “in case” with a quickly deployable plan in place. The license would provide the same comfort as insurance, in the sense that if an oil spill tragedy occurred, the COV would be on stand-by and ready to help. “If there is a leak on a drilling platform in the open ocean, that’s where we come in,” says Hansen. “A small spill at a gasoline station – that’s not really our strength. Ours is a big oil spill. It doesn’t happen that often, but when they do, it’s catastrophic,” he adds, referring to the $40 billion clean-up cost of the infamous BP oil spill in the Gulf of Mexico in 2010, which put oil companies under intense scrutiny, and on governments’ radar screens everywhere. 18 | www.thecse.com

A market for the technology certainly exists. Some 2 billion metric tons of oil is shipped in oil tankers every year, and in U.S. waters alone, 1.3 million gallons have been spilled from vessels and pipelines. Robix’s idea is taking off, with the company already in discussions with several potential customers. In March, the company signed a letter of intent with Grupo Macomax, a Mexican holding company that offers services to environmental emergencies, calling for joint marketing of the vessel for oil spill recovery and remediation. This was followed in May by an LOI with engineering services company Petrolmeca. Robix and Petrolmeca had the opportunity to demonstrate the COV technology in July to government officials from the state of Tabasco and senior representatives of Petroleos Mexicano, the oil giant known more commonly as Pemex. In another move to hasten access to new markets, Robix in August signed a non-binding Memorandum of Understanding with MERV Marine Ltd. calling for the companies to codistribute products.

THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 3

Our vessel works to reduce the cost of clean-up...

For Robix it means that MERV, an Australian research and development company focusing on emergency and marine needs, would market Robix products worldwide, except in Mexico and a handful of other jurisdictions where Robix already has exclusivity agreements in place. “Our vessel works to reduce the cost [of cleanup] so dramatically, and appeals to any entity operating in a region with ample shipping traffic and with production platforms with a higher risk,” the chief executive affirms. Hansen is confident that the technology has widespread appeal nowadays, citing the example of a mandate implemented in the Mediterranean to have all risk mitigated through stand-by equipment, a result of the BP oil spill. The typical method used to clean up oil spills now consists of surfactants and dispersants, which drive the oil directly to the bottom of the ocean, and only defer the problem, whereas oil is contained in the COV safely. Indeed, Hansen says that environmentalists have put pressure on governments to supply “best-in-class, mechanical solutions” for protocol measures, which he anticipates will be a huge benefit in terms of attaining customers. Specifically, Robix has advanced, developing economies high on its radar screen as opposed to already developed markets. Currently, the company is in the early stages of crafting its business plan and working out its guidance, which it expects it will be able to release after it completes its first deal. Its lucrative business model is such that as soon as it has a licensee with a revenue stream, it will immediately begin generating positive cash flow. For example, a customer would pay an upfront license fee, which would be quite similar to the capex required to build the unit, as well as monthly stand-by fees based on how many units the client would like to place.

“The margins on profit are very high. Aside from building the unit, the only costs would be training on how to use the apparatus,” says Hansen. Marketing plans are being implemented now, with Robix raising $1.1 million in an equity round earlier this year. Most of the funds raised so far have gone directly toward the cost of building the first unit, which was approximately $2 million. “We are required to design another size unit, probably a 10 footer, which will likely be in conjunction with the first license,” the CEO explains, adding that this new unit could well be funded by a provincial grant from the Canadian government. The COV, the patent for which forms the basis on which the company was founded, is just the beginning for Robix, as it looks for more intellectual property acquisitions, all focused on oil-water separation technology. The chief executive says such technology would be in demand in the Western Canadian Sedimentary Basin, where many oil fields in the northern parts of B.C. and Alberta have severe water issues when drawing the oil up. “These companies are basically producing water with oil that comes with it. There is a need for new technology for the industry to continue to have economic viability.” He adds that there is also an acute need worldwide for purifying water, another possible use for its oil water separation IP. Whatever the scenario, the COV patent is the first in a series of patents, with Robix currently in various negotiations to tack on more to its portfolio. In the meantime, Robix is working on further applications for its Clean Ocean Vessel, opening up its existing technology to new markets and buyers. The basic parts of the COV can also be used for oil sands tailings ponds, another big environmental concern for both governments and the oil and gas industry as a steady stream of oil slicks is created by the tailings process. The device would turn the otherwise toxic oil sands waste into more oil to sell, which otherwise would be lost revenue. “Our R&D team is working on this right now,” says Hansen, referring to the combination of other technologies with Robix’s two contra-rotating drums to make the idea more economically efficient. n Originally published on Proactiveinvestors.com March 31, 2015, updated for this publication.

www.thecse.com | 19

company profile

THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 3

IGEN Networks takes relationship between car and driver to a whole new level By Peter Murray


ave you ever wished you knew how fast your teenage son was driving your car when he borrows it? Or exactly where dear old dad is when he is 40 minutes late for a family dinner? Or that your car battery is about to conk out before it does so and leaves you stranded in the middle of a downpour? If so, then you’ll want to know about IGEN Networks Corp. (CSE:IGN; OTCQB:IGEN), as the company is beginning to commercialize a system that sends all this information and more straight to your mobile phone in real time. From monitoring the location and driving behavior of family members to tracking a fleet of drivers to ensure they are doing what you pay them to, the enhancements to safety and efficiency are farreaching. IGEN President and CEO Neil Chan and his team have really thought this through, to the point that not only does their solution address safety problems for drivers but also marketing problems for car dealers. 20 | www.thecse.com

The chain of use begins when a new car arrives on a dealer lot and is installed with the IGEN hardware, a box about half the size of a computer mouse. Dealers are able to track cars if they are stolen, and the companies that finance the cars know how many cars are on each dealer lot. They will know which ones too, as the system provides the Vehicle Identification Number unique to each automobile as part of its data feed. When a customer purchases a new car they have the opportunity to subscribe to the IGEN service and have a full array of real-time data available to them to monitor the conditions and use of their car. The dealer benefits as well, not only from having sold the system but also because it creates an ongoing connection with the car purchaser. One of the biggest challenges for car dealers is customer retention. In other words, once a customer purchases a car, how do you get them to come back to you for their next purchase, and in the interim how do you keep them loyal to your dealership for oil changes and other service?

THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 3

Nimbo LLC. Creating Safety, Security, and Peace of Mind with GPS Tracking. Much more than GPS tracking… It’s a Dealer Approved Program & End-User Application.

Because the IGEN system is monitoring the vehicle, it can automatically inform the owner when it is time for an oil change. But this can be programmed as a dealer function as well. That way, the dealer can e-mail the owner to let them know that their automobile needs servicing, and perhaps send a coupon or some other type of enticement along with the message to encourage the owner to use the dealership. “Less than 10% of customers come back to the dealer after the warranty period expires,” Chan points out. It is the classic win-win situation, where the customer and the business both derive clearly identifiable benefits from use of the system. Another benefit to consumers is the potential for lower insurance rates. In this scenario, the driver chooses an insurance company that agrees to a discounted premium in exchange for the ability to monitor driving habits so the insurer knows if the driver is operating the vehicle safely and adhering to limitations within the terms of the policy.

The owner saves money and the insurance company knows it is underwriting someone who realizes they are being monitored and therefore had better drive responsibly. Chan explains that the insurance industry in the United States suffers some $15 billion each year in what is known as “rating errors,” essentially money left on the table by insurance companies because they are incorrectly assessing the behavior of the drivers they insure. “The fact is they are guessing and don’t really know how you drive,” says Chan. “The premium discounts come from the ability of the insurance company to have better visibility on your driving patterns. We have the capability within our platform to know whether you are a good driver or a bad driver. We have developed algorithms along with insurance companies to determine that as it relates to premium discounts.” Chan names some of the biggest insurers in the United States and says “this is where they are heading – if you want a discount on your insurance you will have to have one of these in your car.” www.thecse.com | 21

THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 3

IMS – Dealership Inventory Management System. Offers Dealerships a way to proactively manage their new, used, & loaner vehicle inventory for any pc or mobile device.

SVR – End-User Systems sold by F&I (Finance Department) at Dealerships. Creates a profit center & ROI for the dealership and offers their customer a way to proactively protect their vehicles and those riding inside of it.

22 | www.thecse.com

The driving force behind the idea and creation of the technology to support it is Chan himself, whose background fits the IGEN vision perfectly. As Senior Vice President for Sales and Marketing at Webtech Wireless, a leader in GPS-based fleet management, Chan was essentially responsible for executing the company’s strategic plan. Under his watch, Webtech grew to have 800 customers and some 240,000 location devices in over 40 countries. Earlier in his career, Chan founded and built Motorola’s broadband access business in the Asia Pacific region, establishing 12 regional offices along the way, and was involved in the actual creation of wireless broadband through a company he helped put together called Airvana. Thanks to these and other senior roles at successful technology companies, Chan also understands a relatively new, but very important, market that depends on our use of mobile phones, computers and other connected devices – big data. Once IGEN has enough vehicles equipped with its monitoring hardware, it will be able to profile drivers in different jurisdictions and pool data that can be analyzed to show how people live their lives, via their cars. Marketers, government, infrastructure planners and many others should be willing to pay a pretty penny for IGEN data and related analytics. “I can be specific regarding the various services we offer but at the end of the day this is our business,” says Chan of analytics. “We know the lifestyle of a family based on the time they are spending in the car.

THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 3

Who is driving and how much time are you spending in various locations throughout the day? There is a lot of information there and our model is targeted at the consumer segment, where we are going to get the biggest sample.” Almost sure to make that sample larger over time is a relationship with Verizon Wireless in the United States announced on May 21 of this year. Under the agreement, Verizon sales representatives will sell IGEN’s system to automobile dealers in addition to the telephones and other products they are already marketing. “One of the first things I always used to do was go find the gorilla to hold its hand, and that was usually the carrier. I get inside the carrier to develop a relationship and that is how you expand your channels,” says Chan. “With the Verizon partnership, we are preparing the Verizon sales force to sell our products and services into dealer channels across the United States. We do business with 500 dealerships now but there are 25,000 new car dealerships in the country, so we have barely scratched the surface.” Chan goes on to explain that a large dealership sees about 500 vehicles pass through its lot every month. When asked to boil the appeal for drivers down to a single concept, Chan is quick to choose “consumer empowerment.” He explains this using transportation trailblazer Uber as an analogy. “What the difference is between before Uber and the present is now the consumer interacts directly with the driver. It is simple but it has created a billion dollar industry.

Comparison – This shows how our products compare with each other and how our products compare against the leading competitors.

LoJack Comparison – Shows how our systems map coverage compares to the top leading competitor LoJack.

www.thecse.com | 23

THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 3

Retention – This shows how our program offers Dealerships a way to proactively promote their website, service appointments, and customer retention.

We’ve bypassed competitors who require you to talk to someone to get information. With IGEN the information goes directly to you.” And taking that concept one step further, could the benefits extend beyond paying customers by serving one day as a solution to the plague of bad driving? “I believe family behavior changes,” says Chan. “I have never been alerted on speeding with any of my kids when they have taken the car. It does change everyone’s behavior for the better.” Revenue in the quarter through June 30 was USD $289,065, some 90 percent of it from hardware sales. The first year of service is baked into the initial sale, and profit margins are good, but it is in the second year – the renewals – when the margins get really juicy. “We are bringing the control back to the consumer,” says Chan in summary. “Providing that direct information to the consumer is really the essence. Being able to collect and use that data, being in the analytics business, is where we think the future is. And we understand technically how all this needs to come together, and what metrics you need to focus on to make sure you have a profitable and ongoing business for the long term.” n

PPG – Product Performance Guarantee Options available.

Originally published on Proactiveinvestors.com September 3, 2015

24 | www.thecse.com

company profile

THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 3

BioNeutra anticipating record year as new production facility expands line-up, opens markets By Jamie Ashcroft


ioNeutra Global Corporation (CSE:BGA) will soon enjoy a new level of control over production of its healthy sugar alternative thanks to a facility under construction in Edmonton that, according to Senior Vice President, Business Development Barry Charnay, will help to strengthen the company’s position in North America and other key markets. BioNeutra produces a natural food supplement called isomalto-oligosaccharide, or IMO for short. The product essentially is a low calorie, high-fibre sugar substitute that is also advertised as having prebiotic qualities.

Producers of nutrition and sports bars are the primary users of the sweetener, which acts as a binding agent for their foods as well. It is also used in dry-mix supplements, notably in the weight management category. Charnay explains that demand is increasing across the broader food production market as brands look to reformulate recipes to reduce sugar and calorie content. “Our base product is about 50% as sweet as sugar,” says Charnay. “It is a reduced calorie sweetener, it is natural and is available as organic, and it is fairly ‘clean label’.

...demand is increasing...as brands look to reformulate recipes to reduce sugar and calorie content.

www.thecse.com | 25

THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 3

“We basically are able to use it for just about everything. Other sweeteners contain about 4 calories per gram and we can cut that in half or more.” In addition to business-to-business sales, more recently BioNeutra has gone online to sell branded products directly to customers, typically as a sugar replacement for home bakers. It is being sold via Amazon and Alibaba, as well as specialised health and fitness retailers. BioNeutra’s product is a form of IMO branded as Vitafiber, which is produced from starches. It comes either in syrup form or as a powder, BioNeutra Edmonton Complex like sugar or stevia. “Larger regional buyers and the multinationals Since 2009, the group has relied on ask ‘have you got the ability to ramp up production’ outsourcing production to Asia. In China, IMO is and the answer is – with our own production and extracted from corn whereas the production base with the licensed and contracted production – we in Indonesia uses tapioca as its source. will be able to do whatever any client would want. With the Edmonton facility, however, the If someone wants to scale up rapidly, on 60 days company expects to reach heights it has not seen notice we can do whatever they want.” before. The Edmonton facility will start with capacity Charnay explains the new facility will allow of 5,000 tons per year. Charnay says that would the group to diversify its line-up via natural and probably satisfy most of the company’s current certified organic products and boost overall needs, though the flexibility is there to readily output capacity. It should also help with access to double capacity to 10,000 tons per year if required. key markets in North America, including Mexico. Another possible avenue for expansion is “We currently have limited organic product,” commercial partnerships. These could involve explains Charnay. “But with the new facility we logistics and warehousing that would also add have the ability to do what I deem to be proprietary distribution channels and new market reach. new natural and organic products and proprietary BioNeutra, which began trading on the Canadian processes, and with those we would optimize use Securities Exchange last October, has a strong of offshore production. track record of revenue growth.

...the new facility will allow the group to diversify its line-up via natural and certified organic products and boost overall output capacity. It should also help with access to key markets in North America, including Mexico.

26 | www.thecse.com

THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 3

Senior Vice President, Business Development Barry Charnay

Charnay says that revenues were around USD $1 million annually between 2009 and 2011, but that from 2012 onwards things really started to pick up. In 2013 revenue was CDN $3 million and in the year through February 28, 2014, it more than doubled to some CDN $7.5 million. Adjusted for the shift to a new financial year, Charnay says the current 12-month revenue number could reach CDN $12.5 million. And with the higher sales from domestic production could come wider margins, while new organic products help to make operations even more profitable. “We’ll have more control over product process quality, and cost, and we’re not going to be paying manufacturing margins to a contractor,” explains Charnay. “Instead, that stays in-house, to our shareholders’ benefit.” Charnay points out that the new facility will potentially have more significant implications for product marketing into the United States and Mexico. “With our move to our own production here in Edmonton, we will have the only facility in North America to produce IMO. It will open new markets under the North American free trade agreement.” He also expects the move will further demonstrate BioNeutra’s position as a leader in its market in North America and Europe. Charnay believes it will help differentiate BioNeutra from what he calls ‘copycat’ manufacturers which, he says, are dumping product into the market in North America without proper regulatory approval. “IMO is not simply IMO; the reality is that all products are different mixtures and our regulatory approvals are specific to our product and specific to our process,” Charnay says. “The reality of us being a company that is able make a product in Canada for North America markets will enable me, in the US and particularly in Mexico, to increase market sales. We’ll also be benefitting from country of origin labelling as well as customs and duty benefits. It will all help deliver greater earnings thanks to lower customs duties, freight and shorter time to market.” n

Chairman and Senior VP Bill Smith

Originally published on Proactiveinvestors.com September 9, 2015

www.thecse.com | 27



There are now over 280 securities listed on the Canadian Securities Exchange, accessible for trading online through the following discount brokerages:

BMO InvestorLine

National Bank Direct Brokerage

CIBC Investor’s Edge

Qtrade Investor

Credential Direct

RBC Direct Investing

HSBC InvestDirect

Scotia iTrade

Laurentian Bank Discount Brokerage

TD Direct Investing


Virtual Brokers




Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.