THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 4
4 | www.thecse.com
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 4 ®
Quarterly Issue No. 4 | 2016
contents
Publisher Uptick Mail Inc. #317—1489 Marine Dr. West Vancouver, BC Canada V7T 1B8 1.604.202.7841 Group Publisher Terry Tremaine Editor in Chief James Black Graphic Design Vanessa Fryer
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CEO’s Message
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Free Digital Subscription Published by Uptick Mail Inc. on behalf of the Canadian Securities Exchange. To receive your complimentary subscription, please visit www.thecse.com and complete the contact form.
feature story
9 Drone Delivery Canada Shaping its own niche in the Internet of Things revolution
company profiles
12 Glance Technologies Giving restaurants a helping hand with clever take on mobile payment
15 Fantasy 6 Sports Blending top technology trends to create own momentum in Big Data
18 Imagination Park Entertainment VR booms for industry-savvy team and its low-risk approach to Hollywood
21 True Leaf Medicine International Twins medical marijuana ambitions with growing line of hemp supplements for pets
www.thecse.com @CSE_News
24 MOBI724 Global Solutions Providing consumer solutions at the frontline of the fintech revolution www.thecse.com | 5
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 4
CEO’s Message As we approach the end of another successful year at the CSE, I would like to review many of the recent achievements and milestones reached by the exchange. It needs to be said that none of this would have been possible without the participation and energy expended by our cohort of listed companies and entrepreneurs, industry partners and vendors, and most importantly, the end investor that puts their capital to work in our marketplace. When assessing the many measures by which the exchange has grown in 2016, one of the most obvious and outstanding metrics has been the performance of trading of CSE-listed issuers. Across all meaningful metrics, the marketplace has posted significant record increases including the number of trades as well as total share volume and value traded. In total, we will exceed 5 billion shares traded (more than double last year’s record), and the exchange will eclipse $1BN in value traded on the market—a clear indicator that the exchange is having a meaningful economic impact for investors and companies.
RICHARD CARLETON, CEO Canadian Securities Exchange (CSE)
Against significant headwinds, issuer fundraising has also achieved new records: more than $300M will be raised by year end for the first time. Included in this year’s financings were a broad range of financing types, including a series of small value dealer-backed IPOs. On the higher end of the scale, the CSE saw multi-million dollar distributions, the most significant to date being the $55M convertible offering completed by Supreme Pharmaceuticals this fall. All proof positive that the CSE is providing a wide spectrum of funding opportunities for issuers. Less obvious, but just as important were two major improvements made “under the hood” at the exchange, the first being a revised and updated series of policies governing listing entrance requirements. Updated continued listing standards will follow soon. Tweaks made to these rules were developed to provide stronger entrance benchmarks while preserving the exchange’s alignment with entrepreneurs seeking a listing to execute their long-term vision for business growth on a public exchange. The second, and less visible improvement, was the roll-out of CSE’s new trading engine. Built from the ground-up, CSE’s new platform is an updated technical backbone providing enormous improvements in performance, while reducing costs. The system will also provide a framework for the CSE to introduce additional order types and features designed to improve the trading experience for investors. In conjunction with this initiative were enhancements made to CSE’s order routing, risk management, and compliance services. A benefit of launching this new platform will manifest itself in the form of greater involvement with the market making community, whose increased involvement will ultimately result in tighter spreads and deeper orders books—a boon for investors and listed issuers. Finally, we are privileged to share more issuer stories throughout this magazine. You will find a wide variety in this Quarterly issue and encourage you to visit us online at thecse.com, on our blog at blog.thecse.com, and on our CSE YouTube channel to get more information on the companies and entrepreneurs profiled. Thank you for a wonderful year and we look forward to seeing you in 2017!
Sincerely,
Richard Carleton
6 | www.thecse.com
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 4
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GLOBAL SOCIAL MEDIA MARKETING AND PUBLICATION SERVICE FIRM
TAP INTO THE POWER OF SOCIAL MEDIA. Extensive experience serving public companies and developing investor relations Terry Tremaine 604-202-7841 terryttremaine@gmail.com http://uptickmail.com
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THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 4
feature story Tony Di Benedetto
Drone Delivery Canada
Readying proprietary drone fleet to speed delivery to rural communities By Jamie Ashcroft
or Canada’s remote communities the reality of receiving packages from automated delivery drones is a lot closer than many might think. Commercial deliveries are set to begin at some point in late 2017 with Toronto-listed Drone Delivery Canada (CSE:FLT) taking to the air. Ontario-based DDC will be among the first ever commercial operations once it secures final approvals from Transport Canada in the second half of next year. Chief Executive Officer Tony Di Benedetto sees rural Canada as an ideal proving ground for its scalable drone-based business model. He points out there are over 1,800 isolated communities strewn over a sparsely populated landscape. It is not only a sizable market opportunity for DDC, but it also represents an opportunity for the Canadian authorities to better connect areas that are otherwise off the grid.
For investors, meanwhile, DDC presents a low-priced option on what is predicted to be a very substantial technology industry. Broker Macquarie estimates the size of the entire private drone industry (which could include agricultural applications, infrastructure inspection, surveillance and surveying as well as parcel delivery) will expand ten-fold to around US$60 billion by 2020. As an early mover DDC is not as recognizable as the likes of Amazon or Ratuken—customer-facing online retailers that have both been working on drones. But when DDC’s technology is deployed in late 2017 it will be established as a revenue generating pioneer.
WHAT EXACTLY IS DRONE DELIVERY CANADA? There are two elements to DDC’s technology. A proprietary operating system—which will route, track and manage fleets of delivery www.thecse.com | 9
Originally published on Proactive Investors November 25, 2016.
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THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 4
drones—is perhaps the most significant element; the company’s intellectual property. The Company has also, by necessity, developed its own drones, though Di Benedetto says that as more advanced third-party drones become available the company will be open to using those. “We’ve had to develop our own prototypes to commence flying, because they simply don’t exist, you can’t go on the market and go buy delivery drones, they’re not there,” he says. “Eventually, over time I’m sure people are going to create delivery drones and we’re not locked in to the ‘airframe’ design. “Our logic is transportable. So if a better 10 | www.thecse.com
airframe emerges in six months we can essentially take our logic and transpose it and now we have a different vehicle for our fleet. “It is no different than a traditional courier today—they have trucks and cars, and they switch between brands, sizes and specs.” DDC’s drones can presently carry between 7lbs and 10lbs at a time over a 200km operating range. They have been tested and, subject to regulatory approval, are ready to go. Progress toward initial delivery operations through late 2017 will be the key catalyst for investors in the coming months as DDC works to prove the commercial concept. It recently secured licenses to test the
technology, and is now awaiting full flight status from Transport Canada, anticipated in third or fourth quarter.
SCALABILITY WILL BE KEY The scale of early operations will be driven by the sentiments of two key stakeholders, the Canadian regulator and the initial appetite of customers. “We will slowly ramp ourselves up, it is about taking proper steps at first,” Di Benedetto explains. “We’re working with a variety of different clients; we have quite a big roster of clients that we’re engaged with.
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 4
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Once it is installed and integrated we then oversee the operation of the fleet. We are essentially ground control for the client. —TONY DI BENEDETTO
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“Our clients are large organizations with substantial locations and requirements. We’re not delivering for ‘Joel’s pizza shop’ … they [our clients] are very large corporate and government organizations.” As the delivery system is proven and confidence builds the company expects it will be able to scale up quickly with drones embedded into its clients’ existing operations. The drones will be deployed on location for DDC’s clients, which reduces the need for ‘bricks-and-mortar’ type capital spending and as such Di Benedetto says it is “very, very scalable”. “It is an incredibly elastic model,” he adds. “It is a high-earning, recurring revenue business. The business operationally produces a lot of cash.” “Clients would contract us for ‘x’ amount of deliveries per month, and it is a recurring revenue stream from then on. There’s a setup charge and integration fees to get the technology enabled in the client’s environment. “Once it is installed and integrated we then oversee the operation of the fleet. We are essentially ground control for the client.” Once it is sufficiently large in terms of client orders, DDC will have the option to contract third-party manufacturing for the drones. This would be another important milestone in the development process. It is quite clear that DDC is presented with a very significant market opportunity. It is an early mover with a disruptive technology that could transform the transport and logistics business. The big question, however, is how quickly and effectively the small-cap company can seize the initial opportunity? There’s still a long road for it to navigate, and it all starts with final regulatory approval. Investors will want to watch out for progress towards this pivotal regulatory milestone, as well as any commentary from the company on its commercial tie-ups and contracts.
www.thecse.com | 11
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 4
And increasing efficiency and customer satisfaction is probably not a bad idea in an industry which in North America will turn over US$750 billion this year. Green—who is listed in Canada’s W100 top 100 entrepreneurs—founded the company alongside Desmond Griffin, the driving force behind mobile parking payments business PayByPhone before he sold it for around C$45 million over five years ago. “I wouldn’t want to build a payment app unless I had Desmond leading the team,” explains Green. “We have the person who probably has the most experience and success in the mobile payments sector worldwide as our Co-Founder and Chief Executive.” The experience of the two co-founders—who still own more than 50% of the company—has allowed the business to thrive and develop the alliances needed by any successful start-up, Green adds. “We have a stellar management team and we have an innovative and highly disruptive technology that offers an unmatched user experience. Those two things will enable us to dominate the exciting space we are in.” Green isn’t joking when she hints at domination either, in fact quite the opposite. “Right now, we’re the largest mobile payment company for restaurants in Canada. Our goal is to become the biggest one in North
COO & Co-Founder, Penny Green
America within a year and eventually the largest in the world.” On November 23, Glance Pay announced it had signed up the MR MIKES Steakhouse Casual chain of 32 restaurants in Western Canada, bringing the total number of restaurants signed by Glance to 95. Glance has been aggressively signing up restaurants, and announced it signed 48 new restaurants to use the Glance Pay app within a recent 36 day period. Green is more than happy with the progress made by Glance and its app so far on its quest to become number one, and is confident it can be profitable within the next few years. “We are far exceeding our projections already in terms of adoption rates and usage. Our break-even point can be after one year of operations, depending on how fast we expand,” explains Green. As you might imagine, there are a few companies in this space that are trying to provide other solutions, but Glance isn’t too
concerned by what they offer. The main stumbling block for competitors is that they normally require their software to be integrated into a restaurant’s point of sales system, which can be time consuming and expensive, and can also limit the number of potential customers able to come on board. “With our technology we can have a restaurant live on our system an hour after signing them up,” says Green. “This is something no competitor seems able to match at the moment. It’s a huge advantage.” Glance also allows each restaurant to offer a customized rewards scheme for its customers through the app, so that regular customers can receive as much as 12% of what they spend back in credits at the restaurant, redeemed seamlessly as rewards through the app. All 40 of the venues currently up-andrunning on the app are in the Vancouver area, but within the next 12 months Glance is hoping to tackle the mobile payments space in other parts of Canada and the www.thecse.com | 13
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 4
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We have the person who probably has the most experience and success in the mobile payments sector worldwide as our co-founder and chief executive. —PENNY GREEN
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CEO & Co-Founder, Desmond Griffin
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US. It already has restaurants signed in British Columbia, Alberta, Saskatchewan and Manitoba and plans to launch in Toronto by spring 2017. Although the company is looking to move into new areas geographically, with over 3,500 restaurants in Vancouver alone, Green doesn’t expect a move into other sectors such as retail any time soon. “This is a huge industry and there’s a lot of room for us to grow, so it’s unlikely that we’ll go outside of the restaurant space because we don’t need to,” she says. “However, we are developing an extensive network of diners and restaurants which makes us an attractive target for alliances from many sectors.” As with every business it’s all about the money, and Green explains that the company recently engaged Echelon Wealth Partners Inc. as agent to undertake a brokered private placement. Glance also completed an Initial Public Offering through Leede Jones Gable Inc., raising C$1 million in September. GlancePay processed some C$56,000 of transactions in the second week of November and use has been growing at an exceptional rate since launch. To give investors some sort of benchmark, Glance estimates that each new restaurant it signs up—it’s averaging five a week at the moment—brings with it the potential to process another C$1 million of transactions each year. Even though the app will only take a small “competitive” cut of those revenues, the potential is obvious. But Glance isn’t just relying on transactions across its platform. The team realizes that once you have the audience, offering other features such as advertising and special promotions through the app to clients ups overall profit potential. Not surprisingly, Green is quite bullish about the sector as a whole, expecting payments on the go to help the world spend over C$2 trillion by 2020. “It won’t be long until mobile payments are the norm.”
fantasy 6 spor ts
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 4
Fantasy 6 Sports
Blending top technology trends to create own momentum in Big Data
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antasy 6 Sports (CSE:FYS) is a challenge to figure out at first because it is so cutting-edge you can’t think of any obvious comparisons to help put its business into context. A fascinating array of concepts to be sure, but how do you wrap your head around it? Best start with the broader theme and work your way down to the individual businesses, then consider how they fit together. By the way, we are talking about a company simultaneously shaping fields such as Virtual Reality, Artificial Intelligence, Augmented Reality, Blockchain and Big Data—only 5 of the 10 technology trends forecast to define the world’s digital landscape in 2017. At its most basic, Fantasy 6 leverages its capabilities in these technology segments to help brands take their consumer engage-
ment to the next level. “It doesn’t matter what type of industry you look at, data is driving decisions,” explains Ray Walia, Fantasy 6’s Chief Operating Officer and a 20-year veteran of the technology scene. “We are collecting data, we can anonymize it and it can drive decisions for other brands and corporations.” Sounds like any number of Big Data companies who passively collect data and try to re-sell it with some analytical bells and whistles to entities who need insight into their target customers, right? Here is where Fantasy 6 is different—this company generates its own data by interacting with a specific consumer base valuable to existing and potential clients. Because it collects data this way, its database is unique and proprietary. And it focuses on a very large www.thecse.com | 15
Originally published on Proactive Investors November 28, 2016.
By Peter Murray
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 4
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It doesn’t matter what type of industry you look at, data is driving decisions. — R AY W A L I A
and multi-faceted business sector that provides new opportunities for data collection and analysis every day—sports. A good starting point in exploring the product side is FansUnite, a platform Fantasy 6 acquired earlier this year and is in the process of turbocharging from both the user appeal and business potential perspectives. True to its name, FansUnite is a place where sports fans who like to bet on games come together to discuss strategies and try to develop an edge, or simply just learn more. “The idea is we are building a community around sports betting and sports predictions that adds a layer of direct fan engagement,” says Walia. FansUnite gives members a free virtual currency so that they can place bets without putting actual money on the line. It’s the perfect risk-free way to keep score and it gives you bragging rights if you’re good. More importantly for the platform, it separates the skilled from the newcomers and inspires serious discussions around strategy and upcoming opportunities. And for those who operate in the real-money betting world, FansUnite is a universe rich in sports and odds aficionados who can help give them an edge. Think you know better than everyone else what is going to happen in tonight’s game? Well, put your virtual money where your mouth is. The proprietary data side is well illustrated by shifting popularity among sports, and even the emergence of new competitive pastimes. “The most popular sport in North America for betting is the NFL, worldwide by far it is soccer, but the fastest growing one is e-sports,” says Walia. “The emergence of e-sports has caught a lot of people off guard. Having a site like FansUnite collecting 16 | www.thecse.com
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COO, Ray Walia
FansUnite
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 4
Football Fantasy Coach
all this data, you cut through the noise and the hype and people are actually seeing that there is active engagement worldwide.” By the way, e-sports is video gamers competing in organized competitions with games such as Counterstrike, League of Legends and other titles you may know. And don’t harrumph—these competitions fill stadiums with spectators. Mobile games and Virtual Reality (VR)/ Augmented Reality (AR) games are additional arrows in the Fantasy 6 quiver, the first commercial release being Football Fantasy Coach. As you might have already guessed, Football Fantasy Coach requires the player to analyze a virtual game scenario and call plays. As with fantasy sports, your choices are based on real players, with the game providing performance statistics that change in real time as actual games are being played. “It is a bridge of technology into the real world that directly engages the fan,” explains Walia. And it is one more way for Fantasy 6 to collect data for analysis alongside other sources to draw conclusions for client brands. It is not all just about online experiences, mind you. Some of the “immersive” work that Fantasy 6 does requires actual fan participation, such as when the team built a “dynamic 360 virtual arena” for one of the largest companies in Canada recently that enabled visitors to have their pictures taken and receive an image on their mobile phones that looked as if they were standing
at center ice in Toronto’s Air Canada Centre. Not quite the same as lining up to the right of Auston Matthews, but still pretty cool. “We maintain the right focus by keeping balance among these three verticals,” says Walia. “Each has synergies with the others but they all have different skills required to execute. The games division is going on its own with good partners and intellectual property, the data division is collecting data and it is a different audience that they appeal to. And then the immersive side is more corporate relationships.” And who does Walia think would be willing to pay the big dollars for high-quality sports data? “In context, our data is all around sports odds and so those who can benefit include any entity in gaming, casinos or sports books for a start. They will value the data one way, and then a sportswear company would have its own different use.” Fantasy 6 is well-funded to move forward with its plan, having received a convertible note facility in the amount of $10 million from fund Victory Square, which Walia, with partner and Fantasy 6 Chief Executive Officer Shafin Tejani, oversee. And unlike a lot of technology companies for which revenue always seems to be a “tomorrow” concept, Walia has made sure that sustainability is part of the corporate ethos. “The convertible note is designed to show that we have the wherewithal to execute, but a lot of the ideas we pursue
are intended to generate revenue and be self-sustaining. That is one of the reasons why we are able to tackle all three of our verticals at the same time. They leverage each other but drive revenue on their own and the teams sustain themselves.” The next six to nine months will see data continue to build, the games division debut new titles in different genres, and a big push on the immersive experiences side, with the lead role in a $1.5 million fan experience project for the BC Sports Hall of Fame in Vancouver a part of the effort. “We are putting ourselves in position to be a strong player in VR/AR and mobile games as well as sports data driven by artificial intelligence, which will be the long tail,” says Walia. “There will be huge value and opportunity around that. And we know that Virtual Reality is attracting attention and we can connect brands with this and other technologies to help them reach important objectives.”
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imagination park enter tainment
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 4
CEO, Gabriel Napora and Chairman, Colin Wiebe
Imagination Park Entertainment Originally published on Proactive Investors November 23, 2016.
VR booms for industry-savvy team and its low-risk approach to Hollywood By Peter Murray
I
n a world where corporations with big budgets toil night and day to eke out what often are mere single-digit profit margins, the idea of a company making modest, low-risk investments and generating swift returns of 1,000% or more seems fanciful. Such a company would have to operate in an innovative industry facing serious capacity constraints, and be one of the few groups holding the keys that unlock the potential to address them. Well, meet Imagination Park (CSE:IP),
18 | www.thecse.com
a young company that actually is on such a path, working in a realm that over time is likely to touch each and every one of our lives…virtual reality (VR). Imagination Park is home to a multi-talented team whose members have sold feature films, concepts, scripts and intellectual property to some of the largest entertainment studios in the world. It is a company that seems to have the business side of the industry figured out, pursuing a model that provides multiple chances to make excep-
tional returns while limiting financial risk to a minimum. How do they do it? They follow the money. “I am a film producer by trade and learned early on that the best money in film is not made in production or finance, but in intellectual property,” says Gabriel Napora, Imagination Park’s Chief Executive Officer. “Our mission is to create, option or purchase the most compelling intellectual property in the fields of film and VR.” More on virtual reality in a moment,
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 4
but to illustrate the power of ideas in the entertainment industry, consider a story Napora tells about one of his many successful projects. “Early in my career, I produced a project called Tetravaal with a young director on a budget of about $4,000. Tetravaal won the attention of the right people and ended up being the precursor to Chappie, which had a budget of around $70 million. But it all grew from an idea that originally cost only a few thousand dollars to produce.” Imagination Park brings substantial heft to its projects thanks to a team whose members include two highly successful producers— Napora, plus Imagination Park President Tim Marlowe who was the Executive Producer for The Lady in Number 6, which won an Academy Award. Colin Wiebe, a creative entrepreneur, digital marketing expert and musician who toured with the likes of rock legend Randy Bachman chairs the board of directors, which also includes producer and ace talent scout Yas Taalat. The top execs oversee a technical group on the special effects and virtual reality fronts that is second to none. This is a company ready to leverage technical and cost advantages to compete in a large and rapidly growing market for the products and services in which it specializes with an emphasis on 360 degree, 3D virtual reality content. “Netflix had a budget of around $6 billion last year, you can expect Amazon to match that or be higher, and HBO will have to do the same,” explains Wiebe. “With more and more people binge-watching on Netflix content gets consumed very quickly, so studios have to both be shooting around the clock plus looking outside their walls. But the fact is that there are only so many quality content producers around and only so many production facilities.” Imagination Park takes advantage of this growing supply/demand imbalance not only by producing films and other content, but
also with virtual reality services and more conventional production support. It does this in a clever way from a financial perspective, structuring agreements so they pay on both the front and back ends. “In film, and to some degree virtual reality, the riskiest thing is financing. No matter how smart you are, nobody can guarantee that a film is going to make money,” says Napora. “When we create, option or license intellectual property to present to major studios there is always an upfront fee paid by the studio before we go into production. In most cases, we also earn producer fees to move things forward. By the time the film goes into the world we have already made an exponential return, and if the film is successful we’ll make even more. So, our model is significantly less risky than one involved in actually financing films.” In the next few months the world will get to see a series of Imagination Park projects, including a full-length feature film starring Danny Trejo, several virtual reality pieces, and a full-length documentary. “We are close to having around 18 projects either created, optioned or acquired on our basic slate for 2017,” says Wiebe. A proof of concept is like a mini-trailer, but the intended audience is a studio or other entity who would purchase or financially support the idea. Imagination Park creates proof of concept packages for third-party filmmakers as well as for itself to market its own concepts developed internally. Napora’s Tetravaal production was a proof of concept. “Looking back, I have been able to sell about 50% of the projects I have been involved in to major studios,” says Napora. “I am not saying we will sell half of everything we are involved in going forward, but even if we were to sell three or four we would be a very well-to-do company. If we are right on two or three projects and they turn into hits, we become a major Hollywood player.”
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There are opportunities now that never existed in the past and they are there for the taking if you know the right people, have the right product, and have a team that can execute.
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—COLIN WIEBE
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THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 4
Gabriel Napora recently presented at the CSE Day Pitch Reception in Vancouver
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Our mission is to create, option or purchase the most compelling intellectual property in the fields of film and VR. —GABRIEL NAPORA
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On the virtual reality side, Imagination Park has created content soon to be for sale in virtual reality stores. It will also work with advertising agencies, and with film studios that have a new title ready to go but need virtual reality content online to help excite potential moviegoers. “Sales of virtual reality equipment have exceeded $1 billion and this is not even the beginning of the curve,” says Wiebe. “We are currently in discussions with some major corporations focused strictly on advertising. We have detailed proposals going out to major companies and see this as being the very start of something that will spark a huge wave of virtual reality service work for us.” The modest investment philosophy extends to all corners of the company, with the chairman saying it is important to stay lean and mean. “Nobody is getting big salaries. Everything is performance-based and we have specific budgets for travel and projects.” Virtual reality, proofs of concept, feature films and production work are enough to keep the Imagination Park team busy on its North American home turf, but China beckons as well. The Asian country is a huge and rapidly expanding market for feature films, and Napora happens to have both experience and connections there, plus an understanding of the types of concepts that sell to its unique audience. “There are opportunities now that never existed in the past and they are there for the taking if you know the right people, have the right product, and have a team that can execute,” says Wiebe. “It is like mining for movies. But ours is a mining project where you know in advance that the value is there. All you have to do is go and get it. The skyrocketing virtual reality trend has been an added surprise discovery that luckily we’ve been way ahead of. ”
I M A G I N AT I O N P A R K ENTERTAINMENT
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THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 4
true leaf medicine international
True Leaf Medicine International
Twins medical marijuana ambitions with growing line of hemp supplements for pets By Peter Murray
C
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Hip + Joint is for inflammation in older dogs, Calming is for anxious dogs, and Health incorporates antioxidants for general wellness support.
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—DARCY BOMFORD
www.thecse.com | 21
Originally published on Proactive Investors November 21, 2016.
anadian marijuana stocks have been some of the best performing investments of 2016, as the Liberal Government that came to power toward the end of last year made legalization of the drug one of its planks during the federal election. It is unclear, however, precisely what form legalization will take from the perspective of producers, as there is sure to be regulation and oversight when it comes to growing and distribution. Investment in a would-be producer is somewhat of a binary play—if a company obtains approval to produce under the current or any new regulatory regime, it has the potential to generate revenue and show investors that its management team can run a profitable business. If for whatever reason it does not get a green light to produce, then it’s back to the drawing board. True Leaf Medicine International (CSE:MJ) was an early entrant in the space, being the 48th company to submit a production application to Health Canada. But while highly confident that its application will eventually receive the government’s endorsement, the company has aggressively developed a related business whose early success has caught the attention of investors and removes some of the concern about ongoing sustainability. If Health Canada grants True Leaf approval to produce marijuana within the next year or so, it will essentially come as a very large bonus. Harnessing the spending habits of millennials when it comes to both their own health and that of their animal friends, True Leaf established a new division in
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 4
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Our product line is geared toward the millennial and baby boomer generations, which tend to appreciate natural ingredients and the value of nutritional balance.
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—DARCY BOMFORD
CEO, Darcy Bomford
autumn of 2015 to develop and market nutritional supplements for pets that contain hemp and other ingredients targeting specific health conditions. According to Chief Executive Officer Darcy Bomford, True Leaf sees annual sales in the True Leaf Pet division potentially reaching close to $30 million in five years’ time. “We know we can sell pet products today and there are no legal issues. We have a great product line and that is our focus,” explains Bomford. “We count zero revenue on the True Leaf Medicine side in our model, so any value attributed as we move through the various stages of Health Canada’s approvals process just improves our prospects.” Bomford knows of what he speaks when it comes to pet products, having spent some 25 years of his career to date in the manufacture and marketing of natural products for the industry. His previous company was purchased in 2012, which freed him up to work with True Leaf, and further to consider the pet food space once the non-compete clause in the transaction agreement had expired. “A lot of people don’t realize how big the pet food industry is until they get a dog—once you go to the pet food aisle or a specialty retailer, that is when you sense its massive size,” says Bomford. “Our product line is geared toward the millennial and baby boomer generations, which tend to appreciate natural ingredients and the value of nutritional balance.” Being in a big industry is great, but it typically means there is lots of competition. Fortunately for True Leaf, their products have 22 | www.thecse.com
clear points of differentiation. True Hemp Chews come in three different formulations: Hip + Joint, Calming and Health. “Hip + Joint is for inflammation in older dogs, Calming is for anxious dogs, and Health incorporates antioxidants for general wellness support,” says Bomford. “Each formula has a hemp seed or hemp seed oil base, and then we add other ingredients. Hip + Joint has natural sources of glucosamine from green lip mussel, and it also contains turmeric root, which is known to have anti-inflammatory properties. With Calming we use an amino acid from green tea call L-theanine, plus calming herbs such as chamomile and lemon balm. Health support has DHA, a form of Omega-3 from algae, and pomegranate.” True Leaf has gotten True Hemp Chews onto the shelves of approximately 500 retail outlets in North America so far. Next steps involve building out the line with new products and increasing the store count. Bomford sees the line extensions leading to larger order sizes from both distributors and individual stores. “We have an oil product that you pour on your pet’s food every day, and a stick format that covers the chewing function,” says Bomford. “Down the road we are looking at launching a veterinary line with higher inclusions of the active ingredients and a functional chew for cats that addresses joint health.” Moving quickly to make the most of its early-mover advantage, True Leaf introduced True Hemp Chews to the European market
mobi724 global solutions
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 4
MOBI724 Global Solutions
Providing consumer solutions at the frontline of the fintech revolution
Originally published on Proactive Investors November 24, 2016.
By Giles Gwinnett
W
e all know that shopping isn’t what it used to be since the arrival of smartphones and e-commerce. What you might not be aware of is that the payments, promotions and coupon landscape is also undergoing a seismic shift due to emerging technology. At the vanguard of this revolution is rapidly growing fintech (financial technology) company MOBI724 Global Solutions Inc. (CSE:MOS), which provides consumer services that weren’t available as recently as two years ago and is participating in an expanding global market that this year has an estimated worth of $10 billion. The company specializes in card payments and its core business, explained Chief 24 | www.thecse.com
Executive Officer Marcel Vienneau, is its card-linked platform, which when combined with digital marketing represents a new ecosystem allowing banks, merchants and customers to transact more efficiently with each other. Card-linked technology is transformative for credit card points programs, and in addition enables card users to receive a tailored stream of offers and promotions on their smart devices. To give a sense of scale, the company’s website says there will be just over 1 billion mobile coupon users by 2019, up from just under 560 million this year. MOBI724 also offers digital payments solutions.
“This type of technology simply didn’t exist two years ago,” said Vienneau. “We are selling our solutions primarily to card issuers or banks in different countries,” he adds, pointing out that the company has customers in Canada, Asia Pacific and Latin America. In the Canadian market alone it has 400 customers. “Most banks, anywhere in the world, have points programs where they issue points when you spend with their cards. Most of these cards enable customers to redeem points and get a reward,” he said. Perhaps the most significant aspect of MOBI724’s technology is that it has reinvented a clumsy, 20-year-old cost and payment structure, and thereby helps banks
THE CANADIAN SECURITIES EXCHANGE – The Exchange for Entrepreneurs | Quarterly Issue No. 4
CEO, Marcel Vienneau
“
The challenge for us is to go out there and tell our story. In time, this should lead to the market understanding our huge potential. —MARCEL VIENNEAU
”
to make more money from card transactions. Vienneau offers some examples of how the system worked in the past and how MOBI724’s better approach makes a difference. A credit card customer has been awarded 25,000 points for using his or her card and can therefore buy a product with a $250 gift card. The card-issuing bank bears the cost of producing a rewards catalogue and the shipping costs of any product bought. Now, say that a customer goes to an actual store and wants to buy a gift for $400 and include the $250 gift card value as partial payment. The current system is disjointed and the balance can be made up from cash, or another credit card, which might not be linked to the points system. Obviously, the customer doesn’t get the benefit of gaining more points. MOBI724 simplifies the process by bringing all the strands together. It links the credit card, which issued the points, with the gift card. A customer can make a payment with an app and it both acknowledges that the gift card has been used and applies the balance owing to the credit card that earns points. Similarly, when someone is in a store MOBI724 can send a coupon based on location or the customer’s profile, then the coupon can be used moments later at the cash register. The system can also send offers directly to a smartphone at any time, regardless of whether the shopper happens to be at a store or not. In the preceding case of the $400 purchase, the bank charges a percentage of the transaction value when the points are redeemed, and so does MOBI724. The bank also wins by avoiding the necessity of having to pay for catalogues and product shipping. “This is a new way to transfer a cost structure into a revenue-driven model, and it is seamless for the user and the bank,” said Vienneau. It also taps into the way people engage with their banks and financial institutions nowadays—namely, instead of going into branches and using ATMs, people are putting “plastic into phones” and want more personalized interaction. “Banks are losing their branding abilities but this gives them more channel opportunities,” Vienneau explained. MOBI724 has invested considerably in its “business intelligence” capabilities, which allow it to map out people’s past purchases, social media interests and other distinguishing characteristics so that it can target them with specific coupons and offers. “We are not just throwing everything at them,” said Vienneau. www.thecse.com | 25