Reviving an old series based around who’s doing deals downtown today, this is today’s Friday recap on who I’ve been chatting with over the past week.
And as you’ll see… I really am quite tired.
AVIVAGEN (VIV.V): “ANTIBIOTICS! STEP AWAY FROM THE COW”
What a great catch-up. I first talked to CEO Cameron Groome and financing wheeler-dealer James Beesley about Avivagen back in 2014, when the company had just hit upon a technology to oxidize beta-carotene in livestock food and had a plan to take that to market. The bonus was, the beta-carotene had the potential to make antibiotics unnecessary in animal food.
This would be huge because it SUCKS that almost all of our proteins are force fed antiobiotics for every day of their lives because they’re packed in crappy conditions and pick up bugs and parasites and infections to the point where it becomes cost effective to just have them continually dosed.
But antibiotics aren’t supposed to be used that way. It leads to infections that are antibiotic resistant, it passes through to us, and it weakens the animal.
So Avivagen, back then, had some work to do. They had clinical trials to run to prove their tech worked, establish how well it worked, and how it would be best administered and how much growth in the animal or added health it would deliver.
And some of that testing needed to be done by potential buyers of the product.
CEO Groome has put so many frequent flyer miles on his card over the last few years, that there’s not a destination on the planet he could spend them all on.
I didn’t think, back in 2014, that Avivagen would make it. Lot of shares out, low share price, balance sheet that looked like my home budget, product that was looking at a long process to become monetizable.. and it’s Vancouver, so you always assume every deal is clunky until it proves otherwise.
Avivagen has proved otherwise. I turned around for a moment, and when I looked back, it had tripled. Groome tells me he didn’t see much of our summer, what with the meetings with Asian livestock companies that have heads of cattle into the billions, and publishing studies in scientific journals, and registering a litany of patents, and – oh yeah – raising $5 million, much of it from insiders.
You know that thing where you ask a CEO a question and they really want to just blurt out something they think is awesome and they know you’ll think is great and then you’ll both jump up and down doing the Happy Potato dance – but he can’t, because it’s not public yet?
That. Avivagen is in play. You may have missed the first tripling of this stock, but I suggest you give it a good long look, because quite honestly, I can’t find anything close to risk in this play right now. and I can ALWAYS find risk. Risk and I are brothers from another mother.
LOTTO GOPHER (no ticker): “SHUT UP AND TAKE MY MONEY”
They got on the plane. They landed in Toronto. They lined up the brokers and institutions. They demonstrated their concept. And the powers that be said, “We are in. We are so in. Where do we send the cheque?”
And the answer was, we’ll get back to you.
Vancouver financiers are well familiar with the shell company bait and switch, where you have a company that wants to RTO and you do all the due diligence and you move forward to the financing and then you talk to the exchange and everything’s set to go and… some d-bag connected to the shell decides they want to change the terms. Yeah.
Thankfully, there’s no shortage of alternate shell companies around, so the delay will be minimal, and that’s good because this deal is bonkers.
Have you ever stood behind a senior at the 7-11, and he’s got 18 scratchies and 4 Set For Life’s and he wants 6 Lotto 6/49’s and he’ll take some Pall Mall while he’s at it, and…
In California, this problem is a pandemic. Because the only way to buy a lottery ticket is to line up at the bodega behind the homeless guys and the seniors and the woman with the purse full of pennies that she’s using to buy milk, and Sally from accounting who is handling the syndicate lottery purchases from the gang at the local insurance office.
No. Just no.
So LottoGopher has been set up to do something very hands on that a lot of people are more than happy to pay for; they’ll stand in line so you don’t have to.
Yes, they’ve hearkened back to the good old days of the early internet when startups were built around the idea of ‘I’ll go pick up some milk, a sixer, some Hustlers, and a biryani, and deliver it all to your door at 3am.’
Only they’re doing it with the lottery.
For a small fee, you can use their site to buy your ticket, check your ticket, talk with the gang at the office about your syndicate, and never have to go near that bodega again. A few weeks back, they made their site live and, with no announcement, no marketing, no advertising, 1200 people signed up and bought tickets.
They’ve been given the royal shrug by the California lottery regulators, who say they’re not doing anything illegal, and though they’re not actually standing in line at the Gas and Sip to check 1200 tickets at a time while you wait to buy a Slurpee, they do have arrangements with lottery vendors to process scads of tickets after hours.
It’s going public and soon. Eyes open, powder dry.
EMBLEM MARIJUANA: FINALLY SOME VALUE IN AN MMPR
Emblem Marijuana is raising money to turn what used to be Kindcann into the next big thing. Their raise has been a battleground of people wanting in, and some big players are involved.
I spoke to them briefly last week about their plans and liked what I saw, but that’s the last I’ve heard of them since. I assume all is well and certainly the weed sector is enjoying a burst of share price surges, which will make this one all the better value when it lands.
I’d tell you more, but I have no more to tell.
HEALTHSPACE (HS.C): WE KNOW, IT’S BEEN A WHILE, BUT…
Good old HealthSpace (HS.C) is a company I’ve talked about for a while, and it disappoints me to see where the stock is sitting after a good amount of time to get things rolling.
The company provides software for health inspectors to more accurately, securely, mobilely (I know that’s not a word, shut up) and conveniently record health inspection data, in a way that can then be used to sell as big data.
It works. They have customers. They have government contracts. But they haven’t progressed, at least as far as the public is concerned, in a year.
Contracts keep rolling in, but they’re small and not the sort of deals that propel stock.
I said all this and was nodded at by those at the helm. They know. They feel the same way.
They had some growing pains, it’s taken longer than expected to get some big deals locked down, the big data element has dragged… they know.
But they’re planning an expansion burst soon, with marketing in Europe, and they’ve managed to lose some toxic debt by raising money and switching their interest rates down from 18% to 10%.
Is it time to jump on HS yet? Meh. Not yet. But I suspect, with the value at the current stock level, there’s going to be a nice jump on point in the weeks and months ahead.
PEEKABOO BEANS (NOR.V): RUBBER HITTING THE ROAD
The going public of PBeans is nearly upon us. CEO Traci Costa tells me she’s get her preliminary listing and will be good to go shortly.
I must say, of all the companies I’ve written about this year, this one has generated the most contact from readers. I suspect what’s attracting folks is the existing business, the non-traditional sector (for this market), and that a lot of folks have bought the product for their kids.
Costa tells me she’s expecting profitability in 2017 and the money she’s raised in going public gives her runway til well beyond that, even while in growth mode.
New catalogue due out soon.
ARCTURUS GROWTHSTAR TECHNOLOGIES (AGS.V): “FEED ME, SEYMOUR!”
After I mentioned Arcturus Growthstar Tech in my weekly Vancouver Is Awesome investing column, the stock jumped 16%. Today, it’s up another 19%, putting it at $0.125, up from $0.9 Wednesday.
I’m not going to say it was all my audience, but the stock’s been between $0.08 and $0.10 since it debuted, so that’s a nice launch.
Arcturus is running vertical farms (or seeking to) using Terra Sphere tech under license, while also selling LED lights it developed to cannabis growers, so it’s got enough touch on the weed space to get some lift from that, all while proposing to be a very serious player in the food security space, which I think has big bundles of potential.
SPARK (no ticker yet): CANADIAN TECH DONE RIGHT
A big claim to make? Sure, but Canadian tech has a tendency to be done in the stupidest ways possible, so doing it right is significant only in that it happens so rarely.
Spark is a CRM system for real estate developers. “What’s the brilliance in that?”, I hear you say. Well, that industry, as rich as it is, as big as it is, as all-encompassing as it is, works largely off excel spreadsheets and Mailchimp forms. Same as it has for decades. It’s an industry that has been doing so well without any help that it hasn’t sought any to get better productivity out of its systems.
Nobody, yet, has bothered to put all the tools needed by a company that is going to spend the next four years developing, pre-selling, showing and selling new real estate, into one clump.
Think about it – when a company decides to put up a condo development, they need to outline all the documentation for each property, the different floor plans, amenities, upgrades, they need to track interested parties, develop leads, do their marketing, plan out open houses and tours, track which lead likes which property, see data relevant to what marketing is working and what isn’t, they need to know which sales guys are asleep on the job and which aren’t, they need to know at what stage in the purchase process a potential buyer is, and who their realtor is, and that they want the mahogany wall trim instead of the pine.
Software to track all this, god’s honest truth, didn’t exist in the world a year ago. Today, it exists in Vancouver, out of a company that emerged from Gastown’s Growlabs incubator, called Spark.
The Spark team are led by Simeon Garratt, a guy who has spent his career selling North American property to Asian clients, cranking through dozens of condos per week, racking up the air miles and doing business with all the companies he now wants to sell to.
Which is probably why four of the top ten real estate developers in New York, and many of the biggest in Vancouver, currently use Spark. And why it’s profitable today, barely a year after emerging as a serious product. And why it’s not going to RTO on the public markets, it’s going to legit list as a tech IPO, likely in Q1 of next year.
I hate a deal where I can’t find a weakness, because usually those guys have been picked apart by the finance world and the little guy gets no value. But this time, if you want in early, just get in on the IPO, which will be raising money to scale the thing and widen internationally.
I’ll be talking about it more in the weeks and months ahead but, for now, just know it’s in my ‘holy shit’ category.
NATURALLY SPLENDID (NSP.V): “HI, REMEMBER US?”
Talked to the NSP guys for the first time in months yesterday, and they’re a little bit chuffed at their most recent financial numbers. Knuckleheads who trade in and out of the stock every time it farts continue to depress their share price, but you can only keep those numbers down so long.
I’m going to be meeting them again next week to talk about the future, and I’ll share details in this space accordingly.
The state of the Equity.Guru union is STRONG, kids. Our recent move to providing content to Vancouver Is Awesome’s readers, showing them how investing in local companies makes sense when there’s no risk you’ll need to pay for a mortgage any time soon, has hit a chord.
I have received and answered much email, many tweets and Facebook posts, and a surprising number of text messages (how did you bastards get my number?) from people who came here via VIA, and our traffic numbers are blasting off.
The number of calls I’ve had from dealmakers in the last week has been extraordinary, so I’d expect news about some new site sponsors soon. In the meantime, we’re expending both in terms of media partnerships and warm bodies around the office.
You’ll have seen Todd Aalgaard’s piece on Tommy Humphreys last week – he’ll be doing more in the weeks ahead. Mark Dankle is back and grinding out his pent up aggression on bad OTC companies. I’ve got other writers working through assignments you’ll see next week and beyond, and our long awaited newsletter will kick off next week with my ‘big boy pants’ weed play.
Readers of the VIA column will know I invested a little cash in Persephone Brewing through the FrontFundr private equity portal, which was an experience that was decidedly painless – at least as painless as it can be, considering you have to scan ID and… anyway. I’ll be tracking that and covering a little more of the private equity space as a result.
Finally, we’ve done a deal with Stockhouse (my former employers) in which I’ll be covering some of their clients for them in return for front page time for my own clients, which means the Equity.Guru brand is now seen not just here and VIA, but in six other media outlets, giving us access to just under two million unique visitors per month across all properties.
Equity.Guru is a contender. Time to throw some elbows.
–– Chris Parry
FULL DISCLOSURE: None of the companies mentioned above are sponsors of the site, nor am I a consultant to any of them, nor do I own stock. All of these things may change shortly, however, as they achieve milestones going forward. Companies that would like to be considered for sponsorship programs through Equity.Guru are advised to contact us quickly, as we have limited capacity over the coming months to take on more deals.Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.