With secular tailwinds in asset management and IoT averaging a CAGR w a mid teen growth rate out to the foreseeable future with business models to support these industries with a SaaS structure creates an opportunity to explore. 
 
All of these smaller cap companies in this space have been hit hard in 2018 even though they keep growing. (TRAK.V TKX.V OEE.V BEW.V) On a price to sales basis these names are starting to get cheap I am real long TRAK.V because I feel it’s a special situation with regulatory tailwinds as well.  
 

More importantly; TKX.V earnings on Monday
 
I saw that press release of earnings coming out a month before they did last year.  I feel they tipped their hand on their Q1 CC about cash on hand on Mar 1 of $900K vs Dec 31 $750k.  When asked on the call management stated sales have been good as large contracts are being worked through BULLISH!!! If this cash generation is real and just not a timing anomaly with receipts and disbursements this could be the inflection point.
 
I have stayed away from the name looking at the balance sheet thinking they were being forced into a capital raise at a 52 week low because I had them at a cashburn rate of $500k/quarter for 2018. This name could explode higher as people flood back into it. It would be the only small cap enterprise IoT name in Canada that could be EBITDA positive by the end of this year.
 

Capital Structure
 
There is a massive air pocket to the upside created by the 1M share outstanding agent options at 0.38/share and shares issued for the Broctech acquisition last year at 0.38/share as well. On the warrant side of 7.5M outstanding with a avg price of 0.52/share. So, this leaves 35% and 80%+ upside respectively until we run into any natural sellers.  
 
The question becomes, how long can they hold out without doing an equity raise and buy time to grow their core business before they dilute existing shareholders. I have a suggestion. Silicon Valley Bank
 
TRAK.V a comparable enterprise IoT name of comparable size but with a slightly better growth rate in February got a $4.5M credit Facility at prime plus 1.5-2.0% from Silicon Valley Bank.
 
If TKX.V could get amazing terms like that, it could take the financing risk off the table for 2018 and this stock would fly.
 
I will leave you with one key point from their Q1 CC. If they were just to continue to roll out product and services from existing client base and pipeline management stated that would result in a 30M run rate revenue business. You put a 4x SaaS sales multiple on that business and you get a value of 120M relative to the current market cap of TKX.V of 20M. That is 500% upside if they execute over the next 3-5 years.
 
Personally, I think this company gets bought out. The Denso Products and Services North America partnership was the first step. A 55B CAD market cap company signing a partnership with a 20M market cap company in a strategic growth sector.  If they can demonstrate the strategic value and fit it gives Denso instant access to many major Fortune 500 companies that TKX.V is already working with.  A quick 50M dollar deal for Denso would be a drop in the bucket. A strategic equity investment would work too.
 
If Q2 looks good Monday creates a great buying opportunity for a quick 2 step buy between TRAK.V and TKX.V for getting exposure to one of the fasting growing industries in tech.  No way both of them make it 18 months without M&A activity.
 
 
ON THE RADAR