The Canadian spirit of innovation is manifest in some emerging TSX Venture and CSE companies. With 10-bagger performance in some cases, and in others, still under the radar, these companies have the potential to be game changers in their respective fields.
Here’s the Midas Letter list of top ten (publicly traded) technology companies in Canada (not in any particular order:
1. *Verisante Technologies Inc. (TSX.V:VRS) (OTCMKTS:VRSEF) is a British Columbia based developer of the Verisante Aura™ for skin cancer detection and the Verisante Core™ for lung, colon and cervical cancer detection. The Aura is already approved for sale in Canada and the European union, and China and the United States will soon follow. The cancer detection platform was developed by the BC Cancer Agency and the University of British Columbia and tested and refined on approximately 1,000 lesions at the Skin Care Centre at Vancouver General Hospital.
Verisante has begun building an international sales force, and according to CEO Thomas Braun, targets sales of “$1 million per quarter” by the end of 2015. If these technologies become industry standards in the United States and China, that number may seem puny in comparison actual sales. Thomas joined me for an interview and CEO podcast in April which you can listen to here.
2. RepliCel Life Sciences (TSX.V:RP)(OTCMKTS:REPCF), as its name implies, is in the biotechnology space of cell repair, replacement and regeneration. With applications as diverse as treatment for chronic tendon injuries to baldness, the company has the exclusive rights to market its products in Japan, China and South Korea. The concept of the technology is that Replicel uses cells isolated from a patient’s own healthy hair follicles to address specific cellular deficits.
The company is in the process of raising a targeted $7.5 million in a brokered private placement offering a share for $0.75 with a two year warrant at $1.00. The company reported a loss of $28,572 on revenue of $4.1 million, compared with a loss of $3.4 million on zero revenue in 2012. That is certainly movement in the right direction, and it will be sales of products in Asia that will drive the bus forward in 2014. An audio interview with CEO David Hall will be broadcast on Midas Letter’s iTunes CEO Podcast Channel next week.
3. *Theralase Technologies Inc. (TSX.V:TLT)(OTCMKTS:TLTFF) has a dual value proposition as well. The company uses low level lasers to treat pain and has successfully treated over 1 million patients so far. The other value driver is cancer therapy that has so far proven to demonstrate 100% efficacy, with zero side effects and zero percent instance of recurrence (so far in mice). Using a class of drugs called Photo Dynamic Compounds, these revolutionary drugs destroy cancer cells when activated by calibrated laser light sources.
According to a recent press release, “new research scientifically proves that Theralase’s patented PDC technology can be activated by Near Infrared (NIR) laser light destroying cancer cells that reside deep into tissue, providing a higher kill rate in a single Photo Dynamic Therapy (PDT) treatment, than previously possible, setting a new standard in the industry. The scientific and medical community considers the research pivotal because the Theralase PDCs are able to provide a solution to a problematic issue in cancer treatment, the ability to destroy cancerous tumours via PDT deep into tissue.” Listen to an interview with CEO Roger Demoulin-White here.
4. POET Technologies Inc. (TSX.V:PTK)(OTCMKTS:POETF) is revolutionizing integrated circuit design through the use of “planar opto” electronic technology on gallium arsenide chips. The result is an integrated circuit that delivers improvements in power efficiency up to 90x and enhancements in clock speed to 100x. Imagine a computer with 10 ghz chip speed that uses one tenth of the current power. This is the next evolution of the technology as predicted by Moore’s Law, which states that “the number of transistors on integrated circuits doubles approximately every two years.”
POET has no sales as yet, but the stock has appreciated by 400% in the last six months as investors eagerly await the execution of deal with any of a handful of megacap technology firms that would essentially provide the commercial “proof of concept” which is all that is missing from this micro cap gem. Listen to a an interview with CEO Peter Copetti here.
5. Sphere 3D Technologies (TSX.V:ANY) (OTCMKTS:SPIHF) has developed a platform that enables any software to run on any device or operating system. The company’s Glassware 2.0, as the product is called, delivers
virtualization of many of the most demanding applications in the marketplace today; making it
easy to move applications from a physical PC or workstation to a virtual environment either on
premise and/or from the cloud.
This is another company with no sales so far and whose market valuation, which currently hovers in the neighbourhood of $200 million. Frankly I can’t understand why the valuation and its technology is esoteric to say the least, with a value proposition that strikes me as modest at best. That being said, I will be conducting a CEO Podcast with the company’s president, Peter Tassiopolous later this week, and I’ll see if I can begin to wrap my head around what’s got Pinetree Capital sufficiently intrigued to buy 12% of the company if it exercises all options and warrants. To see Pinetree buying stock in the market at this high valuation is a very bullish signal in my mind as the fund is not known for making foolish wagers.
6. Gener8 Media Corp. (CSE:GNR) (OTCMKTS:GREMF) has a three-pronged investor value proposition that combine to give investors a diversified shot at three distinct business lines. First, the bread and butter of the company is its 3D movie conversion business whereby the company converts Hollywood blockbuster franchises like Harry Potter and Spiderman into 3D versions. The second business line is a software platform that is derived from its experiences moving and managing the huge volumes of data associated with 3D movie rendering.
And the final prong is its majority ownership of Reelhouse Media Ltd, spurred by its partnership with Sundance, its participation in Warner Bros.’ Media Camp Accelerator Program and the distribution of top-tier Warner films including Gravity, The Great Gatsby and Man of Steel.
7. Urthecast Corp.(TSX:UR) (OTCMKTS:LFDEF) has two cameras attached to the International Space Station and proposes to “democratize the observation industry” and support scienti?c research in ?elds such as cartography, phenology, and Geographic Information Systems. In the simplest terms, it takes photos of earth from space. According to its press releases, “UrtheCast’s cameras will provide Ultra HD video and still imagery of Earth that will allow for monitoring of the environment, humanitarian relief, social events, agricultural land, etc. How the company makes money is the big question though, and obviously I’m not the only with that thought, as the company has been range bound between $1.22 and $2.90 since it became public via reverse takeover on June 27, 2013.
CEO Scott Larson is going to join us on Midas Letter CEO Podcast later today to shed some light on the company’s business model and how its going to make money. Certainly the prospect of anyone being able to access a camera on the space station to take selfies from space is compelling. The question is how much traction will that achieve in the nano-second attention span of 21st century human beings?
8. Tinkerine Studios Ltd. (TSX.V:TTD) is a pure play 3D printer manufacturer based in Vancouver that is Canada’ first (and at this point, only) 3D printer hardware and software company. Founded by Eugene Suyu a mere two years ago, the company at this point has very modest sales from a line of 3 models of printers which, at the very least, are super sexy designs.
CFO Martin Burian stated in a recent interview that the company will seek to re-invest any profits for the forseeable future, but does target profitability from steadily increasing sales by 2015. For a snapshot of what the future of a Tinkerine investment could look like, one need cast one’s glance across the border at 3D Systems Corp., the $5 billion gorilla in the space that has been around since the 80′s and controls the lion’s share of the market worldwide.
9. FLYHT Aerospace Solutions Ltd. (TSX.V:FLY)(OTCMKTS:AMSLF) is the manufacturer and vendor of the AFIRS (Automated Flight Information Reporting System) that very succinctly prevents aircraft from going missing. Though not something that one would have thought would be a problem in 2014, Malaysian Airways Flight MH370 changed some minds about that. More than just a location system, FLYHT’s suite of technologies provides ground crews of commercial airlines advance information about aircraft condition while in flight through satellite communications.
The technology is approved for use and OEM installation across most makes and models of modern commercial jet liner, and typically pays for itself within 12 months through cost efficiencies realized through its use. The company is slowly making inroads into commercial airlines companies worldwide, and the latent effect of MH 370′s disappearance will likely boost industry-wide adoption rates.
10. NXT Energy Solutions Inc. (TSX.V:SFD) (OTCMKTS:NSFDF) has a stock symbol that reflects its technology, not its name. Stress Field Detection is the science by which gravimetric anomalies and poro-elasticity are measured from aircraft to identify the location of hydrocarbon reservoirs in the earth’s crust. The technology has a perfect track record and has been used by National Oil Companies such as PEMEX and EcoPetrol to successfully find oil.
The mega-catalyst for this stock is increasing adoption as oil reserves continue to deplete and finding oil gets tougher and tougher. Considered a ‘first pass’ prospecting tool, the technology can reduce the cost of discovery dramatically by indicating best shot targets for vastly more expensive 3D seismic. Could one of the super majors like Exxon Mobil, Chevron, BP or Shell take this company out at some point? I think there’s a reasonably good possibility of that. Check out a video interview I did with CEO George Liszicasz at Reuters studio in Times Square in New York.