The world of Canadian Small-Caps suffered in the back-half of 2019 with major sell-offs in Cannabis. Now that we are at the beginning of 2020, here are 3 small-cap stocks that are in Canada’s (and let’s be honest, the world’s) top performing sector: Technology.
These companies are not only tech companies because they all focus on an extremely significant issue: public safety.
Patriot One Technologies (TSX: PAT)
Patriot One specializes in covert threat detection in public spaces with the objective of reducing mass casualty events. Their PATSCAN platform is a network of Radar, Video, Magnetic, and Chemical sensors that detect threats in public spaces all with a software overlay to coordinate everything. What is particularly interesting about the PATSCAN platform is that the sensors are non-obvious and non-intrusive in active spaces. According to CEO Martin Cronin “...Our philosophy of detection is that people should be able to go about their business unimpeded and not have to go through thick security checkpoints to be wanded, padded down, every time they go into a hotel or a shopping mall or anywhere where the public may be at risk of acts of violence.”
Patriot One currently has 12 active re-sellers globally and over 9,000 prospective reseller and end-user clients in their sales pipeline. In 2019, Patriot One expanded into the world of Artificial Intelligence in order to bolster their PATSCAN platform. In October of 2019, the Company introduced their PATSCAN VRS-M (Mobile) solution in partnership with the University of North Dakota Police Department. The VRS-M device is designed to prevent ambush attacks on officers by detecting threats in real-time.
(Pictured) A visualization of the deployment Patriot One’s PATSCAN platform. (Source)
Casualty events like mass-shootings and terrorist attacks have become a major concern in recent years with 2017’s Las Vegas shooting that resulted in 58 casualties and MGM agreeing to pay up to US$800M to victims.
Patriot One’s target end-customers include governments, events, hotels, retail, and large companies looking to provide more secure spaces for their guests and staff. In the Company’s “2019 Recap & 2020 Outlook” video, CEO Martin Cronin noted that important priorities for Patriot One in 2020 include: platform deployment and revenue generation as well as international regulatory approvals and IP Protection.
The Company’s partners include Raytheon Canada, IBM, and NATO’s SPS programme.
Sources:
Patriot One Technologies Corporate Presentation: https://mk0patriot1techaqf19.kinstacdn.com/wp-content/uploads/2019/11/Patriot-One-Corporate-Presentation.pdf (Accessed: Jan 10, 2020)
CBS TechRepublic: PATSCAN platform detects hidden weapons, chemicals, and bombs: https://patriot1tech.com/in-the-news/cbs-techrepublic-patscan-platform-detects-hidden-weapons-chemicals-and-bombs/ (Accessed: Jan 10, 2020)
2019 Recap & 2020 Outlook: https://patriot1tech.com/media/videos/2019-recap-2020-outlook/ (Accessed: Jan 10, 2020)
A2Z Technologies Canada (TSX-V: AZ)
A2Z Technologies is a recently public company with a 30 year track-record working with the Israeli Ministry of Defense, IDF, and other government organizations. The Company conducts R&D in the military robotics space and a significant portion of their business is service and maintenance based.
A2Z has been an Israel Ministry of Defense contractor for over 30 years and in that time, has developed many innovative solutions that have protected the lives of Israel’s military and civilian populations. Their customers include the IDF, Israeli Police, Israel Railways, and the Israel Electric Company (IEC). The Company’s military technologies include unmanned robots designed for counter-terrorism, bomb-defusal, and firefighting.
(Pictured) One of A2Z’s Bomb-Defusal robots being used to help the Company open the TSX Venture. (Source)
Following A2Z’s recent listing to the TSX Venture, the Company has detailed plans to commercialize their military technologies and expand into civilian markets. One of these products is their Fuel Tank Intelligent Containment System (FTICS). The FTICS is installed into a vehicle’s gas tank and deploys alongside the airbag in the event of a collision. The system releases a chemical mixture into the gas tank that causes the fuel to become non-flammable, reducing the potential for fire to spread, keeping drivers and emergency responders safe.
While vehicle fires resulting from collisions are somewhat less high-profile than mass shootings and terrorist attacks, according to the NFPA, in the U.S. during 2018, there were 490 civilian deaths, 1300 injuries, and US$1.4 billion in property damage as a result of highway vehicle fires. By comparison, in 2018, there were 371 casualties and 1336 injuries from mass shootings according to data from the Gun Violence Archive.
FTICS movie v1 from A2Z Technologies Canada Corp on Vimeo.
The Company’s potential customers for their FTICS product include individual consumers, auto manufacturers, governments, commercial vehicles, first responders, and any vehicle that carries flammable fuels. The first purchase orders will likely come from Israel’s government institutions as they have been working with institutions like Israel’s Ministry of Defence and the IDF for over 30 years. This represents a significant opportunity in that market alone.
The company recently listed on the TSX Venture Exchange via RTO on December 23, 2019.
The CEO, Bentsur Joseph, has a ~64% ownership stake in the business with 30,000,000 shares subject to an escrow agreement.
Sources:
CEO Bentsur Joseph Provides Corporate Update to A2Z Technologies Canada Shareholders
https://www.accesswire.com/572560/CEO-Bentsur-Joseph-Provides-Corporate-Update-to-A2Z-Technologies-Canada-Shareholders
Fire Loss In The United States During 2018 (NFPA): P.9, Table 6.
https://www.nfpa.org/-/media/Files/News-and-Research/Fire-statistics-and-reports/US-Fire-Problem/osFireLoss.pdf
Mass Shootings in 2018 (Gun Violence Archive):
https://www.gunviolencearchive.org/reports/mass-shooting?year=2018
First Responder Technologies (CSE: WPN)
First Responder Technologies’ has two main product lines: Detection and Response. The Company’s current focus on the detection side of their business is on the development and commercialization of their WIFI-based concealed weapons detection technology. On the response side of their business, they are developing a short-acting pepper spray as well as a first aid product.
The Company believes that their WIFI-based detection technology has advantages with respect to costs, mobility, and the public perception around potential health consequences. They note that since WIFI operates on an unlicensed spectrum, regulatory approvals are potentially faster and simpler which could result in faster commercialization of their detection technology.
As of the Company’s November 27, 2019 MD&A, First Responder’s products are currently in development with the Company, hoping to begin generating revenues in the 24 months following the completion of their IPO. The Company notes that both their WIFI-based weapons detection technology and their short-acting pepper spray are patent pending.
First Responder’s primary target market is in their name: First Responders. This includes police, military, paramedics, and other organizations for whom detecting weapons is important.
Sources:
“First Responder Technologies Inc. Management’s Discussion and Analysis For the three months ended September 30, 2019. Prepared as of November 27, 2019”: https://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00045595
WiFi Concealed Detection Device (First Responder Technologies): https://www.firstrespondertech.com/concealed-weapons-detection-products/
Market Opportunity (First Responder Technologies): https://www.firstrespondertech.com/public-security-market/
FULL DISCLOSURE: A2Z Technologies and First Responder Technologies Inc. are paid clients of Stockhouse Publishing.