Clarus Securities Inc.

What's Happening at Clarus...

Brock Winterton

  • A busy start to the year had Clarus lead or co-lead 3 transactions in January and co-manage another 2 raising a total of $303 million. (2/20/2018)
  • We recently initiated coverage of BeWhere Holdings (BEW $0.47). This young but experienced IoT telematics company is disrupting the market with its use of very low cost, next generation, low power cellular modem (LTE-M and NB-IOT) technology. We expect BeWhere to add several hundred thousand active subscribers over our forecast period. Buy with a Target Price of $1.00. (1/30/2018)

Remaining At the Centre of Key New Industries

Brock Winterton

The evolving market focus on cannabis related companies translated into several lead, co-lead and manager roles including two lead roles for Aphria Inc. raising over $200 million supporting its aggressive growth plans and a co-lead role for MedReleaf in its $100 transaction to also support a build-out of capacity.  We also helped Liberty Health Services with its roll-out of production and dispensary services in the Florida medical market.  In all, we raised over $350 million in 5 transactions for cannabis related companies in Q4/17 and early 2018.

As a continuation of our special situation coverage focusing in the US healthcare industry, we completed an IPO for Akumin Inc., an outpatient imaging centre consolidation story that has considerable opportunities for growth.  Also in the special sit area we led a transaction for QYOU Media, a company accessing massive international markets with its curating and packaging of web content and newly evolving e-sport content.

Blockchain related companies also developed a following and Clarus nimbly participated in the space with its involvement with LeoNovus, a cloud solutions provider using blockchain technology, as well as having supported the growth of Global Blockchain Technologies Corp.

Traditional sectoral coverage also played a role as Clarus led two, co-led one and co-managed one transaction in the gold sector including one for a West African gold developer, two for US focused companies and one for a Canadian focused company.

  Issuing Company
$ Millions Raised
Lead
Co-Managed
  Aphria Inc.
$115
  Aphria Inc.
$92
  MedReleaf Corp.
$100
  Nuuvera Corp
$22
  Liberty Health Services
$23
  Akumin Inc. (non-raise IPO)
$2
  QYOU Media Inc.
$6
  Leonovus Inc.
$14
  Global Blockchain
$43
  People Corp.
$25
  Cardinal Resources
$12
  Aurelius Minerals Inc.
$3
  Lucky Minerals Inc.
$3
  Pershing Gold Corp.
$15

Execution Remains Strong in Q2/17

Brock Winterton

During a quarter where agency trading just got more challenging, markets also saw several financings fail to fully sell. Fortunately, Clarus continued its successful capital raising activities including executing some sizable IPO’s.  In total, we raised $503 million in eight transactions of which we were lead or co-lead in six.  Noteworthy, four transactions were of $80 million or more. Three transactions raised $245 million of new equity in the cannabis industry taking our 2017 total to 8 transactions and $326 million of new equity.  In the last year, Clarus has raised $501 million in the cannabis space. Three transactions in Q2/17 totaling $98 million were completed in mining, one $80 million transaction was done in the oil and gas space and one for $81 million was done in the Special Sits space.

  Issuing Company
Capital Raised
Lead
Co-Managed
  Alio Gold Inc.
$58.7
  K92
$16
  Park Lawn Corp.
$80.5
  Med Releaf (IPO)
$100.7
  Aphria Inc.
$84.5
  Cardinal Resources
$22.8
  DFMMJ (IPO)
$60
  Leucrotta Exploration
$80

Adding Value

Brock Winterton

Clarus is an idea shop.  We don’t cover all sectors and we don’t cover all the names in a space.  By being very select in a sector, we try to deliver the best ideas that generate the best absolute returns to investors.  We have been helping our clients with ideas like these lately:

  • We got involved in the medical marijuana space early, some 2 ½ years ago, and have delivered extraordinary returns to investors by way of names like Aphria (APH), our first idea in the space in July 2014 had an equity value of $41 million (share price $0.78/sh) and is now $750 million (recent price $6.70/sh). We have been publicly involved with multiple cannabis related companies and have become a go-to player in the emergent space.

  • Our mining group has been outstanding at generating ideas like: Endeavour Mining, a deep value turnaround story, whose market cap when we initiated in February 2015 was $223 million ($5.40/sh) at writing was $2,374 million ($25.39/sh) ; Golden Predator (GPY), a new exploration play in Canada’s Yukon that is proving up a potentially major new play and Cardinal Resources (CDV-ASX) which is delineating the large Namdini play in Ghana.

  • In special situations we identified: CRH Medical, a gastrointestinal company in early 2015, trading at $3.62/sh ($250 million) it recently surpassed $11.00/sh (equity value $800 million); Polaris Infrastructure, a geothermal energy turnaround and growth story, in January 2016 traded at $8.05/sh ($125 million) and recently traded at $14.30/sh ($225 million) having traded as high as $18.80/sh.

  • Our focus on oil and gas explorers like Leucrotta Exploration whose recovery from $0.83/sh (EV $98 million) to a recent $2.40/sh ($354 million) or Yangarra Resources trading from $0.48/sh ($85 million) in January 2016 to a recent $2.64/sh ($276 million), have strongly outperformed the sector because they are not commodity price calls but fundamental reserve growth stories.

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