the hottest technology companies in canada

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Institutional Equity Research

Industry Update

June 06, 2013 Technology Hardware

The Hottest Technology Companies

In Canada 30 Public And Private Companies Investors Need To Know

All figures in Canadian dollars, unless otherwise stated. 13-123437 © 2013

CIBC World Markets does and seeks to do business with companies covered in

its research reports. As a result, investors should be aware that the firm may

have a conflict of interest that could affect the objectivity of this report.

Investors should consider this report as only a single factor in making their investment decision.

See "Important Disclosures" section at the end of this report for important

required disclosures, including potential conflicts of interest.

See "Price Target Calculation" and "Key Risks to Price Target" sections at the

end of this report, or at the end of each section hereof, where applicable.

Sector Weighting: Market Weight

Todd Coupland, CFA 1 (416) 956-6025 [email protected]

Robin Manson-Hing 1 (416) 594-7232 [email protected]

The Hottest Technology Companies In Canada - June 06, 2013

2

Table of Contents

Tech's Time Is Now ....................................................................................... 3 New Information On New Companies .......................................................... 3

The Timing Is Right For Tech ......................................................................... 5 Canadian Innovators Thriving ..................................................................... 7

Talent Remains But Double Whammy Hurt.................................................. 8 M&A Continuing And Venture Capital Growing ............................................10

Government Has Not Helped In The Last Two Years ...................................12

Venture Capital Already Rebounding ..........................................................13 Canadian Companies Ready To Take The Next Step ...................................14

Company Profiles

Absolute Software Corporation .....................................................................16

Accedian Networks Inc. ................................................................................17

Avigilon Corporation .....................................................................................18

Awesense Wireless Inc. ................................................................................19

Chango Inc. .................................................................................................20

Creation Technologies LP ..............................................................................21

Desire2Learn Incorporated ...........................................................................22

EnWave Corporation.....................................................................................23

Global Relay Communications Inc. ................................................................24

Halogen Software Inc. ..................................................................................26

HootSuite Media Inc. ....................................................................................27

Keek Inc. .....................................................................................................28

Kik Interactive, Inc.......................................................................................29

Kinaxis Inc. ..................................................................................................30

MOSAID Technologies Inc.............................................................................31

Nanotech Security Corp. ...............................................................................32

PointClickCare.com.......................................................................................33

Real Matters Inc. ..........................................................................................34

Redknee Solutions Inc. .................................................................................35

SkyWave Mobile Communications Inc. ..........................................................37

Solace Systems Inc. .....................................................................................38

Spectra7 Microsystems Inc. ..........................................................................39

tucows Inc. ..................................................................................................40

Vision Critical Communications Inc. ..............................................................41

ViXS Systems Inc. ........................................................................................42

Wattpad .......................................................................................................43

Webtech Wireless Inc. ..................................................................................44

E-commerce In Canada ...................................................................................45

Thank You Canada Customs ......................................................................45 Little Brother Ignored Again ......................................................................45

Profitability Takes Time .............................................................................45

Company Profiles

Beyond the Rack Inc. ...................................................................................47

Buyers Unite Inc./TeamBuy.ca......................................................................48

Well.ca Inc. ..................................................................................................49


3

Tech’s Time Is Now The recent lull in Canadian technology investment post the 2008 downturn and

Nortel Networks (NRTLQ–PN) and Research In Motion (BBRY–SO-Spec.) fallout

has prompted many firms to take a more entrepreneurial route. One example is

the 200 companies that now occupy 2 million square feet of real estate owned

by Terry Matthews in Kanata. Ten years ago the number of companies was 20,

with little growth. Downriver, the old Nortel buildings at Technoparc in Montreal

are being occupied by tenants like Accedian Networks and other up-and-coming

IT firms, along with aerospace and U.S. subsidiary tenants that are able to

operate and take advantage of the large talent pool in now-affordable real

estate. The resource sector’s current negative cycle is being timed

almost perfectly with:

Increasingly driven and creative technology entrepreneurs;

An experienced pool of talent;

A growing number of engineering/computer science graduates;

An increased venture capital and government funding focus;

Reasonable valuations; and,

A lower Canadian dollar.

Most importantly, there are dozens of Canadian technology companies

with material revenue bursting at the seams, many of which are

showing rapid profitable growth. The story at the end of the day is one of

Canadian entrepreneurs, their teams, and their ability to outperform their global,

and often much larger, peers in the markets in which they compete.

New Information On New Companies This report highlights 30 of the fastest-growing private and/or under-covered

small-cap public technology companies in Canada. Exhibit 1 lists the profiled

companies and their industry sub-group. Collectively, the (mostly profitable)

private companies profiled within this report generated close to $2 billion in

revenue in 2012, and virtually all of the private companies in this paper could go

public if they so chose to over the next few years. These companies employ an

estimated 10,500 people, the vast majority of whom are highly skilled, creative

and flexible workers. These are the same types of employees that governments

state are necessary for improved productivity of the labor force.

In each profile, we provide company sales and growth estimates, headcount,

detailed market sizing, growth and description along with details on the

company’s product/service and competitive advantages, customers and business

plans with strategic, current and target profit objectives.


4

Exhibit 1. Companies Profiled

Company Status City Industry

Absolute Softw are Corporation ABT–TSX Vancouver Mobile Dev ice Management

Accedian Networks Inc. Priv ate Montreal Wireless Backhaul Service Assurance

Av igilon Corporation AVO–TSX Vancouver Video Surv eillance Market

Aw esense Wireless Inc. Priv ate Vancouver Electricity Anti-theft

Bey ond The Rack Inc. Priv ate Montreal E-Commerce

Chango Inc. Priv ate Toronto Real-time Bidding

Creation Technologies LP Priv ate Vancouver Mid-market EMS

Desire2Learn Incorporated Priv ate Kitchener/Waterloo Learning Management Systems

EnWav e Corporation ENW–TSX-V Vancouver Radiant Energy Vacuum For Consumption

Global Relay Communications Inc. Priv ate Vancouver RDBMS Softw are

Halogen Softw are Inc. HGN–TSX Ottaw a Talent Management Softw are

HootSuite Media Inc. Priv ate Vancouver Social Media Ad Market

Keek Inc. Priv ate Toronto Social Media Ad Market

Kik Interactiv e, Inc. Priv ate Kitchener/Waterloo Mobile Ott Messengers

Kinax is Inc. Priv ate Ottaw a Cloud Based SCM

MOSAID Technologies Inc. Priv ate Ottaw a Semiconductor IP Market

Nanotech Security Corp. NTS–TSX-V Surrey, BC Anti-counterfeiting Security Feature

PointClickCare.com Priv ate Mississauga, ON SAAS For Skilled Nursing

Real Matters Inc. Priv ate Markham, ON Property Inspection Marketplace – Insurance

Redknee Solutions Inc. RKN–TSX Mississauga, ON Real-time Charging

Sky Wave Mobile Communications Inc. Priv ate Ottaw a M2M Satellite Market

Solace Systems Inc. Priv ate Ottaw a Global Application Infrastructure And Middleware

Spectra7 Microsystems Inc. SEV–TSX-V Markham, ON Analog IC Market

TeamBuy.ca Priv ate Toronto E-commerce

tucows Inc. TC–TSX Toronto Domain Name Registrations Market

Vision Critical Communications Inc. Priv ate Vancouver Online Surv ey Softw are

ViXS Systems Inc. Process of becoming public Toronto Video Processing Market

Wattpad Priv ate Toronto Social Media Ad Market

WebTech Wireless Inc. WEW–TSX Vancouver Global Fleet Management

Well.ca Inc. Priv ate Kitchener/Waterloo E-commerce

Source : Company reports and CIB C World Markets Inc.


5

The Timing Is Right For Tech Investor interest in technology companies waned over the last eight years, with

the tech weighting within the TSX Composite dropping from over 6% at the end

of 2004, well after the 2001 tech bubble, to 1.7% today. Even excluding the

growth of the much larger Materials and Energy sub-sectors over the years, as

well as Financials, technology has shrunk more than any other sector.

Exhibit 2. Technology Has Posted The Largest Decline In The

Last 10 Years

Non-Resource Sectors Of The TSX Composite

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12

% o

f th

e T

SX

Co

mp

osi

te

Industrials Telcom Consumer Discretionary Consumer Staples Health Care Utilities Information Technology

Source: Bloomberg, Company reports and CIB C World Marke ts Inc.

Even excluding Blackberry and Nortel, under-investment remains: One of

the primary reasons proffered for the decline is that Nortel (one-third of the tech

weighting at the end of 2002) and Research In Motion (71% in 2007) were too

speculative for a true representation of the degree to which a portfolio should be

weighted towards technology. However, even if we exclude these names, the IT

sector as a percentage of the TSX Composite remains at less than half of levels

10 years ago (Exhibit 2). M&A – such as IBM’s (IBM–NYSE) acquisition of

Cognos, AMD’s (AMD–NYSE) acquisition of ATI Technologies, Borealis’

acquisition of Teranet Income Fund, and TELUS’ (T–R) acquisition of Emergis,

among others – accounted for the remainder of the decline.

If we value the private companies in our report alone at a conservative 1x price

to sales multiple [the average of the last three Canadian IPOs – Avigilon (AVO–

TSX), Halogen Software (HGN–TSX) and ViXS, which will go public at an

estimated 4x], the approximate $2 billion in market capitalization would

represent just less than 10% of the current value of the technology sector in the

TSX Composite. Given the current growth projections of these companies and

maintaining the conservative 1x P/S multiple, these firms could represent over

20% of the current weight of technology companies on the Composite in another

three years.


6

Exhibit 3. Excluding Nortel And Blackberry, Still Proportionally Lower

6.6%

1.7%

1.3%

1.1%

2.5%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12

Info

Tec

h a

s a

% o

f th

e T

SX

Co

mp

osi

te0.0%

4.0%

8.0%

12.0%

16.0%

20.0%

24.0%

28.0%

Info

Tec

h a

s a

% o

f th

e S

&P

500

Info Tech As A Percentage Of The TSX Composite

Info Tech as a % of the TSX Composite (excluding Blackberry and Nortel)

Info Tech (% of TSX Composite Including Current Privates at 4x Price / LY Sales)

Info Tech As A Percentage Of The S&P 500


The relative decline in technology investing is occurring despite increasing

numbers of engineering graduates, the prevalence of experienced technology

staff and management across the country, the hundreds of Canadian companies

in the public markets and forward P/E multiples that are lower than historical

levels. Forward P/S valuations are in line with those in 2002 and generally

higher than in 2007, although most of the increase is primarily due to there

being more software companies in the Composite.

Exhibit 4. Forward P/E Valuations Are Attractive Versus Historical Levels

2002Current 2007

S&P/TSX Composite IT Sector Index Weighting Forward P/E

Research In Motion Ltd 71% 36.8x

Nortel Networks Corp 9% n/a

Cognos Inc 6% 32.1x

CGI Group Inc 5% 16.8x

Open Text Corp 2% 28.9x

Teranet Income Fund 2% n/a

MacDonald Dettwiler & Associates 2% 18.3x

Celestica Inc 2% 11.9x

Emergis Inc 1% n/a

Aastra Technologies Ltd 1% 13.4x

Average 22.6x


Nortel Networks Corp 33% n/a

Celestica Inc 14% n/a

Cognos Inc 11% 28.5x

Onex Corp 9% n/a

ATI Technologies Inc 6% n/a


Research In Motion Ltd 4% n/a


Creo Inc 2% 25.5x

Hummingbird Ltd 2% n/a

Cinram International Income Fund 2% 10.9x

Zarlink Semiconductor Inc 2% n/a

Gennum Corp 1% n/a

Geac Computer Corp Ltd 1% n/a


Cognicase Inc 1% n/a

Descartes Systems Group 1% n/a

Emergis Inc 1% n/a

Leitch Technology Corp 1% 271.x

Average 18.6x




Open Text Corp 16% 12.x

MacDonald Dettwiler & Associates Ltd 9% 12.6x

Constellation Software Inc/Canada 7% 16.4x


Wi-Lan Inc 2% 20.9x

Average 17.3x



7

Exhibit 5. Forward P/S Valuations Are In Line With Historical Levels

Current 2007 2002

S&P/TSX Composite IT Sector Index Weighting Forward P/S




MacDonald Dettwiler & Associates Ltd 9% 1.3x

Constellation Software Inc/Canada 7% 2.8x


Wi-Lan Inc 2% n/m

Average 1.4x


Research In Motion Ltd 71% n/m

Nortel Networks Corp 9% 0.1x

Cognos Inc 6% n/a



Teranet Income Fund 2% n/a

MacDonald Dettwiler & Associates 2% n/a


Emergis Inc 1% n/a

Aastra Technologies Ltd 1% n/a

Average 0.9x


Nortel Networks Corp 33% 0.7x


Cognos Inc 11% 3.3x

Onex Corp 9% n/a

ATI Technologies Inc 6% 0.9x

CGI Group Inc 5% n/a

Research In Motion Ltd 4% n/a


Creo Inc 2% 0.7x

Hummingbird Ltd 2% 2.0x

Cinram International Income Fund 2% n/a

Zarlink Semiconductor Inc 2% 1.3x

Gennum Corp 1% n/a

Geac Computer Corp Ltd 1% n/a


Cognicase Inc 1% n/a

Descartes Systems Group 1% 2.x

Emergis Inc 1% 1.3x

Leitch Technology Corp 1% n/a

Average 1.5x


Canadian tech IPO market is beginning to rebound: The success in 2013 of

Canada’s two most recent technology IPOs – Avigilon (up almost 300% since

November 2011, trading at 4x forward P/S) and Halogen (shares have remained

above IPO price, trading at 7x TTM sales) – has helped to improve negative

sentiment post the Facebook (FB–NASDAQ) IPO in May 2012, the Smart

Technologies (SMT–SO) IPO in July 2010 and the generally quiet IPO period

after 2008. Consequently, a number of private technology companies have

become increasingly confident that a public IPO in Canada is a real option,

something not seriously contemplated by most prior to 2013.

We conclude from this report that the Canadian technology industry is

preparing for its biggest step-up in the public markets since 2007. In our

opinion, the stage is set for technology to claim a larger weighting in portfolios.

Canadian Innovators Thriving

The lack of material incentives from most provinces, decreases in venture and

public capital, cutbacks to government IT infrastructure dollars, and a general

lull in major Canadian technology IPOs have some believing the Canadian

technology sector may have undergone a permanent structural decline rather

than a cyclical one. However, macro headwinds have been overcome by the

continued innovation and pragmatic nature of Canadian entrepreneurs

and their like-minded Canadian employees.

There are dozens of eight-figure-revenue private companies growing at more

than 30% across the country. Over the last six months, we have spoken and

built relationships with the leaders of dozens of emerging technology companies

across Canada, ranging from those in social media, semiconductors, electronic

manufacturing services, e-commerce and SaaS. Every major technology sector

in Canada has a North American and/or global presence and the individuals and

management behind these companies are more diverse than one would expect.


8

In this report, we identify and discuss in detail a number of the companies that

could be on the verge of stepping into the public eye over the next few years.

We also profile a number of micro-cap companies that have flown under the

radar of the investment community and that, we believe, deserve a closer look.

Talent Remains But Double Whammy Hurt The Ottawa region is an important example of the hollowing out of

Canadian technology companies. On December 31, 2000, Ottawa-based

Nortel had 12,600 full-time R&D employees in Canada, and spent about

$6 billion that year. Five years later, these numbers had fallen to 4,760

employees and $2.5 billion spent and by 2009 Nortel filed for bankruptcy.

While R&D spending increases at foreign technology giants IBM, Alcatel-Lucent

(ALU–NYSE), Ciena (CIEN–NASDAQ), AMD and Ericsson (ERICY–TSX) amounted

to about $1.3 billion in 2011, a hole in technology investment of more than

$4 billion remains today, even excluding inflation. A number of former Nortel

employees fanned out to the likes of QNX, Bell (BCE–R), the Government of

Canada and Nortel U.S. subsidiary offices, while still others moved to smaller

companies. The Nortel bankruptcy combined with foreign nationals attracting

experienced workers served as a double whammy to the Canadian technology

sector on top of the general downturn in the economy.

At the same time, engineering and computer science students continue to

graduate from the nearby Universities of Carleton and McGill, producing top

electrical engineering and computer science talent. The rate of engineering,

math and computer science graduates in Canada continues to increase at a

materially faster-than-average rate. The talent from the former networking giant

remains and schools continue to churn out large numbers from proven programs

across the country.

Exhibit 6. Faster-than-average Growth Of Engineering/Math/Computer

Science Graduates

Undergraduate Degree 2012/2013

Graduate Estimate Five-year

CAGR

Canada 5,581 4.1%

Agriculture, Natural Resources And Conservation 5,095 3.9%

Architecture And Related Serv ices 5,077 3.0%

Humanities 4,942 3.2%

Business Management And Public Administration 6,060 5.0%

Education 4,006 2.3%

Engineering 6,552 5.4%

Law, Legal Professions And Studies 9,949 5.5%

Medicine 11,891 4.9%

Visual And Performing Arts & Comm. Technologies 4,793 2.3%

Physical And Life Sciences And Technologies 5,478 4.0%

Math., Computer And Information Sciences 6,111 5.2%

Social And Behavioural Sciences 4,862 3.4%

Other Health, Parks, Recreation And Fitness 5,092 2.9%

Dentistry 16,910 6.2%

Nursing 4,909 2.6%

Pharmacy 10,297 5.3%

Veterinary Medicine 6,224 5.8%

Source: Statistics Canada and CIBC World Markets


9

The same trend is apparent across the country: Over the last few years, a

number of large Canadian technology companies have either slashed jobs or

seen employees eventually move on, driven by M&A.

Waterloo: Research In Motion’s downturn in recent years has driven

ex-RIM employees to join the most exciting companies in Canada, including

all three Waterloo private companies in our report – Desire2Learn, Kik and

Well.ca.

Montreal: The fallout from the (mis)fortunes of Nortel also had material

ramifications in Montreal. Companies such as Accedian (featured in this

report) and Bombardier (BBD.B–SO) and foreign multi-nationals like Ciena,

Ericsson, Alcatel-Lucent and Amdocs (DOX–NYSE) took over Nortel’s old

offices. Other companies that have been taken out over the years, such as

Miranda Technologies [purchased by Belden (BDC–NASDAQ) in 2012],

Emergis (e-Business now owned by TELUS), and Softimage [3D Animation

now owned by Autodesk (ADSK–NASDAQ)], continue to operate on a

smaller scale. In the meantime, the gaming industry has stepped up, with

EA Games (EA–NASDAQ) and Ubisoft (UBIP–PA) employing over

3,000 people alone and a number of large Canadian-owned companies,

such as Behaviour Interactive, growing and, who knows, possibly set to

feature in a report similar to this one in the next few years.

Toronto: Given the sheer size of Toronto, its employment landscape is

more fluid, but it still underwent a material shift in its tech workforce with

AMD’s purchase of ATI in 2006 and subsequent decline in graphics

processors since then. Furthermore, takeovers and/or declines over the last

five years of a number of mid-sized companies, such as Gennum,

RuggedCom, Procom Consultants, SMTC (SMTC–NASDAQ) and dozens of

others, in tandem with an influx of thousands of engineering and computer

science graduates, have created a foundation on which companies such as

Real Matters, Point Click Care, Chango, Keek, Kik, and ViXS can build from

a rich talent pool.

Vancouver: Vancouver (along with Montreal) is perhaps the most

under-appreciated tech spot in Canada. Unlike the East Coast, which was

heavily influenced by the ups and downs of Nortel and Research In Motion,

there has been steady growth in the region and, with the gradual economic

turnaround, companies such as HootSuite, Vision Critical, and Global Relay

are beginning to reach the point of critical mass. The success of Avigilon

two years ago has not gone unnoticed and a number of these companies

may have a path to a viable IPO.


10

Exhibit 7. Technology Is Brewing Across The Country – Public Companies By Geography

Region Population Market Capitalization

Primary Universities Number Of Public

Companies

GTA 5,838,800 $8,303,780,314 University of Toronto, York University, Ryerson Univ ersity,

McMaster University 67

Greater Vancouver 2,419,700 $1,593,259,053 University of British Colombia, Simon Fraser University, University

of Victoria 66

Calgary 1,265,100 $1,542,891,557 University of Calgary, Mount Royal Univ ersity 30

Greater Montreal 3,908,700 $10,304,812,703 McGill University , Concordia Univ ersity, Queen's University,

Universite de Montreal 26

Ottaw a Region 1,258,900 $952,967,393 University of Ottaw a, Carleton University 15

Kitchener/Waterloo 498,500 $14,112,144,487 University of Waterloo , McMaster University , Western University 7

Quebec City Region 761,700 $300,105,593 Lav al Univ ersity 6

Edmonton 1,196,300 $20,798,810 University of Alberta 5

Kelow na 182,800 $27,687,732 University of British Colombia 4

Guelph 141,300 $111,474,363 University of Guelph, University of Toronto, York University ,

Ry erson University, McMaster Univ ersity, University of Waterloo,

Western University

2

Saskatoon 272,000 $106,553,008 University of Saskatchew an 2

Winnipeg 762,800 $3,657,277 University of Manitoba 2


M&A Continuing And Venture Capital Growing

Perhaps one of the most encouraging quotes about macroeconomic conditions in

Canada is one from Cisco’s (CSCO–NASDAQ) CEO, John Chambers, on the

company’s Q1 conference call. His response to a question about the macro

environment:

“We're looking more towards the tax policy and is government able to instill the

confidence in business that allows them really to reinvest? If I were to look at

one model (that) we ought to look at carefully around the world, it's Canada,

the easiest place to do business. It doesn't matter which party is in power,

even their provinces, i.e., their states, when the national government, Prime

Minister Harper gets [sic] it. The leaders in Ottawa get it. They drive down

through and make it very easy to do business there and you're going to see us

grow our business there as well as invest overall.”

With the current U.S. administration relegating tax repatriation to the

backburner until 2016, Cisco has stated that it will continue to deploy its

estimated $40 billion in non-U.S. cash overseas. This is likely also the case for

other U.S.-based technology companies and their hundreds of billions in cash

sitting outside the U.S. Smaller Canadian firms continue to be picked off by their

southern counterparts, who are often looking to leverage their existing staff in

the U.S. Recent examples include:

DALSA – purchased by Teledyne (TDY–NYSE) in December 2010 for

$341 million (7.5x EV/EBITDA, 1.1x EV/Sales);

Gennum – purchased by Semtech (SMTC–NASDAQ) in January 2012 for

$500 million (15x EV/EBITDA, 2.6x EV/Sales);

RuggedCom – purchased by Siemens (SI–NYSE) in January 2012 for

$440 million (21.4x EV/EBITDA, 3.2x EV/Sales); and,

Zarlink – purchased by Microsemi (MSCC–NASDAQ) in November 2011 for

$525 million.


11

In 2012, there were exactly 100 acquisitions of Canadian companies around the

world, ranking Canada third in terms of total acquisitions, according to CB

Insights. In comparison to its size on a proportional basis, Canada is the most

likely country in which a technology company will be acquired outside of the U.S.

Exhibit 8 lists the countries trailing the U.S. in company acquisitions.

Exhibit 8. Technology Companies Acquired In 2012 – By Country

Ranking Country Acquisitions

#2 United Kingdom 156

#3 Canada 100

#4 India 53

#5 Germany 52

#6 France 35

Source: CB Insights, Company reports and CIB C World Mark ets Inc.

We don’t believe that any of the factors that rendered Canadian companies

attractive to U.S. multi-nationals in 2012, including the postponed tax

repatriation or continued growth in their record cash balances, will change

anytime soon. This tells us that:

1. Canadian companies should trade at higher-than-historical premiums; and,

2. The number of acquisitions of Canadian companies should continue to

increase if Canadian companies continue to perform well.

We believe that if and when these private companies turn public, their

increased visibility and transparency will attract U.S. companies to a

number of the remaining private entities.


12

Exhibit 9. Percentage Change In Gross Expenditure On R&D (GERD) For Selected Countries (2005–2010)

-15%

-20%

0%

20%

40%

60%

80%

100%

120%

140%

160%C

hina

Por

tuga

l

Tur

key

Est

onia

Slo

veni

a

Hun

gary

Aus

tral

ia

Rep

. of K

orea

Irel

and

Pol

and

Slo

vak

Rep

ublic

Cze

ch R

epub

lic

Isra

el

Den

mar

k

Spa

in

Italy

Uni

ted

Sta

tes

Aus

tria

OE

CD

Tot

al

Nor

way

Ger

man

y

Fin

land

Rus

sian

Fed

erat

ion

Bel

gium

Fra

nce

Uni

ted

Kin

gdom

Rom

ania

Sw

eden

Luxe

mbo

urg

Net

herla

nds

Can

ada

Per

cent

age

Cha

nge

Notes: based on constant 2005 dollars and PPP; indicates change between 2004 and 2009

Source: OCE D, Main Science and Technology Indicato rs and CIBC World Markets Inc.

Government Has Not Helped In The Last Two Years

French company Ubisoft’s decision in 1997 to locate and create 500 Montreal

jobs over five years stemmed only partially from common language, proximity to

North America and the city’s reputation for creativity. The main driver was the

decision by the federal and provincial governments to contribute $10,000 and

$15,000, respectively, per employee per year. Today, Ubisoft’s Montreal office

employs 2,100 people and there are plans to expand further. Upon seeing the

success of this program, Premier McGuinty’s Ontario provincial government

pledged in 2009 $263 million over 10 years to help Ubisoft expand its studios in

Toronto. This expansion came shortly after Ontario announced it was boosting

its interactive digital media tax credit from 25% of labor costs to 40%.

However, these incentives came on the heels of a real economic decline and a

bottoming in 2010 in total spending, and have tended not to move the needle.

Since 2010, the private sector has shown resilience in R&D growth, spending

about 1% in the face of an uncertain environment. At the same time, however,

the federal government has cut spending, on average, 9% a year while the


13

provinces’ strategies (e.g., R&D tax credits) were creative but too small to have

a material impact. Exhibit 10 outlines the macro picture over the last 10 years,

with government spending showing a pullback in the last two years. There is

reason to hope, however, that this situation could change, as we discuss below.

Exhibit 10. Gross Expenditures On R&D (GERD) – Private Sector Doing The Heavy Lifting

Changing trend

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

CA

D M

illio

ns

Business enterprises Higher education

Federal government Provincial government and provincial research org.

Source: Statistics Canada and CIBC World Markets Inc.

Venture Capital Already Rebounding In 2013, the federal budget’s focus shifted for the first time since 2006, from

highlighting Science, Technology and Innovation Leadership to Research and

Innovation in technology. It included increased spending (up close to 40% Y/Y),

incorporating $325 million over eight years allocated to sustainable development

technology, $121 million over two years to grow innovative businesses in

Canada, $60 million over five years for incubator and accelerator organizations,

and $100 million to the Business Development Bank of Canada (BDC) as well as

other programs.

At the end of May, the Minister of Finance announced that the government of

Canada is soliciting expressions of interest on the creation of two new funds that

are expected to manage between $300 million and $400 million in capital, with

the federal government contributing $1 for every $2 contributed by others.

Exhibit 11 illustrates that government R&D spending, despite the recent

decreases, remains a major factor in venture investments (augmenting private

spending) and the contribution is expected to increase over the next few years.

The funds are being funneled from the top down and entrepreneurs (with

guidance from venture funds) are pushing their companies to ramp up

technology spending.


14

Exhibit 11. Government Is Key To New Fund Formations ($ mlns.)

$0 $200 $400 $600 $800 $1,000

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Individuals Corporations Fund of Funds Government Pensions Foreign Insurance Other

$228

$676

$789

$42

$327

GovernmentKey Enablers

Key EnablersCorporations

Provincial FoFs BDC Individuals

VC New Fund Formation

$1.8 Billion in 2012, A Six year High

Source: Canadian Venture Capital Association, Company reports and CIB C World Markets Inc.

According to Canada’s Venture Capital & Private Equity Association (CVCA),

venture capitalists invested $1.5 billion in 2012, equal to the amount in 2011

and the highest since 2007. More impressive, however, was that 41% of capital

flows were to new investments (15-year high), including 395 Canadian

companies (a five-year high). Information Technology remained the focus for

VCs ($719 million invested in 214 companies).

There are a number of major funds in Canada. Omers Ventures, with

investments in Desire2Learn, Vision Critical, HootSuite and Wattpad, expects to

continue to focus on technology, media and telecom investments, with a 75%

focus in Canada. It invests from initial funding through to late-stage funding, up

to more than $30 million. Kik received major funding from Fred Wilson and

Union Square, which also invested in Twitter and Zyenga (ZNGA–NASDAQ).

iNova typically invests earlier in the lifecycle and has found success with the

likes of Chango and Well.ca.

In talking with these technology companies, we took away one common

denominator: venture capital investments have allowed the companies to

expand their software developer/engineering base to the point where they can

surpass and stay ahead of their competitors on the innovation front. Continued

investments will likely continue this trend.

Canadian Companies Ready To Take The Next Step

With these positive macro trends, we have identified 20 private firms ready to

take the leap to the public markets, one private company that is moving to

become public, and nine public stocks that have perhaps fallen under the

investor radar and deserve a second look.


15

Company Profiles Sources for tangible addressable markets (TAM) are company reports unless

otherwise indicated.


16

Exhibit 12. Absolute Software – Mobile Device Management

Absolute Software Corporation

ABT – TSX Venture Sales 2012 (Sales Contracts): US$43.1 million Employees: 393

CEO John Livingstone Approx Growth Rate LY: -2% Located: Vancouver, BC

Est. Forecasted Growth By

Company NY 18% Founded: 1999

Pro Forma Net Cash US$57 million

Market Capitalization: $250 million

Sector: Smart Device Trace And Management

The move towards securing data is becoming more impor tant to enterprises and governments. Thieves and software hackers are becoming increasingly sophisticated in figuring out ways around hardware detection and software navigation. In most cases, once

a GPS chip or detection tracking software is removed, the stolen items are free to be used by the perpetrators. The market for tracking, managing and erasing mobile devices is an important and

growing market. Currently, only 43% of laptops, 42% of smar tphones and 29% of mobile devices can be remotely locked or erased, according to Vodafone. The API used for managing laptops w ith x86 hardware differs significantly from that of smartphones and tablets. H istorically, these have been handled by different competitors. In addition, in the

laptop/desktop world, client management tools related to lifecycle management have been handled by established companies such as Altris (Sy mantec), Kace (Dell) and BigFix (IBM). In IT service management, software for data and device security has been offered by

companies such as Safeboot (McAfee) and Utimaco where Absolute is generally purchased as a complement to their products. This market is moving to a new phase and should expand given growth in enterprise mobility in smartphones and tablets around the world.

Est. TAM 2012: 821 million devices

Est. TAM in 4 Years: 1.2 billion devices

Sub-Sector: Source:

Radicat i Group Mobile Device Management

Est. TAM 2012: $525 million

Est. TAM in 4 Years: $1,123 million

Product/Service: Absolute Computrace: A SaaS solution providing commercial customers with the ability to track their computer and mobile device inventories on or off the corporate network. The firmware-persistent software is self-healing, occupying only 8K of memory when idle and 27K when it p laces a call. This software is patented and provides software license compliance, protecting data through functions such as locating and remotely locking devices, and it is built into a ll x86 laptops by every

major PC OEM. While the laptop market is steady to declining, growth is expected to come from mobile. Samsung is a good example of such as it has chosen Absolute Computrace to boost its new enterprise platform (Samsung Knox) for its Galaxy S4. More of these type of deals are expected in the future.

Absolute Manage: Lifecycle management and mobile device management solution. This product enables management of application, licenses, software distribution, updating patches, encryption status and other essential functions for both PC and Mac computers, as well as mobile solutions.

Absolute Service: Track performance and ensure delivery of established service-level agreements.

Customers:

Revenue is derived from 5 million paid subscriptions under management. Education and enterprise are the largest end-markets. The company sells through PC OEMs (80% of sales). I ts largest PC OEM partner generated approximately 34% of total sales contracts last year. Sales are increasingly diversified, with 27% coming from its second- and third-strongest par tners in 2012. Of sales, 8% were to consumer customers. Over 500 million laptops have Absolute’s

firmware-persistent solutions embedded.

Business Plan Moving Forward:

The business model is for revenue growth through a combination of increased laptop penetration, tablet and smartphone

growth, cross-selling of complementary products and international expansion. Revenue recognized from the prior year's deferred revenue was 78% and contracts are typically two to three years from laptop owners with the embedded firmware code. While a wide variety of solutions exist for mobile device management (such as AirWatch and Mobile Iron), a similar solution is not available for laptops or PCs as the x86 Windows operating systems differ materially and are not easily

modified w ith an API. Absolute has a natural competitive advantage versus other laptop secur ity competitor s in that it is already embedded in the firmware of 500 million laptops and this lends itself to managing an already deployed hardware.

In December 2012, two directors of Crescendo Partners jo ined the board. The New York-based investment firm has had success in encouraging companies to explore strategic options, often leading to a sale. These include DALSA Semiconductors, Spar Aerospace and Bridgewater Systems. Absolute w ill continue to execute its business plan. Longer term

we would not be surprised if the company explored strategic options that included running an auction or a complete sale o f the company.

Source: Radicati Group, Company reports and CIB C World Marke ts Inc


17

Exhibit 13. Accedian Networks – Wireless Backhaul Service Assurance

Accedian Networks Inc.

Private 2012 Sales: $50MM to $100MM Employees: 225

CEO Patrick Ostiguy Approx Growth Rate LY n/a Located: Saint-Laurent, Quebec



Pro Forma Net Cash n/a

Investors: Summit Par tners, Rho Canada Ventures, Skypoint Capital, Solidarity Fund QFL.

Sector: Source: ABI Research

Wireless Network Service Assurance

Demand for data on smar tphones and for OTT video has grown rapidly over the last few years and is expected to grow at a CAGR of 43% until 2017, according to Cisco. 40G and 100G continue to be discussed as future solutions for data center and enterprise

connectivity, as well as for future potentia l bandwidth increases, but 10G is currently the market seeing the most take-up, driving virtually all growth in total Ethernet switches. One of the key bottleneck areas is mobile backhaul, which is seeing a real move to

upgrading circuits in order to suppor t 4G/LTE. The ability to assure and optimize network performance in real time is of real value to network operator s. Higher-speed technology is required as mobile networks move to

4G/LTE. This market is becoming increasingly impor tant to carriers as downtime can cause a material loss in customer satisfaction and eventual renewals. This recognition by carriers has pushed sales of per formance assurance companies such as NetScout and

Accedian materially higher. These companies are entrenched w ith customers based on their ability to assure and optimize network per formance through the use of network-embedded software and hardware solutions.

Est. TAM 2011: $2.55 billion


Sub-Sector:

Wireless Backhaul Service

Assurance Est. TAM 2011: $2 billion


Product/Service:

Accedian sells solutions that provide service providers with network per formance visibility and optimization. To do so,

Accedian instruments the network w ith end- to-end solutions, including software agents, miniaturized network devices, and performance-aware network elements. These, in conjunction with a power ful cloud-based App, provide the level of actionable insight required to optimize usage and per formance of bandwidth in a real- time fashion. Accedian's competitive

advantage is its tight integration of best-of-breed traffic conditioning and per formance assurance. These solutions are primarily for mobile backhaul, small cells, cloud services and business services, and are aimed at ensuring and optimizing the per formance (e.g., throughput) of mobile services, more specifically at the backhaul bottleneck that exists between

base-stations and switching centers. Additional benefits include reducing capex/opex, accelerating deploy ment, reducing time to revenue, allowing the offering and monetizing of value-added SLAs, and offering a better QoS/QoE to customers. The products are installed at cell sites (Macro and Small cells), customer premises, and switching centers. The software solutions include the company’s Vision Suite, which is a imed at automating service activation & turn-up performance

verification, managing performance assurance and optimization, and repor ting on network per formance and service-level agreements.

Customers:

Its products are installed in 90,000 U.S. base stations and 150,000 worldwide. Customers are well diversified and include

Tier 1 mobile operators and Ethernet service providers. Revenue came from 314 different customers in 2012, with 30% from customers outside North America.

Business Plan Moving

Forward:

Accedian is growing rapidly and has strong gross margins due to the high software and IP content. Growth is expected from

business Ethernet and upgrades in mobile backhaul to suppor t small cells and 4G networks around the world. Accedian has proven itself and is an established supplier to U.S. Tier 1 carriers. The company expects to leverage its experience as 4G/LTE grows globally with emphasis in Europe and Asia Pac. The focus on upgrades at the mobile backhaul level is ramping up. Moreover, the emergence of small cells and the recognition of business Ethernet as a technology of choice for

enterprise cloud connectivity are aiding in its service assurance momentum. These trends are expected to continue momentum in 2013 and beyond.

Source: ABI Research, Company reports and CIBC World Markets Inc.


18

Exhibit 14. Avigilon – Video Surveillance

Avigilon Corporation

AVO – TSX Venture 2012 Sales: $100 million Employees: 300 CEO Alexander Fernandes Approx Growth Rate: 80% Located: Vancouver, BC

Est. Forecasted Growth By Company NY 58% Founded: 2004

Sector: Source: ABI Research

Global Homeland Security Market Sub-Sector: Source: ABI Research

Video Surveillance Market

Est. TAM 2012: $197.9 billion Est. TAM 2011: $16 billion


While government and corporate budgets remain constrained, there are a number of factors boosting spending on video surveillance.

1) Increased awareness of affordable hybrid/digital security systems. A large portion of businesses have installed legacy inactive surveillance cameras for years, perhaps decades, as a deterrent. D igita l Video Recorders (DVR) with encoders were widely unused due to the lack of aw areness and availability of low-cost solutions at the time of previous installations. I t is forecast that 2013 will be the first year that IP cameras w ill begin to outsell

analog cameras and this trend is expected to continue. 2) High-profile security incidents – The Boston Marathon bombings prompted IHS to raise its 2016 forecast for the video-surveillance

equipment market. Continued headlines of robberies and violent incidents p lay into demand for video surveillance at corporate and government levels.

3) Increased bandwidth resulting in higher-quality, higher-fps captures, increased storage, lowered IT infrastructure and lower monthly Network Video Recorder (NVRs, open versus proprietary DVRs) costs are widening the market for IP surveillance. The video surveillance market comprises hundreds of competitors but most do not offer fu lly digital end- to-end high definition solutions. The primary

competitor s that offer a full solution include Bosch Security, Cisco, CSST (China), Hikvision (China), March Networks, Mobotix, Nice Systems, and Verint. Avigilon is likely the fastest-growing major video surveillance company in the world as the combination of attractive pricing, restricted dealer access (leading to a focused sales group) and its industry-leading 29 mega-pixel (MP) cameras has found very strong traction in a shor t amount of

time. Avigilon has won numerous awards over the last few years, including Deloitte awarding it the fastest-growing tech company in Canada in 2012 and the fastest-growing software company in Nor th America in the last two years.

Product/Service:

Avigilon's surveillance system is a fully digita l IP-based Ethernet network system equipped with HD IP cameras and network

video receivers. I t is perhaps best known for having super h igh resolution 29 MP cameras and affordable syste ms able to handle higher data rates due to some patented processes. Avigilon's High Definition Stream Management (HDSM) technology is, to a large extent, proprietary and has been designed to preserve data and image quality , solving typical problems and limitations associated w ith analog and analog/digita l-hybrid

video surveillance systems and components. This technology is embedded in the company’s products. Another major competitive advantage is having one of the broadest range s of cameras on the market from 1MP to 29MP.

Customers:

Avigilon does not have any single material customers. I ts systems are installed at more than 20,000 customer sites in more

than 80 countries. CMC Markets, The Point Casino, Avaya, Rogers Center, and SGL Arena are amongst some of its more well-known customers that have been made public. Avigilon's customer base also includes government entities, por ts, utilities, stadiums, plants, public transport, retail shops, educational institutions and banking and finance centers.


Forward:

Avigilon has grown revenues by ~20x to $100 million from 2008 to 2012, driven by North America. The company is targeting

$500 million by 2016 and it believes that this goal is increasingly achievable with every passing quar ter. With its strong performance, Avigilon can attract a stronger sales force and plans to strengthen its sales network in Nor th and South Amer ica, EMEA and the U.K. while expanding its sales reach to more directly cover the APAC region. I t is also working to

develop business development teams to target enterprise oppor tunities. Other development in itiatives include strengthening brand identity and improving awareness and continued focus on innovation and product development.

Source: Yahoo Finance, B usiness wire, SB wire, Bloomberg , Retail Solutions Online, IMS research, Company reports and CIBC World Markets Inc


19

Exhibit 15. Awesense Wireless – Electricity Anti-theft Market

Awesense Wireless Inc.

Private 2012 Sales: <$10 mil lion Employees: 20 CEO Mischa Steiner-Jovic Approx Growth Rate: n/a Located: Vancouver, B.C.

Est. Forecasted Growth By Company NY 1000%+ Founded: 2009

Investors: Various private investors

Sector:

Source: World Bank

Global Electricity Theft Utility companies have increasingly been forced to offset electricity theft by raising the

rates charged to customers. Capital expenditures for utilities transmission and distribution capital expenditures remain steady, but in many developing economies stemming the electricity losses is trumping the need to replace aging infrastructure or

upgrade to smar t meters. In markets such as Brazil, India and Eastern Europe, over 20% of electricity is believed to be lost due to theft. Inflation and stagnant wages mean consumers can no longer afford the burden of theft costs and utilities have only now

begun to take notice.

Est. TAM 2012: $200 billion


Sub-Sector: N.A. Electricity Theft

Est. TAM 2012: $10 billion Est. TAM 2016: $11 billion

Product/Service:

Awesense sells portable amperage monitors and software solutions that allow utilities to actively monitor their networks.

The solution is mobile, takes one to two days for readings to be collected and the sensors can be changed from the ground.

Customers:

There is no dominant solution and no company currently offers Awesense ’s combination of solutions. Customers include a number of utilities in Brazil and in Mexico, Colombia, and Chile. Various pilots in a number of European and Asian markets

are under way.


Having only begun commercial production in H2/2012, the company expects to continue to grow its pilots and customer list in 2013. H iring is occurring on a weekly basis and future growth of the company has the potentia l to be material.

Energy Losses By Region

Source: World Bank, Company reports and CIBC World Markets Inc.


20

Exhibit 16. Chango – Real-time Bidding (Ad slots)

Chango Inc.

Private 2012 Sales: $25 million to $75 million Employees: 75 CEO Chris

Sukornyk Approx Growth Rate LY 600% Located: Toronto, ON


Investors: Extreme Venture Partners; iNovia Capital; Mantella Venture Par tners; Metamorphic Ventures; Rho Canada

Sector: Source: eMarketer Est. TAM 2011:

Est. TAM 2015:

U.S. Digital Ad spending $32 billion

$55 billion

Online ad spending in the U.S. has grown rapid ly and, at ~$40 billion, is expected to have

surpassed spending on print media ad spending in 2012, growing at a CAGR of 12% from 2012 to 2016. Globally, the share of online ad spending is expected to grow from 18% in 2011 to 26% in 2016. Within online ad spending, Google and Yahoo are thought to represent 56% of total

online ad spending. Social media ad spending, a subset of online ad spending, is gaining momentum and is expected to grow from $3.8 billion in 2011 to $9.8 bill ion by 2016, according to eMarketer.

In attempting to target an even more specific market, Real-Time Bidding (RTB) for display ads is gaining tremendous momentum. An example of how it works is as follows:

A user visits a website (e.g., Facebook), which connects to an exchange server that suppor ts RTB (Facebook Exchange). The bidding platform determine s if any active campaigns wish to

target th is user and, if so, the ideal b id price. Advertisers are, therefore, able to target users based on profile information collected over time rather than buy an ad impression based on the website. Each par tner determines within its customer base the highest b idder and sends the ad and bid to the exchange, at which time Facebook Exchange shows the ad with the highest b id.

This process takes place in less than a half second. In September 2012, Facebook launched its Ad Exchange (FBX) by which, through their

partners, adver tisers can target these specific users.

Sub-Sector:

Source: eMarketer Est. TAM 2012: Est. TAM 2016:

Real-time Bidding

$1.95 billion $7.1 billion

Product/Service:

Search retargeting: Chango targets individuals who have not visited an advertiser's site but who have used a keyword on search engines such as Google, Yahoo! or Bing that shows an interest in an advertiser's site. I ts platform comprises more than 300 million Nor th American users with over 8 billion search events captured each month. This approach differs from

competitor s focused on “site retargeting” that ta lk only to those who have been to their site before. Chango’s platform receives cookie data derived from scripts embedded in Chango’s partner sites on users arriving from primarily search engines. This data is combined with first-party data from 75 of the top 500 online retailers in the world.

This platform is unique in combining demand side and data management. The Chango Platform: Chango also sells its platform as a service. Customers normally include larger retailer s who prefer to purchase a large amount of online ad space on their own.

Facebook Partnership: In December 2012, Chango was added as one of 13 approved PMD par tners allowed to purchase ads on Facebook Exchange (FBX) real- time bidding system (RTB). These par tners bid for ad space on behalf of their customers. Facebook serves over one billion ad impressions a day.

Customers:

Customer list includes 75 of the top 500 online retailers as well as top brands in verticals like finance, auto and B2B. Of sales,

90% are from the U.S. and the company operates four sub-branches there (New York, San Francisco, Los Angeles, Chicago); the company also has an office in London, U.K.

Business Plan

Moving Forward:

Plans to expand through 50 new hires in sales, engineering, marketing and ad operations. Additional ad markets could be

added, including mobile and pre-roll video ads.

Source: Forbes, eMarketer, Company reports and CIBC World Markets Inc.


21

Exhibit 17. Creation Technologies – Mid-market EMS

Creation Technologies LP

Private 2012 Sales: ~ $520 million Employees: 2,800

CEO Ar thur Tymos Approx Growth Rate LY: n/a Located: Burnaby, BC

Approx Growth Rate NY: 5%–10% with the economy Founded: 1991

and mid-sized IT

companies

Investors: Birch Hill Equity Par tners; Creation employees

Sector: Source: iSuppli Electronics Manufacturing Services

The Electronics Manufacturing Services (EMS) market has witnessed steady growth of 14% since the lows of 2009, and the market for 2012 stood at an estimated $387 billion. iSuppli expects the industry to slow to 4.5% in 2013 and continue to

grow at 5% from 2012 to 2016. Growth from consumer electronic firms, specifically those making smartphones, tablets, PCs and Internet-ready devices, are expected to offset a slowdown in legacy products. As per the latest survey by iSuppli, a lmost half

of the OEMs globally p lan to reduce the total number of contract manufacturers in order to maintain profitability and streamline operations, a strategy we have seen with Blackberry and Juniper Networks. The mid-tier EMS sector services small- to medium- sized OEMs and w ill grow with

its customer base. This is a clear opportunity for mid-market EMS companies that provide high-quality services in faster-growing markets. Creation is the largest private North American EMS company and 24th-largest EMS company in the world. Creation

is focused on the mid-market and has benefited from its growth for a long time. Creation Technologies has grown with the market and been profitable for 22 consecutive years.



Sub-Sector:

Source: AMI Mid-market EMS



Product/Service:

Creation serves OEMs requiring medium-volume, complex design and manufacturing solutions in medical, instrumentation and industria l, communications, computers and multimedia, aerospace and defense, transpor tation, environment and safety and security. The company operates two design centers (Denver and Milwaukee) and 13 manufacturing locations (four in Canada,

seven in the U.S., one in Mexico and one in China).

Customers:

Creation provides EMS services primarily to mid- market OEMs in Nor th America as well as globally. Its customer base is spread across industries previously mentioned, with the largest customers comprising 5% to 7% of sales. Creation’s top 10

customers account for ~22% of sales and there are no concentration issues. Generally, this customer sub-set picks up mid-cycle once the overall economy’s growth has been established.


Creation is a very well-run EMS company, serving small- to medium-sized IT companies. As the economy improves, so, too, will its core customer base. We would expect mid- tier EMS players’ growth rate to accelerate mid-cycle. Creation management believes that organic growth should also benefit from adding up to four additional design centers and fur ther increasing its

North American footprint. The company’s 2014 target is $600 mil lion in revenue and a 7% EBITDA margin on 65% to 70% utilization. This goal depends on the economy and exchange rates. Over the next few years the company expects sales to move to $750 million to $800 million in sales and over $50 million in EBITDA.

Source: iSuppli, AMI , New Venture Research, Company reports and CIBC World Markets Inc.


22

Exhibit 18. Desire2Learn – Learning Management Systems

Desire2Learn Incorporated

Private Employees: 725

CEO John Baker Approx Growth Rate: 30%+ Located: Kitchener, ON


Company NY 30%+ Founded: 1999

Investors: OMERS Ventures, New Enterprise Associates

Sector: Source: : GAVE Advisors

Global Learning Market Sub-Sector: Learning Management Systems


Est. TAM 2017: $65.6 billion Est. TAM 2017: n/a

Desire2Learn (D2L) is an education technology company that provides a state-of- the-ar t learning environment and solutions to engage and inspire learners. The company is a g lobal leader in cloud-based (SaaS) learning solutions and provides an open and extensible p latform to more than 700

clients serving 10 million learners in higher education, K-12, healthcare, government and the corporate sector (including For tune 100 companies). Desire2Learn has been in business for 14 years. It is a leader in an industry growing at a tremendous pace. I ts Learning Mana gement System provides a seamless experience for creation, delivery and management of courses, allow ing users to collaborate and connect around content and activities. I ts recent $80 million investor funding will help propel long- term research and development and further international expansion plans. More than 40% of its

employees are devoted to research and product development.

Product/Service:

Desire2Learn Learning Environment is used for online, blended, or hybrid learning programs. I t offers scalable best-of-breed

teaching and learning tools, meets high standards of accessibility adherence, and includes power ful measurement and assessment options. More than 90% of clients use D2L's SaaS Cloud. I t is the only eLearning provider to offer Student Success System, a predictive modeling engine to forecast student outcomes. I t offers ex tensive consulting services to assist w ith state and federal

regulations and pending legislation. The company's offerings also include mobile technologies, learning analytics, electronic portfolios, social media, open educational resources, and collaborative learning.

Customers:

D2L has over 700 contracted clients and over 10 million students and staff using its services. Of sales, 60% are to higher education, 20% to K-12 and 20% to corporate. Customers include the New Zealand Ministry of Education, New York City

Department of Education, Harvard Business School and Bank of Montreal. Contracts tend to be signed from three to 10 years and there is a 98% customer retention (over 100% revenue retention). Approximately 70% of sales are in the U.S. w ith the majority of the rest (20% ) in Canada.


As the EdTech market continues to grow, D2L plans to significantly ramp up hiring, expand the Desire2Learn footprint in emerging markets and make investments to its infrastructure. As analy tics, mobile, and cloud computing are technologies that are pushing a growing acceptance of new education models, the company is heavily investing in these areas. In 2013, D2L expects to continue to

profitably grow its sales throughout the world while maintaining its culture. D2L expects growth to accelerate internationally in a number of major markets in Europe, Asia, Oceania and Latin America. The company will continue to expand materially in Nor th Amer ica with schools and enterprises that seek to educate and evaluate its workforce.

New York City Department of Education

Case Study

• In 2010, won a bid for an online platform and content after a competitive bidding process involving 14 other vendors. • Won the bid due to experience w ith large-scale implementations, platform design, user experience, configuration flexibility and ability to implement in a timely manner.

• The platforms are used for credit recovery (as a replacement for students re -taking a course in class), advanced placement (students prepping for college) and blended learning (combining face- to- face student interaction in-class with computer out-of-class learning).

• Project went live in 2011 across a subset of schools and the rollout is ongoing across the city . • NYC DoE is the largest public school system in the U.S., serving 1.1 million students in a lmost 1,700 schools.

University of Guelph Case Study

• The University of Guelph had hit a wall in its eLearning mandate. The complexity of multiple systems, inability to back up course

content and lack of functionality and scalability limited the University to 45 online courses concurrently. • D2L was the only “learning management system” that provided the specific features that the school required (personalization for instructor, responsive help desk, flexible and scalable). • Upon implementation, teachers and administrators were able to create their personalized student experience online, adapt to

changes based on modification requests and improve overall efficiencies. • The school increased its distance learning graduation courses from 55 to over 1,000 and undergraduate from 96 to over 223 five years later. Partially as a result, undergraduate enrollment increased by 160% during that time. Growth was achieved with minimal

increases in personnel. Source: GAVE Advisors, Company reports and CIB C World Markets Inc


23

Exhibit 19. EnWave – Radiant Energy Vacuum For Consumption

EnWave Corporation

ENW – TSX Venture 2012 Sales: ~$0.5 million Employees: 24

Co-CEO Dr. Tim Durance Approx Growth Rate LY: 210% Located: Vancouver, B.C.

Co-CEO John McNicol



Sector: Radiant Energy Vacuum EnWave offers a varied technology for drying of materia ls known as Radiant Energy Vacuum (REV) dehydration technology. Microwave energy is applied under vacuum at lower temperatures. This method:

1) Takes minutes or hours versus days;

2) Preserves the nutritional value, flavor, color and texture better than spray & air drying. Similar to freeze drying; and,

3) Offer s similar and potentia lly significantly lower processing costs.



Sub-Sector: REV For Consumption

Est. TAM: $232 billion Est. TAM: $250 billion

Product/Service:

Machinery for REV and MIVAP drying procedures for food & pharmaceuticals. Drying is completed for food in/on

baskets, belts and/or trays and in vials or bulk trays for pharmaceutical products.

Customers:

Milne Fruit is the first commercial plant, delivered by Binder (86.5% owned subsidiary), production star t-up in April 2012. Collaborations with Nestle, Hormel Foods, Merck Pharmaceutical, Kellogg Co., Ocean Spray and others.


Forward:

Sales consist of machine sales with ~30% gross margin along with a high-margin royalty rate based on the final product

sales. Targeting: 1) Tier 1 multi-nationals, targeting annual royalties of $5 million to $50 million per customer division at fu ll technology adoption ( three to five years from license); and, 2) regional partnerships with limited territory , targeting annual royalties of $1 million to $5 million per partnership.

Source: Company reports and CIB C World Markets Inc.


24

Exhibit 20. Global Relay Communications – Database Management Systems

Global Relay Communications Inc.

Private 2012 Sales: ~$30 mil lion Employees: 240 Warren Roy, Founder and CEO Approx Growth Rate: 50% Located: Vancouver, BC


Investors: No Venture Funding

Sector: Source: IDC Global Big Data Technology Sub-Sector:

Source: IDC Relational Database Management Systems



Record-keeping of all communication is required by the financial sector's key regulatory bodies. These requirements have led to the creation of a

technology sector that suppor ts it. The Financial Industry Regulatory Authority (FINRA) is recognized as the largest and most reputable independent regulator in the U.S., overseeing more than 4,000 brokerage firms and more than 600,000 registered securities representatives. Member firms are expected to meet SEC, NASD and FINRA rules, one of which is SEC Rule 17a-4 related to keeping non-rewriteable or non-erasable formats of broker-

dealer records. This includes records from email, instant messaging, SMS, BBM, Bloomberg and Reuters. Technology companies that provide the technology and data warehousing that compete in this space include Autonomy (through its 2007 acquisition of Zantaz for $375 million), Global Relay, Iron Mountain, Microsoft and LiveOffice. Global Relay is the leader in the financial services community and is entrenched as the Message Archiving

Vendor in FINRA's Compliance Resource Provider Program. This status was won after a comprehensive two-year RFP with six competing firms.

Product/Service:

Global Relay offers services under the umbrella of unified communication designed to meet the requirements of the financial community for message archiving required for compliance purposes. The company's largest offer ing is the Global Relay Archive, which captures all internal and ex ternal e lectronic messages in real time. This includes email, instant messaging, Thomson

Reuters, Bloomberg, mobile messaging, social media messaging, ICE chat and more. Each day Global Relay will receive audit requests for 15 to 20 data exports. Global Relay owns its entire vertical, including the land, build ing, servers and proprietary software (and gains margin savings at each level) as well as a plan for proper scaling of server sizes and software upgrades. In

2013, Global Relay’s data centre was completed. This “green” facility in Vancouver, BC can offer services at ~45% of the cost of existing data centers by leveraging evaporative air cooling technology, eliminating the need for mechanical a ir conditioning systems. In addition, a flywheel UPS (Uninterruptib le Power Supply) is used instead of toxic lead/acid battery systems.

Customers:

Global Relay serves about 80% of the hedge fund market and 35% of a ll broker/dealers in Nor th America. Approximately 70% of sales are from the U.S., 25% from Europe and 5% from Canada. Global Relay services are priced per user per month. Global Relay serves 16,000 customers who pay on average $10 per user per month.

Business Plan

Moving Forward:

Global Relay is targeting fur ther penetration of the Nor th American broker/dealer market, currently just over one-third tapped,

including close to 80% of Nor th American hedge funds. Global Relay expects banking w ins are expected to lead the company’s revenue to over $100 million in less than five years. Insurance and medical are also areas that could see tremendous growth off a small base if and when this market segment becomes a focus. Longer term Global Relay has a revenue goal of $1 billion if it

successfully enters the insurance and healthcare markets. Competitive advantages include: Cloud services that a llow for archiving and searching ; Global Relay’s position as the Message Archiving Vendor in FINRA's Compliance Resource Provider Program; and, its low-cost data centre that meets the scalability,

performance, and security needs of global banks and enterprise customers. Another inherent competitive advantage is its Canadian location. Under the U.S. Patriot Act, section 215, the FBI can obtain a

court order to access records of an individual’s ex-parte without disclosing the reasons why. This has acted to steer a number of

foreign companies away from some of the larger U.S. cloud-based archiving companies. New products planned for 2013 include: Global Relay Archive for Mobile, a new end-to-end technology to capture tex t

messaging and call logs from mobile phones without a dependency on additional hardware or software. Also slated for 2013 will be the next generation of Global Relay Archive. Global Relay spent over three years and $8 million redesigning the core of its Archiving technology in order to provide the scalability necessary to service large enterprise customers such as global banks. The Global Relay Next Generation Archive is a single-message store solution scalable to support hundreds of petabytes of

normalized message data.


25

M&A has been a steady strategy for Global Relay and the company expects to continue it in order to grow market share more

rapidly. It is possible that Global Relay makes an acquisition to better position the company in either the insurance or health care markets. Finally, Global Relay Message, an enterprise messaging and collaboration platform, is being built specifically for regulatory

compliance in the financial sector. It w ill suppor t conversa tional trading, providing a more secure, more compliant alternative to systems used currently such as Yahoo Instant Messaging and AOL Instant Messenger. The company is position ed to leverage its relationships w ith Thomson Reuters, FINRA Broker-Dealers, Hedge Fund Prime Brokers and global banks, as well as its

archiving and messaging expertise, to create a viable platform. Source: IDC, Deloitte, Company reports and CIBC World Markets Inc


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Exhibit 21. Halogen Software – Talent Management Software

Halogen Software Inc.

HGN–TSX 2012 Sales: $38MM Employees: 297 Paul Loucks, CEO Approx Growth Rate: 32% Located: Ottawa, ON


Sector: Source: IDC Talent Management Opportunity Human capital is a major expense for most organizations across almost a ll industries. It is estimated that, in 2012, $8.5 trillion was paid to employees in the U.S.

(approximately 55% of GDP). While the total spend is enormous, it has been estimated that top per formers within an organization can produce 3x to 10x the output of an average per former in the same job. This means that extreme cost savings can be generated if a proper evaluation and identification of employees is under taken. In

an increasingly competitive marketplace, organizations are finally beginning to realize that th is is an integral component of running a profitable business. In a 2012 survey conducted by PricewaterhouseCoopers, 77% of CEOs planned to revise their ta lent

management strategies w ithin the next year. While a number of larger firms cater to th is market, including SAP ( through SuccessFactors), Oracle (Taleo) and IBM ( through Kenexa), Halogen focuses on a

distinct mid-market tier of companies, offer ing quicker implementations and ex tensive and personal IT suppor t. Ver tically integrated modules within individual markets, such as for healthcare or financial services, have also helped differentiate its products. I t is estimated that there are over 110,000 mid-market companies (100 to 10,000

employees) in Nor th America and 300,000 worldwide.


Est. TAM 2016: $10.3 billion Sub-Sector: Source: IDC Talent Management Software Sales

Est. TAM 2011: $3 billion Est. TAM 2016: $5.2 billion

Product/Service:

Competitive Advantage:

Software-as-a-Service (SaaS) cloud-based talent management solutions. Halogen’s TM suite has a set of software modules that provide integrated TM solutions. Each module is built organically and integrated into one platform. Examples of modules include:

• eAppraisal – Per formance management: Allows customers to manage per formance feedback and recognition, assess competencies, create per formance appraisals, and maintain employee talent profiles, among other abilities. • Halogen e360 multirater is integrated into eAppraisal for feedback during appraisal and assessment. Allows comments to be anonymous and for ex ternal viewing for customers.

• Competitive advantage is support, w ith over 90% of customer calls answered with live representatives w ithin 60 seconds. While a number of larger firms cater to th is market, including SAP ( through SuccessFactors), Oracle (Taleo) and IBM (through Kenexa), Halogen focuses on providing a highly differentiated solution specifically targeted at the mid-market. This

approach contrasts with complicated solutions targeted at large enterprises, which typically involve long implementation cycles and extensive information technology suppor t. Halogen enhances its solution with vertical offerings that include features, services and content for specific ver tical market segments, including healthcare, professional services, and

financial services, which has helped it to differentiate itself from hor izontally focused solution providers without limiting the company’s ability to scale. I t is estimated that there are over 110,000 mid-market companies (100 to 10,000 employees) in North America and 300,000 worldwide, representing a total addressable market of $15 b illion annually. Market penetration rates for dedicated TM applications in the mid-market are estimated to be only between 5% and 10% . Halogen has

established a leadership position in providing a comprehensive TM solution in the mid-market, according to Gartner. Halogen’s competitive advantages are its mid- market focus (both in its solution and go- to-market strategy), its vertical offerings, and its h ighly customer- focused approach, which has resulted in higher customer satisfaction than that of its

competitor s and a customer retention rate greater than 90% .

Customers:

The company has over 1,750 customers, w ith its top five customers representing less than 6% of revenue. No one company was more than 2% of sales in 2012. Of customers, 90% elect on-demand access. The industries they fall under include education, financial services, healthcare, hospitality, manufacturing, professional services, as well as the public sector.

Subscriptions are typically two years with automatic renewal.


1) Halogen completed its IPO on May 17, 2013. The company’s key growth strategies are: 2) 1) Aggressively expand customer base as the talent management market is large and under-served, by increasing brand

marketing and sales professionals in Nor th America, the U.K., Australia and other areas where Halogen has no presence; 3) 2) Retain and expand business with existing customers through follow-on sales of new modules and additional seats;

4) 3) Expand total addressable market through new product offerings ; and, 5) 4) Consider acquisitions in businesses, technologies and solutions that complement existing offer ings in an effor t to

accelerate growth, enhance capabilities and broaden current solutions. Source : Gartner, IDC, Company reports and CIBC World Markets Inc


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Exhibit 22. HootSuite Media – Social Media Market

HootSuite Media Inc.

Private 2012 Sales: ~$70 mil lion Employees: 290

CEO Ryan Holmes Approx Growth Rate LY: 500%+ Located: Vancouver, B.C.



Investors: OMERS Ventures; Millennium Technology Ventures; Blumberg Capital; Hearst Ventures

Sector: Source: Gartner Social Media Market

Social media is arguably the fastest-growing industry in technology today. Growth is being driven by an increasing spend on customized tex t ads, localized promotions and mobile Internet and app usage. At the same time, advertisers are expected to keep up not just

with their market but with their con tent on the dozens of popular and ever-changing emerging social media sites, including Facebook, Twitter, LinkedIn, Tumblr, Instagram and Pinterest.

Historically, the lack of direct sales (a direct link from social media to the top 500 online stores accounted for <1% of sales on Black Friday, according to IBM) has given advertisers a reason to largely ignore a major effort here. However , the successful Obama 2008 and 2012 social media campaigns along with those of the Blair Witch Project, Dove

and Hertz have begun to show advertisers that brand perception, buzz and interaction can affect a consumer’s opinions and eventually lead to sales at a much lower cost. One of the biggest trends, however, that is difficult to ignore is that 58 million Americans use soc ial

sites daily, spending 3.2 hours a day here (ages 16 to 64, according to Nielsen). At the same time the number of U.S. households w ithout te levisions has grown from 2 million in 2007 to 5 million in 2012 and this number is expected to grow. As consumers’ focus

continues to shift, so, too, will ad budgets. Reaching the millions across the various social media platforms will be one of the biggest challenges facing advertisers.

Est. TAM in 2011: $12 billion

Est. TAM in 2016: $34 billion

Sub-Sector:

Source BIA/Kelsey Social Media Ad Market

Est. TAM in 2012: $4.6 billion

Est. TAM in 2016: $9.2 billion

Product/Service:

HootSuite's web-based social media management system allows users to monitor, manage and view analy tics of all major social media sites simultaneously. The platform allows corporate customers to run campaigns across multip le social

networks through a dashboard. HootSuite's inter face is available on the web and as an app on popular OS platforms. In September 2012, HootSuite added conversations (a messaging service) to its dashboard, whereby employee accounts can be segregated into groups to foster internal communication. The tool also allows users to assign and delegate tasks and

monitor execution. The company recently acquired Seismic in September 2012 to improve its enterprise reach. HootSuite offers a free, Pro ($10/month) and premium enterprise model starting at $1,000/month. The company launched its first paid product in 2011 and the company expects sales to grow materia lly in 2013.

Customers:

HootSuite has over 5 million users. Customers include the NBA, Pepsico, McDonalds, Seagate and Lamborghini. About

40% of HootSuite’s users are outside of Canada.


HootSuite recently added real- time chat to its dashboard and continues to increase options for its enterprise customers. The company plans to form several more par tnerships w ith new growing platforms as well. HootSuite’s eventual goal is to grow to

become a disruptive force in social media.

Source: Gartner, BIA/K elsey, Nielsen, Company reports and CIBC World Markets Inc.


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Exhibit 23. Keek – Social Media Ad Market

Keek Inc.

Private 2012 Sales: <$10 mil lion Employees: 50

CEO Issac Raichyk Approx Growth Rate LY: n/a Located: Toronto, ON


Company NY n/a Founded: 2011

Investors: AlphaNor th Asset Management; Plazacorp Ventures; PowerOne Capital; Pinetree

Capital; Whitecap Venture Partners; AGF Investments; Cranson Capital

Sector: Source Forbes

Global Online Ad Spending Social media tops the list of industries with the most potential for growth over the nex t five years. As is apparent from Facebook and LinkedIn valuations, mature social media sites are still being valued at 5x+ forward Price/Sales or $3 to $5 per user. While thousands of

social media sites exist, scaling to the point where advertising revenues pay for in-house infrastructure or CDNs, salaries and space normally requires venture capitalists for early-stage funding. Perhaps the most impor tant statistics for social media start-ups are the number of monthly

active unique users and the number of net new subscribers/users per month. Assigning a Cost Per 1,000 Impressions (CPM) rate that advertisers would be w illing to reasonably pay, investors can then gain a sense as to when the company could hit profitability and be

self-sustaining.



Sub-Sector: Source

BIA/Kelsey: Social Media Ad Spending



Product/Service:

Keek allows users to quickly and easily post 36-second video clips from their mobile phones or desktops. Keek differs from YouTube not just in the length of video allowed but in its ease of posting “keeks” and distribution via Facebook, Twitter and Tumblr from a mobile phone. The vision for Keek is for it to become a communication tool similar to Twitter and Instagram, with followers receiving videos instantly rather than tex t or pictures.

In February, Keek had 150 million visitors who v iewed 3 billion pages during that month, or 20 views, on average, per visitor. During the month, Keek also had 25 million unique users. 200,000 new users continue to register daily. Users create more than 100,000 keeks per day. These figures compare to Facebook in the year prior to overtaking Myspace.com in the

summer of 2007 with 50 million unique users and 250,000 new users a day. Keek users create more original content than all the known social video competitors. Twitter's social video star t-up, Vine, which offers 6 second clips, has a small user lead in the U.S. but Keek has a lead in the rest of the world.

Customers:

Users are generally young, with 27% 13-17 years old, 38% 18-24, 20% 25-34, 8% 35-44 and 4% 45-54. The gender

demographics are male 51% , female 49% . Mobile devices account for 95% of keeks posted and 95% of page views. About 50% of users are from the U.S. w ith large followings in the U.K., the Middle East and Latin America. Among their mos t well-known active users are Kim Kardashian and the Kardashian/Jenner family, Ariana Grande, Victoria Justice, Adam Lamber t, Tom Daley, the NFL, PK Subban, and many of the Jersey Shore cast.


Forward:

As of February 2013, the number of Keek registered users has grown by 6 million month over month and page views 400%

in two months. The immediate goal is to expand the server infrastructure internationally. Keek expects to remain ad free for the immediate future, in order not to inter fere with the user experience. The company is well positioned to eventually dominate the rapidly growing mobile adver tising market, as shor t social videos provide a number of advertising oppor tunities

on the web and mobile p latforms. Funding should not be an issue, as there are few social media sites in the world posting the kind of growth Keek shows. Growth in Nor th America, Europe, Latin America and the Middle East is expected to continue. The Keek app has been ranked No. 1 in the social networking category in 13 countries, including the U.K.,

Argentina and Saudi Arabia. I t has ranked as high as second in the U.S. $30 million has been raised to date. ~$50 million is required to fund growth of the Keek network in the coming two years.

Establishing Keek’s business model is expected to take place w ithin a year, according to Keek. One model could be based on ads within the keek player after a keek. For example, th is ad model on 3 billion monthly page views at an average CPM

of ~$0.50 equates to an annualized sales rate of $18 million. Ad rates for Facebook are estimated at $0.25, Android rates at about $0.90 and mobile across all platforms remains very attractive at about $1.30. Assuming traffic grows 50% mon th over month, the site could potentially have the ability to generate well over $100 million from this one ad unit alone by December.

The company is p lanning several other ad units, some of which it believes may be even more lucrative. These include, for example, promoted keeks and klusters. Ads placed on the mobile app would likely yield even higher rate s.

Source: Forbes, BIA/Kelsey, O pera, Company reports and CIB C World Marke ts Inc.


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Exhibit 24. Kik Interactive – Mobile Messaging

Kik Interactive, Inc.

Private Sales 2012: NA Employees: 29

CEO Ted Livingston Approx Growth Rate: NA Located: Waterloo, Ontario


Company NY NA Founded: 2009

Investors: Foundation Capital; RRE Ventures; Spark Capital; Union Square Ventures.

Sector: Source: Mobithinking IM Loss In SMS Carrier Sales

The global instant messaging market, driven by the growth in mobile messaging apps and data plans, cost carriers approximately $4 billion in lost tex ting revenue in 2012. As per Informa, OTT (Over The Top) messaging traffic (19.1 billion OTT messages/day in 2012)

has surpassed SMS traffic (17.6 billion) although the number of SMS users (3.5 billion) remains far ahead of OTT messaging (600 million).

This growth in OTT messaging comes at the expense of mobile texting and previously popular landline services such as MSN Messenger, recently shut down by Microsoft. Among the most popular social media OTT apps are Facebook Messenger, WhatsApp (estimated at over 200 million users who pay $0.99/year, primarily in Africa, Latin America and the Middle

East), Viber (175 million users, free), Kakao (80+ million users primarily in Southeast Asia and Eastern Europe, free), Voxer (~70 million users, offered for free primarily in the U.S. but seeing decreasing interest after Facebook shut down connections via Facebook friends in

January), WeChat (300 million users primarily in Asia, free) and Kik (over 50 million users, primarily in Nor th America and Europe and also free). Currently , the majority of these platforms are in growth mode, looking to establish users at the expense of sales. Kik has

raised $29.5 million over two rounds of funding. The first round was used to help it grow at the pace of 200,000 users a week. I ts latest $19.5 million round is focused on looking to expand its “Cards” apps, w ith the goal of creating its own platform or app purchases within the Kik App itself.



Sub-Sector:

Source: Mobithinking IM Accounts Globally

Est. TAM 2011: 3.1 billion

Est. TAM 2016: 3.8 billion

Sub-Sector:

Source: Mobithinking Mobile Data Plans Globally

Est. TAM 2012: 1.2 billion Est. TAM 2018: 9.3 billion

Product/Service:

Kik is a free mobile messaging app launched in October 2010. Today , Kik has more than 50 million users across all the major mobile OS platforms. Approximately 200,000 users are being added every day, allowing users to share text, p ictures, videos

and voice messages. The company is expanding from a simple messaging app to a platform. An example of this would be its recently launched Cards, a set of lightweight apps that can be sent in open conversations and that will soon be opened to outside developers.

Current examples include YouTube, Reddit, Image Search, Sketch, and Squared Cards. The Cards are being written in HTML5, allowing , for example, a video to be easily shared within Kik (and go viral) versus other messaging apps that require the App to close in order to view the content. Also, compared to WhatsApp, a username is used rather than phone numbers and, therefore, provides increased privacy.

Customers:

The U.S. is Kik's largest market, accounting for 50% of its subscriber base, while two- thirds of its subscriber base is on the Android platform. Kik foresees strong penetration in Nor th America, Nor thern Europe, Saudi Arabia and Australia.

Business Plan

Moving Forward:

Kik expects to generate sales through: 1) banner ads; 2) gaming and apps, splitting revenues with developers; and, 3) unique

technologies. The strategy that appears most promising is the Kik Cards app model, which already has 25 million installs since November 2012. Even if only 5% of the currently growing userbase pays potentia lly $1 per month for unlimited downloading or another feature, gross revenues would surpass $10 million a year. The CPM model could be a form of revenue sustainability

and Kik could possibly extract over half a million per year with the current base if it chose to. Source: Marketwatch, Mobithinking, NY Times, Techc runch, Forbes, Financial Post, CCA Ev ents, Business Insider, Company reports and CIBC World Markets Inc.


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Exhibit 25. Kinaxis – Cloud-based Supply Chain Management

Kinaxis Inc.

Private Sales: $50 million+ Employees: 240

CEO Douglas Colbeth Approx Growth Rate LY: 25% Located: Ottawa, ON



Investors: HarbourVest

Sector: Source: Environmentalleader Supply Chain Management Software Market

Sub-Sector: Source: Forbes Cloud-based SCM

Est. TAM 2011: $7.7 billion Est. TAM 2010: $826 million


Effective supply chain management can save significant costs and time. The $8 billion spent annually on supply chain management software is undergoing material growth as businesses become increasingly aware of the Total Cost of Ownership (TCO) and benefits of SaaS supply chain solutions. The impor tance of operational reliability, predictability and agility is essentia l in today’s highly volatile and complex marketplace. Poor supply chain management can translate into holding inventory longer, increasing capital costs and decreasing customer satisfaction as poor service leads to

lost sales and lower margins over time. Major supply disruptions (such as the Thailand floods, causing semiconductor supply shor tages and challenging the top line for technology companies around the world) can change an organization ’s per formance abruptly if the capabilities are not in place to assess its impact to inventory and product availability and, subsequently, respond accordingly. The growing number and magnitude of risks

have helped increase awareness and recognition of the impor tance of supply chain management. As a result, supply chain management softwar e is witnessing mater ial growth as businesses seek new capabilities that can address current business realities. About 80% of the SCM industry sales come from North America and Western Europe, while much of the rest of the world remains untapped.

The market is dominated largely by conglomerates SAP (20% market share) and Oracle (17% ), with a number of players including Ariba, JDA Software, Manhattan Associates and Kinaxis. All major p layers continue to grow, with the largest source of growth being market penetration v ersus market share gains at th is point.

Product/Service:

Since 2005, Kinaxis has operated as a SaaS business model, the first in the supply chain sector. Kinaxis has a single product, RapidResponse, which can be broadly applied across the organization to address multip le supply chain functions, including inventory management, sales and operations planning, capacity and constraint management, demand planning,

supplier collaboration and integrated project management, to name a few. The product’s core competitive advantage is that it arms enterprise managers with complete supply chain visibility (including

real-time data updates when and as necessary), along with deep analytical capabilities to per form rapid scenario planning and analysis. RapidResponse is highly configurable to the enterprise, depar tment or functions ’ analy tical and repor ting needs. The planning engine integrates with Enterprise Resource Planning (ERP) systems to offer real- time planning and scenario simulation capabilities not otherwise available. Users can access the service from any web browser and in a highly

secured manner with near 100% uptime. The model is one where the customer decides the functional processes for which it w ill leverage RapidResponse and

subscribes for those application services under the SaaS offering. Customers typically subsequently expand their in itia l configuration, fur ther contributing to organic revenue growth.

Customers:

Customers include some of the largest technology hardware and manufacturing companies in the world, including Agilent,

Benchmark, Research In Motion, Celestica, C isco, Honeywell, Jabil, Volvo and a number of other b illion-dollar companies. Deals are normally signed for three to five years. Kinaxis' business model is achieving an 80% /20% mix of recurring/professional services revenue with growth rates in the mid-20% range. This model has delivered industry-leading gross margin and EBITDA.


Through its expanding par tner network, Kinaxis is targeting to further accelerate annual organic growth to the 30% range.

Source: Environmentalleader, Company reports and CIBC World Markets Inc


31

Exhibit 26. MOSAID Technologies – Intellectual Patent Market

MOSAID Technologies Inc.

Private 2012 Sales: ~$100 million Employees: 80+

CEO John Lindgren Approx Growth Rate LY 20% Located: Ottawa, ON

Est. Forecasted Growth By Company

NY 30%+ Founded: 1975

Investors: Sterling Partners

Sector: Source: MarketsandMarkets Global Intellectual Property Market

Sub-Sector: Source: MarketsandMarkets Unlicensed Telecommunications IP Market

Est. TAM 2011: $240 billion Est. TAM 2012: ~$4 billion assuming a 2% Royalty

Sub-Sector: Source: MarketsandMarkets Semiconductor IP Market



Patent licensing is now an established market, w ith over $200 billion a year collected globally and double-digit growth expected to continue over the next five years. Qualcomm tops a list of b illion-dollar pure-play patent licensing companies that include InterDigita l, Acacia Research, Tessera Technologies,

Wi-LAN, and MOSAID, among others. The role of patent specialists, whose business is entirely that of monetizing patents, has gained significant momentum over the last few years. RIM’s

$600 million settlement with NTP in 2006 and Nokia’s $2.3 billion pay ment to Qualcomm in 2008 were major catalysts in attracting attention to the space. The biggest attention-grabber, however, was the $4.5 billion sale of Nor tel's patent portfolio in 2011 to a consor tium of technology companies headed by Apple and Microsoft. This was followed in 2012 by the $6 billion (net of cash and deferred tax) sale of Motorola to Google pr imar ily for patents in a deal

that many felt was overpriced. Despite the headline news, however, settlements w ith OEMs remain difficult given a lack of experience by the patentholder in back-engineering a process to determine infringement, initiating and proceeding through two or more years of expensive litigation, and, perhaps most importantly, lacking credibility to negotiate in the eyes of the defendants.

MOSAID ’s roots began with key inventions related to circuit technologies used in DRAM back in 1975. I ts history and continued innova tion as a practicing memory entity render a license with MOSAID, as viewed by infringers, the cost of doing business. This makes negotiations and renewals less lengthy and costly. This same credibility has spread to communications and wireless w ith the signing of Nokia and Samsung wireless to licenses, and eventually to

Nokia viewing MOSAID as credible enough to monetize a por tion of its own patent por tfo lio.

Product/Service:

MOSAID licenses its por tfolio of approximately 6,000 patents, including Core Wireless (a large portfo lio of wireless patents originally filled by Nokia). The patent portfo lios owned by MOSAID include semiconductor, wireless, micro components and

power-over-Ethernet patents. I t also purchased hybrid electric vehicle patents in 2012 from Azure Dynamics and believes it can leverage its e lectrical engineering talent here.

Customers:

In total, the company has signed over 70 agreements, contributing to over $100 million in license revenues in 2012. The por tfo lio is well diversified and licensees include Samsung, Texas Instruments, Hynix, Micron and Nokia.


MOSAID has nine licensing programs, including the Core Wireless program. Over the next three to five years, the company is targeting $200 million–$500 million in revenue. MOSAID also believes the Core Wireless program will generate in excess of $1 billion in revenue over its life. MOSAID ’s business model provides significant leverage once its fixed cost base has been

covered. The company is targeting its first material Core licensing agreement in 2013. Core Wireless holds the assets of 2,000 w ireless patents from Nokia. These patents cover over 49 different countries. Through

Core Wireless, MOSAID is now pursuing royalty agreements with all the major unlicensed OEMs, including Apple. MOSAID expects that tota l royalties from Core Wireless w ill surpass $1 billion, even assuming no growth from the current major vendors. By 2014, four of the largest five wireless vendors w ill be unlicensed to Nokia. Many of Nokia ’s key patents are good for another 10 years and agreements covering this period should be signed.

Source: MarketsandMarkets, Company reports and CIBC World Markets Inc


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Exhibit 27. Nanotech Security – Anti-counterfeiting Security Feature

Nanotech Security Corp.

NTS – TSX Venture 2012 Sales: < $10 million Employees: 11

CEO Doug Blakeway Approx Growth Rate LY n/a Located: Surrey, BC

Est. Forecasted Growth By Company

NY 100%+ Founded: 1985

Pro Forma Net Cash ~$1 million

Market Capitalization $25 million

Sector: Global Counterfeiting Market Sub-Sector: Anti-counterfeiting Security Feature Market

Est. TAM 2012: $650 billion Est. TAM 2012: ~$20 billion

Sub-Sector: Hologram Market Sub-Sector: Security And Brand Authentication

Est. TAM 2012: $8 billion Est TAM 2012: $2.5 billion

According to the FBI, counter feiting is the crime of the 21st century. Counter feiting has moved beyond currency and now impac ts several industries, including consumer electronics, luxury brands, spor ting equipment and pharmaceuticals. Examples include over $3 billion in counter feit printer cartridges sold last year and $75 billion of counter feit pharmaceuticals. The International Chamber of Commerce estimates that the global economic value of counter feit and pirated products is over $650 billion annually and it was anticipated to increase to $1.77 trillion by 2015.

Governments and corporations use several technologies to reduce counter feiting. The most common are holograms and color-shifting ink but others include watermarks, microtex t, security threads and UV and IR strips. Given that holograms and color shifting ink are technologies that are over 40

years old, counter feiters have become experts at reproducing fakes. Holograms are generally stuck onto packaging or products and can easily be removed and placed on higher-value counter feit goods. Nanotech Secur ity has developed a new, more secure and more versatile technology that is directly embedded onto packaging or products, eliminating the ability to remove the security feature.

The estimated US$8 billion global holography market comprises different sectors, such as scanning & imaging, testing, information storage, optical elements, etc. One of the fastest-growing sectors is the security and brand authentication sector, currently valued at approximately US$2.5 billion. Since the first implementation of holograms on commercial products in 1982, more and more products are relying on security hologram s as the first line of

protection against counter feits. Some of the major sub-sectors include banknotes ($350 million), government IDs ($635 million) and brand protection (~$1 billion), according to the International Hologram Manufacturing Association: Holograms: The First L ine of Defense in the Battle against Packaging Counter feits (July 18, 2008).

Product/Service And Competitive Advantage:

Nanotech Security has developed a security feature based on nanotechnology called KolourOptik®. KolourOptik is constructed of hundreds of millions of nano-holes, smaller than a wavelength of light. When light hits the holes it captures and reflects only a single frequency of light, creating unique optical images of pure HD color without the use of any dyes or

pigments. KolourOptik can be embedded on almost any sur face, including poly mers, packaging, metal or cloth. Given its optical characteristics, KolourOptik has overt, covert and forensic security features demanded by government agencies for the banknote industry.

Customers:

Nanotech has no material customers but is in discussions with several Federal Reserves about using KolourOptik on

banknotes and coins. While the sales cycle for these customers is generally long (about a year), the company is also in discussions with several consumer electronics companies that are looking to use KolourOptik for devices like smartphones, laptops and printer car tridges. The sales cycles for these opportunities are much shor ter and management anticipates initial

contracts and revenue by the end of 2013.


Nanotech is expected to generate two types of revenue: 1) traditional revenue from the design and manufacture of the master copy of the design; and, 2) royalty revenue per 1,000 KolourOptik® nono- tags produced. While pricing will vary

depending on the complexity of the design and the volume of tags ordered, management anticipates royalty rates of between $2 to $18 per 1,000. The focus will be on the recurring royalty revenue as gross margin is anticipa ted to be 90% +. Initia l contract wins would validate the technology and star t to generate recurring royalty revenue for the company. Nanotech

is in discussions with several consumer technology firms and if any one of these materialize into contracts, management anticipates the company to be in a break-even situation. Initial d iscussions are also taking place w ith clothing brands, sporting goods brands and pharmaceutical brands interested in using KolourOptik.

Source: Company reports and CIB C World Markets Inc


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Exhibit 28. PointClickCare.com – SaaS For Skilled Nursing

PointClickCare.com

Private 2012 Sales: $59 million Employees: 600

CEO Mike Wessinger Approx Growth Rate LY: 34% Located: Mississauga, ON


Company NY 36% Founded: 1995 Investors: JMI Equity

Sector: Source: MarketsandMarkets EHR Software Market

Sub-Sector: Source: IDC SaaS For Skilled Nursing

Est. TAM 2012: $4.3 billion Est. TAM 2011: <$2 billion


The adoption of Electronic Medical and Health Records (EMR) in the U.S. has grown steadily, with over 77% of U.S. hospitals h aving achieved a

measure of basic EMR usage, up from 71% in 2011. In the U.S., the market is benefiting from the American Recovery And Reinvestment Act (ARRA) financial incentives for moving to paper less records as well as from cost savings from the desire to go paperless and reduce manual errors. At the same time, an aging population is pushing pr ivate funding for assisted nursing higher every year. Overall EHR adoption rates are thought to be highest in the U.S. and Canada and companies offering EHR solutions in Nor th America are considered first movers versus the rest of the world. In APAC, the

EHR market is expected to rise from $1.2 billion in 2012 to $2.2 billion in 2018. Software for long-term care is the target market. IT as a percentage of the long-term care market is ~1% of the total market, which is estimated at

$250 billion for long- term care. Ver tical SaaS apps are, and will remain, one of the fastest-growing segments of this market. PointClickCare.com (PCC) leads the market with a 40% share. Its main competitors have lost share and include American Health Tech, Health Medx and MDI Achieve.

While non-profit organizations, such as the College of Physicians and Surgeons of Ontar io (CPSO), have attempted to rectify the issue of record losses by setting rules such as a 10-year minimum record requirement, human error still exists and no real attempt has been made in terms of achieving actual solutions w ithin government. This has opened up the market to over 700 companies offering some kind of EMR solution ov er the last two years. Longevity and viability of these solutions, however, are proving to be more of an unknown and healthcare facilities are increasingly turning to proven

solutions.

Product/Service:

PCC is focused on long- term care & post acute care providers (i.e., Nursing Homes, Assisted Living Facilities and Home Health agencies). PCC offers a web-based Software-as-a-Services (SaaS) solution that includes an integrated and

streamlined approach to clinical, b illing and administration functions of various tasks involved in the EHR process. Examples of its products include care plans, assessments, diagnosis, medication management, billing and A/R, CRM, and accounting functionality, each module integrated w ith other modules. For example, a change in the assessment tool triggers changes in

care plans, billing and medical diagnoses. PCC’s business model is to charge monthly per bed or unit. PCC charges up to $0.50 per day per patient. Additional revenue comes from add-on modules, including point of care and pharmacy integration.

PCC’s competitive advantage comes from offering the industry’s most comprehensive EHR that integrates clinical and financial records. I t is a full SaaS offering that can scale beyond its competitors. I t also offers dozens of add-on modules,

built-in safeguards to help avoid mistakes. PCC’s offering is suppor ted by 200 developers. I ts nex t phase of product developments include broadening the offering to existing customers for products that are not fully integrated or automated currently, such as therapy, physician chart access, and medical lab results.

Customers:

PCC serves 8,500 homes within its target market in the long-term care sector in Canada and the U.S. PCC’s core market is skilled nursing facilities, in which it has a 40% market share in North America. PCC is penetrating the assisted living market and holds the leading market share with approximately 12% . The company serves nine of the top 10 long- term care providers in North America. All sales are undertaken through direct sales channels. The client base of more than 1,800 companies

includes HCR Manor Care, Genesis, Ex tendicare, Golden Living and Kindred Healthcare.


PCC plans to focus on its market share organically and through tuck-in acquisitions. Growth from existing customers would be through expanding its product line to include services to adjacent markets, such as retirement homes, home health, dietary,

and pre-admission. The company estimates that 2013 sales should be at least $80 million with gross margins on recurring revenue running at an impressive 82% . These high margins allow PCC to choose how aggressive it wants to be on any expansion of its sales force and suppor t in Nor th America and the rest of the world.

Source: IDC, MarketsandMarkets, Report Linker, HE R Intelligence, EMR Daily News, Health and Management, Company reports and CIB C World Markets Inc


34

Exhibit 29. Real Matters – Property Inspection Marketplace – Insurance

Real Matters Inc.

Private 2012 Gross Sales: ~$135 million Employees: 230

CEO Jason Smith Approx Growth Rate: 75% Located: Markham, ON and Buffalo , NY



Investors: Jason Smith, Whitecastle Investments, Altus Group, Wellington Financial

Sector: Source: IBIS

Property Valuation Marketplace – Mortgage

With the bursting of the housing bubble and the introduction of the Dodd-Frank Act in 2010, a firewall was mandated between front-line loan officers in banks and appraisers, creating a larger role for intermediaries or Appraisal Management Companies (AMC). While the overall appraisal

market dropped from $5 billion at its peak in 2008 to $2.5 billion today, the increased rate of full appraisals on mor tgages and the increased outsourcing of the appraisal management function actually translated into a boom for AMCs. Traditional AMCs, however, have a high cost to

manually manage an appraisal and, w ith increasing regulation and complexity in the industry, their ability to invest funds in technology and renovate their business models to dr ive better appraisal outcomes has been limited. Over the last nine years, Real Matters has spent tens of millions on technology and analytics to measure the performance of and drive competition

among over 23,000 residential appraisers across North America. The result has been significant improvements in appraisal turn-around time and quality, which has translated to a competitive advantage for the company and large market share gains, positioning Real Matters as the

third-largest independent provider of appraisals in the U.S. and Canada.

Est. TAM 2012: $2.5 billion residential

properties Est. TAM 2016: $4 billion residential

properties

Secondary Sector: Source: IBIS

Property Inspection Marketplace – Insurance



Product/Service:

Real Matters’ 100% -owned subsidiary, Solidifi, is an appraisal management company (AMC). An AMC receives an appraisal request from a mor tgage lender then assigns the request to one of its approved appraisers in the area. The business model with general fees is shown below. Actual fees likely differ from those shown.

Firm for mortgage Appraisal Management Firm A

Lending Arm Firm Keeps $200 (costs 150-200)

of U.S. Bank

$400 spent

Solidifi (Real Matters)

Firm Keeps $80 (costs 15-20)

Appraiser used receives $200

Appraiser used receives $320

Competitive Advantage: 1) Faster turnaround times: Real Matters uses real- time communication w ith cloud-based databases compared to its peers ’ use of a manual, staff-heavy approach, with basic workflow technology. This allows Solidifi to offer 30% to 50% faster turn-around

times. 2) Improved Accuracy: A large concern lenders have post the housing bubble is the accuracy of proper ty valuations. Real Matters keeps a smaller por tion of appraiser fees (~20% ) due to the lower variable overhead that results from the technology

and analytics the company has developed. The extra savings are passed down to independent appraisers. Their per formance is tracked in Solidifi's database so that future business is assigned to the most competent appraiser in the area. This has crea ted a distinct and necessary niche for Real Matters, w ith the lenders as well as with the over 23,000 appraisers with whom Solidifi

works. Pricing: As most appraisal fees are passed on to the borrower through mor tgage costs and risk management, the market is not price driven but is still subject to regulatory requirements and investor scrutiny. Real Matters charges the lenders competitive rates. A typical AMC charge is between $300 and $500 but depends on the complexity of the proper ty.

Customers:

The company has a 7% market share in the U.S. (No. 3 player), and is the provider of choice for 50% of the top 50 lenders in the

U.S. Its largest competitors (ServiceLink and LPS) each have approximately a 15% share and the market remains diversified and very fluid. In the insurance market, Real Matter s is the No. 2 p layer in Canada.

Business Plan

Moving Forward:

Real Matters’ current business model is $135 million in gross revenue from lenders, $25 million in gross profit after paying appraisers, and EBITDA positive for over 18 months despite an aggressive growth trajectory and R&D investments. The

company has been growing by 50% to 75% per year. According to the company, future growth should come from: 1) continued increases in share gain from other appraisal management firms ; 2) a continued return to stronger housing star ts and mortgage lending that had peaked at over tw ice the current levels; 3) growth in the U.S. insurance industry; 4) growth in overseas markets;

and, 5) new markets for the network and technology and new products. Source: IBIS, Company reports and CIBC World Markets Inc


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Exhibit 30. Redknee Solutions – Real-time Charging/Billing

Redknee Solutions Inc.

TSX – RKN Sales: $57 million Employees: 1,600

CEO Lucas Skoczkowski Pro-forma sales: $240 million Located: Mississauga, ON

CFO David Charron


Company NY 12% + Founded: 1999

Pro Forma Net Cash $76 million


Sector: Source: IBS Business Intelligence Software Sub-Sector: Real-time Charging

Est. TAM 2012: $12.9 billion Est. TAM 2012: $1.5 billion

Est. TAM 2016: $17.1 billion Est. TAM in 4 Years: $2.2 billion Increasing smar tphone and tablet penetration is pushing network operators to match rising data ARPUs wi th increased service to the end -customer.

This trend has led to a demand for convergent billing and other such services. In the post-2008 era, the competitive landscape has made it tougher for operators looking to improve profitability and focus on the critical aspects, like brand build ing and bandwidth procurement. This desire has led to demand for Redknee’s solutions, as operators can offload these services and focus on business-critical issues.

On March 30, 2013, Redknee acquired Nokia Siemens ’ Networks' Business Suppor t Systems (BSS) unit for anywhere between €15 million and €35 million euros depending on the success of the business unit. This materially enhances Redknee’s rating and charging solutions for Tier 1 communications service providers.

The addressable market for real- time charging for the combined Redknee / NSN BSS entity is $1.5 billion. The estimated CAGR for th is market is 12% . Redknee / NSN combined are third in market share behind Ericsson and Huawei. Key growth drivers are the change to LTE networks, networks of

brands, proliferation of Mobile Vir tual Operator (MVOs), and large global ethic communities, which are all contributing to the need for "real- time" billing capabilities.

Product/Service:

TCB: Redknee provides converged billing, rating, charging, CRM, invoicing, wholesale, and content settlement. NSN BSS is

focused on real-time billing for rating and charging. This allows pre-paid or post-paid subscribers to track their usage for voice, data and messaging in real- time, as well as their current and histor ical balances for each and the ability to pay. The user also has the ability to activate, change or cancel packages immediately or choose a recommended package (calculated by the TCO) that would save the user the most. The

advantage of the entire system is that it is based on real-time data versus monthly billing data, and offers a suitable plan to the subscriber. The acquisition of NSN’s BSS business has given Redknee NSN’s charge@once products, offering pre-paid and converged

billing, to Tier 1 network operators. Redknee also acq uired NSN's policy management solution (PCRF), which enables operators to send real- time notifications and promotions based on subscriber behavior and usage. I ts customer base includes business from carriers from around the world.

Both product sets are sold as software licenses, with ongoing suppor t and maintenance. Redknee also offers a SaaS cloud model. Redknee + NSN BSS combined competitive advantages include: A strong customer base of more than 200 customers

across 90 countries, including more than hal f of the Top 100 operators in the world. Redknee provides one of the industry ’s most comprehensive por tfolio of h ighly scalable and flexible revenue and subscriber management solutions for Tier 1 operators, MVNE/Os and service providers. At one of its customers, it is supporting more than 85 million subscribers in one

deployment.

Customers:

Vodafone, T-Mobile, Orange, Telefonica are customer examples. New customer examples include: Vodafone India, Vodacom, and Smar t. Overall, Redknee has more than 200 customers in 90 countries and serves more than 2 billion

subscribers. Redknee's two largest customers accounted for 19% of revenue. Of revenue, 50% was recurring in 2012 versus 42% in 2011 and this trend is expected to continue. Software and services comprised 59% of revenue in 2012 and is generated from licensing software products and providing the related hardware.


36


In 2013 the integration of NSN BSS will be Redknee's primary focus. Specific financial details about th is acquisition have not been provided. Revenue of ~$240 million from $150,000 sales per employee. Gross margins of 65% are expected to be

lower when combined with NSN BSS. The operating margin goal is 5% –8% by April 2014. Longer term the goal is 12% –15% by April 2015. Currently, the combined business is roughly break-even.

The NSN BSS acquisition adds 1,200 BSS employees to Redknee's existing 417 employees. Redknee will have custo mer contracts not just from NSN’s BSS business directly purchased but from other businesses of NSN which were not par t of the transaction. Redknee has previously lost a number of large deals due to its lack of size and this deal appears to address

those concerns. Integration milestones for 2013 include: – BAR report mid-June, which w ill detail cer tain financial metrics for NSN BSS

– FY Q3/13 repor t mid-August (First quar ter of combined entity) – FY Q4/13 repor t mid-November (Second quar ter of combined entity)

Source: IBS, Company reports and CIBC World Markets Inc


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Exhibit 31. SkyWave Mobile Communications – M2M Satellite Market

SkyWave Mobile Communications Inc.

Private Sales: $50 million to $100 million Employees: 180 CEO Pui-Ling Stanley

Chan Approx Growth Rate LY: 20% Located: Ottawa, ON


Investors: McLean Watson, Investissement Desjardins; GTI Capital. Inmarsat holds 19% equity interest.

Sector: Source:

Information Age M2M Satellite/Cellular Sub-Sector: Source: NSR North American M2M Satellite

Est. TAM 2012: $44 billion Est. TAM 2012: $380 million

Est. TAM 2017: $290 billion Est. TAM 2017: $700 million

The satellite market for reducing loss of assets, improving efficiency and lowering overall transportation costs is becoming an increasing focus for mature and maturing transpor tation companies / organizations looking to improve their bottom line. With machine- to-machine (M2M) technology becoming increasingly widespread and cost effective, it is thought that this will be the next major technology wave to a id companies in achieving / improving profitability.

At CES 2013, Audi, showcasing a connected car able to park itself via a smar tphone app, received a large amount of attention. Ford, GM and auto-supplier Delphi a ll offered innovative wireless solutions for the car. While flashy, M2M w ith consumer cars has not even hit the global auto market

in a material way. Currently, the M2M market is primarily seeing uptake with vehicle fleets, and this market is continuing to grow not only in penetration but in services offered. The overall M2M automotive market is almost entirely upside versus the current state. Fleet management M2M solutions are generally known as telematics and differ on price, software, services, connectivity and specialization. The market

is highly fragmented, with the largest fleet management solution company (Qualcomm) holding only 5% of the global market. Competitors include Iridium, Orbcomm, Qualcomm, NextBus and Fleetmatic, which had its IPO in October 2012 and the current valuation of which stands at a P/S of 5x and a P/E of 26x next year’s earnings.

Product/Service:

SkyWave is aligned with Inmarsat to provide Satellite/Satellite-Cellular Communication for M2M applications for

remote monitoring of fixed and mobile assets. SkyWave provides the technology and charges subscribers a monthly services fee. Inmarsat provides the satellite communication access. When combined, this includes remote vehicle tracking of mobile assets such as trucks, freight cars, marine vessels, aircraft and heavy equipment. In the oil & gas

market, Sky Wave also offers monitoring/control of remote fixed assets such as pipelines, pumps and wellheads, in addition to workforce automation, which automates the workflow of e lectronic forms, etc. In 2009, Inmarsat acquired a 19% stake in Sky Wave and formed an agreement for direct distr ibution for its satellite capacity. In October of last year,

Sky Wave announced early success for its new low data rate service, IsatData Pro, shipping 12,000 terminals. The product’s primary competitive advantage s are a significant payload capacity compared to other satellite-based M2M services in the market and its availability anywhere around the globe combined w ith attractive pricing . The technology addresses next-generation satellite and cellular protocols.

Customers:

Transportation, maritime, oil & gas and utility firms that require two-way data communication with their fixed and mobile assets. Sky Wave has 240,000 subscriptions and the monthly ARPU is ~$10. These subscribers come from over 400 channel par tners across 75 countries and over its h istory Sky Wave has shipped over 600,000 terminals. Of

customers, 90% are buying the solution directly from Sky Wave.


Sky Wave's business is 50% hardware and 50% services. I t has revenue of ~$50 million, gross margins of 45% , is profitable and is growing at just under 20% . According to Sky Wave, growth (current and future) comes from customers whose vehicles cross international borders where roaming charges are becoming increasingly prohibitive. Other growth

markets are fleets operating in remote geographic areas with weak cellu lar zones and those who require redundant coverage at a ll times. There is also increasing awareness of the company’s ability to access both satellite and network coverage through IsatM2M and IsatData Pro. In 2012, Sky Wave created a M2M business unit. I t would be generally

reasonable to expect that the company will be able to scale up this segment as well as pursue targeted M&A w ith its more than $25 million in cash.

Source: Info rmation Age, NS R, Company reports and CIBC World Markets Inc.


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Exhibit 32. Solace Systems – Application Infrastructure And Middleware

Solace Systems Inc.

Private 2012 Sales: $20MM to $40MM Employees: About 150

CEO Craig Betts Five-year rev. CAGR 2011: 1,512% Located: Ottawa, ON



Investors: Teachers’ Private Capital; Edgestone Capital Par tners; Tandem Expansion Fund; Genuity Capital Partners; Wesley Clover

Sector: Source: Researchand-markets

Global IT Services Sub-Sector: Global Application Infrastructure And Middleware


Est. TAM 2017: $1,147 billion

Communication between clients and servers is the key purpose of middleware IT solutions and often brings together multi -brands and various

hardware/software solutions. Typically, solutions for running an in-house IT system can be material, from purchasing multiple servers, software and O/S licensing, network, storage, overall power, manpower and ongoing maintenance costs. Among the major players in messaging middleware are IBM, TIBCO, Solace, Informatica, Oracle, Microsoft and Software AG.

Product/Service:

The Solace 3200 messaging appliances increase speed, reliability and capacity while utilizing less space, incurring lower maintenance costs and reducing necessary manpower. Solace estimates the total cost of ownership can be reduced by 50% to 80% versus alternative solutions.

Customers:

Customers include firms of various sizes and industries around the world. Some examples include Barclays Capital, The Domestic Nuclear Detection Office (DNDO), eBay, Harris Corporation, London Stock Exchange, RBC Capital Markets, and myspace.

Business Plan

Moving Forward:

Solace expects to continue to penetrate the investment banking, telecommunication, government and Internet markets. While

fir st customer deals tend to be measured in the hundreds of thousands, many customers become repeat buyers with full deployment sales potentia l of $10 million to $100 million, suggesting the company is still in very early stages. The company expects growth of over 40% in sales in 2013, w ith gross margins above 70% and a model that involves a

direct-to-the-customer sales force. Source: Research and Markets, GAVE A dvisors, Company reports and CIB C World Marke ts Inc


39

Exhibit 33. Spectra7 Microsystems – Analog IC Market

Spectra7 Microsystems Inc.

TSX – SEV Sales: <$10 mil lion Employees: 51

CEO Tony Stelliga Approx Growth Rate LY: n/a Located: Markham, ON


Company NY: 100%+ Founded: 2012

Pro Forma Net Cash: $2 million


Sector: Source: Resourceandmarkets Analog IC Market

Increasing demand for higher resolution displays, image quality and bandwidth is dictating an unprecedented change in consumer electronics and infrastructure products, creating an insatiable appetite for h igh-performance analog semiconductors. At the same time,

te levision, tablet and handset designs are requiring smaller and thinner designs with the expectation of steady or even lower costs. Next-generation 4k HDTVs currently only deliver 4:2:0 color at 24 frames per second ( fps) and can only reach 4:4:4 color on 1080p HDTVs

(60 fps). Spectra7’s solutions allow true 4:4:4 deep color on 4k HDTVs at 1/8th the pr ice of optical solutions on an ultra-thin cable; make TVs up to 40% thinner with Silicon Tuners vs. traditional “Electromechanical” tuners; and, make Microcell Base Stations a reality at half the size by replacing electromechanical duplexers with silicon.

Much of the size reduction is being done by replacing existing electromechanical devices with silicon. Silicon analog semiconductors condition and regulate functions such as temperature, electrical current and high-speed signals and display color and antenna

waveforms, versus digita l semiconductors that process binary information or mixed signal that handle both functions. The benefits of analog semiconductors are that they typically have longer product life cycles, requiring a lower capital investment, and are more

specialized and varied than digital semiconductors.



Sub-Sector: Spectra7 Semi Opportunity



Product/Service:

Spectra7 specializes in high-speed and high-per formance analog integrated circuits. I ts current offering includes very early-stage use in a number of applications, including:

• Silicon HDTV tuners, offering smaller sizes at lower power and up to 1/8th the cost ($0.50). • A leader in active HDMI cabling. I ts chips offer a unique cable signal process that is generally 3x thinner, 50% cheaper and 150% faster than existing solutions. I t would also allow for longer cables (should be available by mid-summer). The market for

th is is approximately 1.2 billion HDMI cables. • Isolation enhancer for LTE and mobile Internet that is 10x smaller and 5x cheaper than previous solutions of an air cavity duplexer and ceramic duplexer.

Customers:

Customers and potentia l customers would include television and HDMI out devices, HDMI cable manufacturers and base station manufacturers.


Spectra7 announced a design w in with Konka, a TV manufacturer of over 10 million TV sets. Supplying Konka (China’s largest TV producer) with its low-cost, silicon, analog TV tuner on a single chip is a positive first step in gaining acceptance by larger manufacturers.

A strategic alliance with leading consumer electronics player Monster will also be important. Spectra7 is expected to continue to add TV, HDMI and base station customers through 2013 and 2014. Spectra7’s goal for 2014 is to generate revenue of $14 million. Gross margin can generally be expected to be over 50% with base station sales a positive driver at about a 70% gross margin. Operating costs are $6 million a year and the company would be break-even at

the 2014 target. Source: ADS Reports, Company reports and CIB C World Markets Inc


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Exhibit 34. tucows – Domain Name Registrations

tucows Inc.

TSX – TC Est. 2012 Sales: ~$110 million Employees: ~200

CEO Elliot Noss Approx Growth Rate LY: 20% Located: Toronto




Sector: Source: Yankee Group

Domain Services Domain name registration is an initial step in setting up an Internet site. There are ~200 million domain names registered around the world with over a million names expiring each month. Expenses for webhosts and ISPs registering individual names take up time from core

competencies and service companies are increasingly realizing the value of third-party domain registration and services surrounding it. tucows’ OpenSRS business manages over 14 million domain names and offers other value-added services.

tucows’ network infrastructure, billing and provisioning have led to email and domain services (hover), domain name sales (YummyNames), an online video network (butterscotch), subscriber management, billing and provisioning software for ISPs (Platypus), and a Mobile Virtual Network Operator (MVNO) called Ting. Ting’s “metered” mobile services were launched

in May 2012 and are growing at a rate of 6% week over week. At September 2012, Ting had 5,000 subscribers.



Sub-Sector:

Source: Visiongain Mobile Virtual Operator


Product/Service:

Of sales, ~60% come from OpenSRS, primarily volume generic top-level domain registrations, currently consisting of over

13,000 resellers in over 130 countries. tucows is the world’s largest wholesale domain name register with over 1 million domain transactions a month. In May 2012, tucows introduced a U.S.-focused mobile virtual network operator business (Ting), which takes advantage of tucows' DNS scale on billing and transaction-based provisioning to give it a real competitive advantage. Ting purchases network capacity from Sprint and offers mobile data and voice services to consumers at very attractive prices. Ting’s

ARPU for the entire year is $125 or ~$10 per month. Ting is growing subscribers by word of mouth at a rate of 6% week on week.

Customers:

With 13,000+ resellers and over 10 million domains, no customer has been 10% of sales for over three years. An increasing

number of web hosts and ISPs are outsourcing DNS registration due to costs. Ting customers are retail mob ile and smartphone customers seeking plan flexibility and more attractive pricing.

Business Plan

Moving Forward:

Return on capital has been a focus for tucows, running seven modified Dutch tender offers and NCIBs since 2007, repurchasing

a total of 37.3 million shares or ~49% of shares outstanding. While the DNS service business should continue to grow ~10% , the MVO business Ting has shown accelerating growth on a low base (~5,000 subs) and the company expects continued growth to be able to leverage off and create significant value with tucows ’ infrastructure in p lace.

Source: Yankee Group, Visiongain, Company reports and CIB C World Markets Inc.


41

Exhibit 35. Vision Critical Communications – Online Survey Software

Vision Critical Communications Inc.

Private Estimated Sales in 2012: $78 million Employees: 600

CEO Scott Miller Approx Growth Rate: 8% Located: Vancouver, BC

Founded: 2000

Investors: Wellington Financial; OMERS Ven tures

Sector: Source: Marketingprofs Market Research Industry

Over the last five years, general marketing and R&D budget cuts have taken a toll on the Market Research (MR) industry, leading to a decline of 0.8% annually up until 2012. However ,

the smaller budgets have seen a shift from traditional telephone and in-person interviews to the emergence of online MR at a lower cost.

The online survey software industry is expected to witness fairly rapid growth over the nex t five years and grow at a CAGR of 10% , reaching $3.1 billion by 2016 as per IBIS. The shift to Internet-based platforms of MR is also reducing lead times in product development.

Vision Critical (VC) has built insight communities and community panels that can be accessed through its on line platforms. The company has grown revenues at an impressive 34% per year from 2007, reaching sales of $78 million in 2012. Business verticals and product lines are

regularly expanding. Recently, VC hired four executives for its Media and Enter tainment team and expects revenue from the division to nearly double in North America within the nex t year. VC recently acquired DiscoverText, a cloud-based tex t analytics technology firm. I ts technology

allows VC to automate scanning of info posted online in survey responses and discover trends, sentiments and emerging issues on a near real-time basis. In April, the Branham300 recognized VC as a top five SaaS company in Canada.


Est. TAM : $17.5 billion

Sub-Sector: Source: Reuters Online Survey Software



Product/Service and Competitive

Advantage:

VC offer s software tools for understanding behavior and attitude towards a customer’s product or service. This includes several online platforms ( that include VC Insight Communities, VC Surveys, VC Discussions) , which help firms build online surveys,

discussion threads, and forums to access its panels. The most successful platform, VC Insight Communities , allows VC’s clients to create multiple customer communities, build and deploy online surveys and create discussion forums.

Customers:

Customers include Yahoo, NASCAR, John Deere, Molson Coors, Virgin Mobile USA and other MNCs. VC's products are

tailored for a broad range of industries, including telecom, financial services, retail and healthcare. Currently, more than 650 brands use VC’s Insight Communities platform.


VC plans to expand its product lines and improve its support infrastructure that operates its online platforms. I t also plans to expand geographically to reach more countries, specifically Germany and China. I ts member community today is several

million strong and spans 30 countries. Source: Reuters, Marketingprofs IBIS, Company reports and CIBC World Markets Inc


42

Exhibit 36. ViXS Systems – Video Processing

ViXS Systems Inc.

Private Sales: ~ $40 million Employees: 150

CEO Sally Daub Approx Growth Rate LY: n/a Located: Toronto, ON



Investors: Celtic House Venture Partners, New Enterprise Associates

Sector: Source: iSuppli

Global Video Processing Sub-Sector: 1st World Video Processing


Est. TAM 2014: $4.5 billion Est. TAM 2014: $2.2 billion

The market for video processors with a system on a chip (SoC) design is continuously evolving, with an increasing number of distr ibutions and networking medians coming to the market. Low power management offering decoding, encoding, transcoding and transcription for an evolving variety

of compression streams carrying high resolution formats in a price-competitive environment requires a focused R&D effor t in a semiconductor market that is increasingly consolidating. Broadcom revenue totals more than all of its core competitors combined, including ST Micro (consumer only), Entropic, Sigma Designs, Mstar (STB), Ikanos, MaxLinear and ViXS. ViXS, as a focused SoC company, targets a niche at the high end of this rapidly growing market.

More bandwidth in the home will be needed to suppor t 4K by 2K HD TVs (Ultra HD) that will co-exist, integrate and connect w ith LTE, 5G Wi-Fi and services such as Netflix. To deliver this service, Multimedia over Coaxial Alliance (MoCA) is a trade group promoting a standard for home

enter tainment networking using coaxial cables to connect consumer electronics and home networking devices for audio and video. MoCA is used by cable, satellite and IPTV. The current specification can support multiple streams of HD video up to 175 Mbps net throughputs. Benefits are use of coaxial, no w ireless spectrum use, and links to wireless access points. ViXS and others target supplying the critical silicon for the products in the home

for high-end gateways. The semiconductor content for video processing used in high-end home entertainment gateways is a robust market at ~$2 billion. Competitor s providing silicon are Broadcom, ST, Entropic and ViXS. Integrating MoCA by service providers and consumer OEMs into products covers DVRs, Over

The Top (OTT) content, gaming consoles and set- top boxes as gateways and microgateways are the fastest-growing area of home networking devices and Ultra HDTVs. Sustained material growth in North America over the coming years is expected as cable companies roll out whole -home DVRs and gateway services. Multi-screen video coming from existing Co-ax infrastructure w ill also be a key driver.

Product/Service:

ViXS designs and develops SoC semiconductors, software and hardware designs. The company's XCode media processor series enables the latest generation se t- top boxes, PVRs, PCs, network-attached storage devices, residentia l gateways and DVRs to view compressed video content securely. ViXS’ Xtensiv software suite suppor ts numerous XCode features and keeps

up-to-date support of DLNA specifications, Android versions, Flash as well as other features. The XConnex chip launched in 2011 can be paired with other SoC solutions that do not have integrated MoCA. This a llows for 175 Mbps throughputs through multip le HD video streams for TV, IPTV and satellite. ViXS technology and silicon leads in per formance and reduces the bill of materia l savings for end customers.

Customers:

Customers include some of the world’s largest home enter tainment companies with a set- top box emphasis, and PC manufacturers, including C isco, Dell, Hitachi, LG, Panasonic and Sony. Service providers are also lead customers, playing critical roles in technology development and include Comcast and D irecTV.


ViXS has a three-year goal for revenue of $200 million. Currently , revenue is ~$40 million, generally showing quar ter-over-quarter growth. ASPs are $10 to $100 and gross margins of 50% plus. A 5% global market share and sales of $200 million are general company targets. With the severe 2011 flooding in Thailand, ViXS saw material d isruptions in business due to supply shortages. Post the recovery in the fall of 2012, ViXS launched its MoCA 2.0 inspired XConnex 1000 transceiver and XConnex 1030

MAC/PHY integrated SoC, and won business at LG.

Source: iSuppli,, Company reports and CIB C World Marke ts Inc


43

Exhibit 37. Wattpad – Social Media

Wattpad

Private Sales: <$10 mil lion Employees: 45

CEO Allen Lau Approx Growth Rate LY: n/a Located: Toronto, ON


Company NY n/a Founded: 2006

Investors: W Media, Golden Venture, Omers Ventures and Union Square

Sector: Source: eMarketer

Global Online Ad Spending Social media tops the list of industries with the most potential for growth over the nex t five years. As can be seen from Facebook and LinkedIn valuations, mature social media sites are still being valued at 5x+ forward Price/Sales. While thousands of social media sites

exist, scaling to reach the point at which revenues pay for in-house infrastructure or CDNs, salaries and space normally requires venture capitalists to fund development until critical mass is reached.

Perhaps the most impor tant statistics for social media start-ups are the number of monthly active unique users and the number of net new subscribers/users per month. Assigning a Cost Per 1,000 Impressions (CPM) rate that advertisers would be w illing to reasonably pay, investors can then gain a sense as to when the company could hit profitability and be

self-sustaining.


Est. TAM 2015: $163 billion Sub-Sector:

Source: Bowker Social Media Ad Spending

Est. TAM: $4.6 billion

Est. TAM: $9.2 billion

Product/Service And Competitive

Advantage:

Wattpad is the world’s largest community connecting writers and readers and allowing comments and interaction between the two across all genres of fiction. The site is free for all users and allows writers to instantly categor ize, tag, publish and

copyright/ license through creative commons. Online books are divided into 23 categories and offered in 26 languages.

Customers:

Wattpad has 15 million unique monthly users. The most impressive statistic is that users spend over 3 billion minutes on Wattpad every month. More than 650 writers have published pieces that have been read more than 1 million times. I ts largest markets include the U.S., the U.K., Canada, Australia, the Philippines and Vietnam. Other interesting stats include

that 80% of users access the site through their mobile devices, 60,000 stories are uploaded or expanded (Wattpad allows serial publishing) a day versus 5,000 books a year published by a traditional publishing house , and every minute 10,000 readers on the site are connected to a new story added. Nine out of 10 users on the site are readers.


Forward:

As of February 2013, Wattpad has seen traffic growth of 70% over the last three months. The immediate goal is to continue

to expand its users in order to obtain a critical mass. Similar to Keek, funding should not be an issue as the company has already raised $20 million over the past two years on a smaller userbase. The company expects growth to come from all major markets in which it has suppor ted languages.

Establishing Wattpad’s business model will take place over the longer term. Possible routes to recognizing large-scale revenue include: • Using an adwords model for e-books. This can help increase viewership for the customer and would not be a huge hit to

the reputational brand, as Google has demonstrated. • Selling user data and trends. • The traditional banner ad model is not in the immediate plans and Wattpad maintains a minimal amount of banner ads. At current statistics of 15 million unique page views at an average CPM of ~$0.75 and continued growth of 25% month over

month, it is thought that annualized sales could be $3 million by the star t of 2014. The 25% month-over-month growth would yield $40 million in sales.

Source: eMarketer, B owker, Company reports and CIBC World Markets Inc.


44

Exhibit 38. Webtech Wireless – Global Fleet Management

Webtech Wireless Inc.

TSX – WEW Sales: $29 million Employees: 148

CEO Scott Edmonds Approx Growth Rate LY -13% Located: Vancouver, BC



Pro Forma Net Cash ~$25 mil lion

Market Capitalization: ~ $30 million

Sector: Source: ABI research Machine To Machine

The satellite market for reducing loss of assets, improving efficiency and lowering overall transpor tation costs is becoming an increasing focus for mature and maturing transportation companies / organizations looking to improve their bottom line. With machine- to-machine

(M2M) technology becoming increasingly widespread and cost effective, it is thought that this will be the next major technology wave to aid companies in achieving / improving profitability.

At CES 2013, Audi, showcasing a connected car able to park itself via a smar tphone app,

received a large amount of attention. Ford, GM and auto- supplier Delphi all offered innovative wireless solutions for the car. While flashy, M2M with consumer cars has not even hit the global auto market in a material way. Currently, the M2M market is primarily seeing uptake with vehicle fleets, and this market is continuing to grow not only in penetration but in

services offered. The overall M2M automotive market is almost entirely upside versus the current state. Fleet management M2M solutions are generally known as telematics and differ on price, software, services, connectivity and specialization. The market is h ighly

fragmented, w ith the largest fleet management solution company (Qualcomm) holding only 5% of the global market.

Further market consolidation is likely. Webtech is undertaking a strategic review that could

result in an outright sale of the company. Two activist shareholders recently jo ined its Board of Directors – John Gildner and Rob Kittle. Mr. Kittle was on the Board of Jevco when it was acquired by Intact F inancial for $530 million in 2012 and on Pet Valu’s board as it was acquired by Roark Capital for $144 million.

Est. TAM 2011: 81.8 million connections

Est. TAM 2015: 217.3 million connections

Sub-Sector: Global Fleet Management /

Trailer Tracking Systems

Est. TAM 2012: 13.3 million subscriptions Est. TAM 2016: 30.4 million subscriptions

Product/Service:

Webtech connects back-office data and fleet operational data with GPS and wireless technologies. I ts hardware and software services run on cellu lar and GPS networks and provide not only location-based services and mapping but vehicle- and driver-centric intelligence such as maintenance data, driver status, in-vehicle telemetry and messaging.

The technology at the heart of Webtech’s solutions is a black box device known as the WT series. I ts two primary markets are: InterFleet (Formerly Grey Island): Aimed at various municipal and provincial / state governments to monitor fleets and more complex applications for snowplows, ambulances and waste management. Penetration for this market is thought to be

around 30% . Quadrant: A private sector solution aimed at improving management r isk and allowing real-time operations of vehicle fleets. Webtech’s advantage is its ability to determine hours of service across multiple p latforms and to deliver its entire suite of

solutions across diverse fleets from sedans to long-haul trucks, and to adapt to multiple hardware platforms, both its own WT series and hardware from vehicle OEM s and other telematics suppliers.

Customers:

Customers include Sierra Pacific Industries, Commonwealth of Kentucky, FedEx, Canadian Pacific Railway, City of Chicago,

the Port of Metro Vancouver and 1,000 others. Sales are primarily to the U.S. (43% ) and Canada (42%) as management has reduced low gross margin overseas hardware sales operations. Of sales, 71% are recurring revenue. WEW has 72,000 monthly subscribers who pay about $24/month.

Business Plan

Moving Forward:

In January Webtech sold its Nex tBus business for $20.8 million. In 2013, it w ill focus on executing growth and profits within

its core telematics business. Growth is expected to continue on its 72,000 subscribers that comprise over 70% of its sales, with an increased focus on profitably growing its “Fleet Intelligence Anywhere” strategy post NextBus. The market growth is ~10% . WEW has gross margins of 50% + and opex of ~$15 million. WEW expects to at least grow with the market, which in

turn the company would then expect to generate EBIT leverage. The fleet management industry continues to move towards consolidation that could include WEW given its current strategic review and base of activist shareholders.

Source: ABI research, Company reports and CIBC World Markets Inc.


45

E-commerce In Canada E-commerce as a percentage of total discretionary spending sales in the U.S. hit

a record 10% in Q1/2013 and has grown by double digits for 10 consecutive

quarters. Canada has tended to lag the U.S. by about 100 basis points (bps) but

generally follows the same patterns. Basically, e-commerce sales remain early

stage but continue to show sustained strong momentum. In North America,

while Amazon (AMZN–NASDAQ) has taken an early lead as an online retailer,

e-Bay (EBAY–OTC) is the largest auction house and Groupon (GRPN–NASDAQ) is

regarded as the king of daily deals, the focus on Canada has been particularly

underwhelming.

Thank You Canada Customs

Canada has transformed itself into a prime location from which to run a North

American e-commerce business. U.S. customs does not levy any duty, taxes or

brokerage fees on parcels under US$200. Canada Customs, however, collects

HST (or GST/PST/QST, as applicable) and duty on any package over $20.

Therefore, retailers such as Amazon, Macy’s and Victoria’s Secret pass on these

fees to buyers or charge higher prices. In other situations, discount U.S.

retailers such as Zappos, J.C. Penney and L.L. Bean have avoided shipments to

Canada altogether. The result is an under-served Canadian market with small

and mid-market players allowed to scale more easily.

Little Brother Ignored Again Lack Of Selection: A quick browse of the Amazon.ca website shows a

materially smaller product selection and the non-existence of a number of large

categories such as clothing, automotive and groceries. Well.ca noted that one of

its greatest competitive advantages is keeping its logistics, merchandising and

customer service in-house. Inventory turns were about 75x and the company’s

attention to detail on logistics has allowed it to carve out a market in smaller

products, including food, medicine and personal care products, where larger

players would find it difficult to compete profitably.

Lack Of Sufficient Canadian Warehousing: Warehousing in the U.S. has, in

many cases, pushed the prices after shipping, handling and import fees higher

than normal brick-and-mortar pricing. Agreements with various drop shippers

have relinquished, to some extent, control over the timeline and ability to track

products, leading to the risk of problems and a potentially negative review of the

e-commerce brand.

Lack Of Attention: Canadian e-commerce retailers such as Well.ca and Beyond

the Rack offer toll-free numbers; Amazon.com and e-Bay do not have contact

phone numbers. At least partially as a result, sales from regular customers

represent upwards of 70% of total sales and likely help to further penetrate the

Canadian retail market.

Profitability Takes Time

While consistent profitability for Canada’s largest home-grown e-commerce

companies remains elusive, it should not be forgotten that Amazon took eight

years to achieve positive operating income and nine years for net income in the

black. Groupon achieved positive operating income in its fifth year and has yet

to see positive net income. A company closer in size to its Canadian peers,

Overstock.com (OSTK–NASDAQ), took 12 years to be in the green on both

fronts. America’s e-commerce companies have generally focused on getting their

home market in order prior to concentrating on Canada.


46

Exhibit 39. E-commerce Companies Focus On Top-line Growth

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

1 2 3 4 5 6 7 8 9 10 11 12 13

Years In Operation

An

nu

al S

ales

(U

SD

Mill

ion

s)

Amazon Groupon Overstock United Online


Exhibit 40. E-commerce Profitability Has Normally Come Much Later

-$800

-$600

-$400

-$200

$0

$200

$400

$600

$800

1 2 3 4 5 6 7 8 9 10 11 12 13

Years In Operation

An

nu

al O

per

atin

g I

nco

me

(US

D M

illi

on

s)

Amazon Groupon Overstock United Online



47

Exhibit 41. Beyond The Rack – E-commerce Market

Beyond the Rack Inc.

Private Sales: $100MM–$150MM Employees: 410

CEO Yona Shtern Approx Growth Rate LY: 50% Located: Montreal, Canada



Investors: Panorama Capital; Export Development Canada; Tandem Expansion Fund; Rho Canada; Inovia Capital; Highland Capital Partners and BDC Venture Capital . Total equity raised ~$40 million.

Sector: Source:

eMarketer E-commerce North America The e-commerce market continues to expand at a double-digit pace, with Canadian sales expected to grow at a faster rate (19% ) over the next three years than U.S. (12% ) , according to eMarketer. Consumers are becoming increasingly comfor table w ith online

purchasing and the growth rate is expected to remain steady over the next five years. While the largest online retailers, such as Amazon and Wal-Mar t, offer, in many cases, lower prices, online offerings such as health and beauty products are incomplete, hindered by low

selling prices versus relatively higher shipping costs. The market continues to evolve and there remains a lot of room for new entrants.

Est. TAM: $320 billion

Est. TAM in 4 Years: $500 billion

Sub-Sector: Source:

Government of

Canada E-commerce Canada


Est. TAM in 4 Years: $32 billion

Product/Service and Competitive Advantage:

Beyond the Rack (BTR) offers 15+ flash sales at a time of up to 70% off retail prices for a 48- to 96-hour period, comprising primarily luxury items. Agreements with suppliers are made w ith approximately 85% of the products selling on a consignment basis. Among the products offered are men’s, women’s and baby clothing, shoes, jewelry, fragrances, watches and home

decor. The company’s competitive advantage is its scale, with 8.5 million subscribers growing monthly at 200,000, and its ability to manage complex logistics. Beyond The Rack continues to move towards its goal of becoming the largest and most profitable e-commerce company in Canada. I t is currently th ird behind Amazon and e-Bay.

Customers:

Customers are generally split between Canada and the U.S. Approximately 85% of customers are women, w ith the target demographic 25 to 55 years. The average purchase size is $95 and 75% of buyers are repeat purchasers. Buyers are purchasing 2.5 items on average. Of sales, 25% come from mobile. Mobile w ill be a significant growth dr iver.

Business Plan

Moving Forward:

Growth thus far has stemmed from reputation, adwords and word of mouth. BTR’s objectives of becoming the No. 1

e-commerce company in profitability in Canada and Nor th America is suppor ted by its two distribution warehouses to serve the East and West in Montreal and Las Vegas. Acquisitions are possible in a market of consolidation and BTR, as a larger player, could generally be considered a likely consolidator.

Source: eMarketer, Gov ernment of Canada, Company reports and CIBC World Markets Inc


48

Exhibit 42. TeamBuy.ca – E-commerce Market

Buyers Unite Inc./TeamBuy.ca

Private Sales: $50MM–$100MM Employees: 135

CEO Ghassan Halazon Approx Growth Rate LY: 100%+ Located: Toronto, ON

Est. Forecasted Growth

By Company NY 200%+ Founded: 2010

Investors: Insight Venture Par tners (NY), Georgian Par tners (Toronto) and Ontario Venture

Capital (Toronto), ru-NET (Russia)

Sector: Source: eMarketer E-commerce North America

The e-commerce market continues to expand at a double-digit pace, with Canadian sales expected to grow at a faster rate (19% ) over the next three years than U.S. (12% ) , according to eMarketer. Consumers are becoming increasingly comfor table w ith online

purchasing and the growth rate is expected to remain steady over the next five years. While the largest online retailers, such as Amazon and Wal-Mart, offer everyday low prices, online deals and promotions offering services and products from local businesses

require more nimble offerings, opening the market to local competitors.



Sub-Sector: Source:

Government of Canada E-commerce Canada



Product/Service:

The recent combination of teambuy.ca and dealfind.com in January 2013 has expanded the firm’s subscriber base to 3.5 million, making it the largest Canadian daily deal company. TeamBuy has recently changed its structure and re-imagined its original local deal-a-day model to emerge as a broader destination site for hundreds of limited- time

deals on services, electronics, health & beauty products, fashion, home, jewelry, and travel. The combined entity offers promotions across Canada and in select U.S. markets. The company receives a percentage of each consumer purchase. TeamBuy also owns Menupalace.com, a popular restaurant and hospitality guide for finding the best

restaurants and ordering online across North America.

Customers:

Demographics of buyers are generally young (ages 23 to 45) and female (~75% ). Of customers, 50% are repeat with 75% of those customers making purchases once every few months. 25% –30% of visits in 2013 are expected to

come from mobile, which could turn into a very powerful tool. The average purchase tends to be between $40 and $50.


The company expects to increase the number of deals and verticals, and move deeper into existing verticals in the near future. Growth is primarily focused on Canada. I ts scale continues to grow, which should support expanded

logistics to improve the customer experience. Improving on the mobile experience and deal personalization are other goals for the company. TeamBuy believes it could reach $200 million in annual sales over the nex t few years given market trends and the entity’s current position.



49

Exhibit 43. Well.ca – E-commerce Market

Well.ca Inc.

Private Sales estimate: ~$100 million Employees: 150

CEO and Founder: Ali Asaria Approx Growth Rate LY: 110% Located: Guelph, ON



Investors: iNovia Capital, Extreme Ventures Partners, Jordan Banks (MD @Facebook Canada), Matt Mullenweg (Co-founder of Wordpress) and Jeff Fluhr (Co-founder of StarHub)

Sector: Source: eMarketer E-commerce North America The e-commerce market continues to expand at a double-digit pace, with Canadian

sales expected to grow at a faster rate (19% ) over the next three years than U.S. (12%), according to eMarketer. Consumers are becoming increasingly comfor table with online purchasing and the growth rate is expected to remain steady over the next five years. While the largest online retailer s, such as Amazon and Wal-Mart, offer, in

many cases, lower prices, online offerings such as health and beauty products are incomplete, hindered by low selling prices versus relatively higher shipping costs. The market continues to evolve and there remains a lot of room for new entrants.



Sub-Sector: Source: Government of Canada

E-commerce Canada



Product/Service:

Well.ca is focused solely on online health, beauty and baby products for the Canadian market. I ts advantage over its

larger U.S. peers has been to deliver a first-class customer experience. The local touch, focusing on un-served niche areas, highlights Canadian products while building a loyal base on the premise of free shipping for baskets over $25 all to be delivered the nex t day. The company has also scaled up to the point where direct purchases from supplier s can

be made, allowing for comparable prices for most items.

Customers:

Customers are dispersed geographically , generally the same as the population with a skew towards Ontario (approximately 60% of customers). Approximately 75% of customers are women. The average basket size is ~$75.


Forward:

Growth thus far has come from reputation, word of mouth and promotional virtual stores in downtown Toronto. Well.ca

has excelled in the customer service space with approximately 70% of customers being repeat. Growth will come from an expansion of its product line and increased penetration in the Canadian market at a fast rate. Well.ca’s five operating pillars are logistics, technology, retailing, merchandising and customer service (all in-house) and the focus

has been critical to successful execution thus far. Well.ca has an extensive mobile presence w ith Apple and Android apps along with a social media presence on Facebook and Twitter.



50

IMPORTANT DISCLOSURES:

Analyst Certification: Each CIBC World Markets research analyst named on the front page of this research report, or

at the beginning of any subsection hereof, hereby certifies that (i) the recommendations and opinions expressed herein

accurately reflect such research analyst's personal views about the company and securities that are the subject of this

report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii)

no part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the specific

recommendations or views expressed by such research analyst in this report.

Potential Conflicts of Interest: Equity research analysts employed by CIBC World Markets are compensated from

revenues generated by various CIBC World Markets businesses, including the CIBC World Markets Investment Banking

Department. Research analysts do not receive compensation based upon revenues from specific investment banking

transactions. CIBC World Markets generally prohibits any research analyst and any member of his or her household from

executing trades in the securities of a company that such research analyst covers. Additionally, CIBC World Markets

generally prohibits any research analyst from serving as an officer, director or advisory board member of a company that

such analyst covers.

In addition to 1% ownership positions in covered companies that are required to be specifically disclosed in this report,

CIBC World Markets may have a long position of less than 1% or a short position or deal as principal in the securities

discussed herein, related securities or in options, futures or other derivative instruments based thereon.

Recipients of this report are advised that any or all of the foregoing arrangements, as well as more specific disclosures

set forth below, may at times give rise to potential conflicts of interest.


51

Important Disclosure Footnotes for Companies Mentioned in this Report that Are Covered by CIBC World Markets Inc.:

Stock Prices as of 06/06/2013:

AGF Management Limited (2g, 7, 13) (AGF.B-TSX, C$11.31, Sector Performer)

Altus Group Limited (2g) (AIF-TSX, C$8.29, Sector Performer)

Bank of Montreal (2g, 3a, 3c, 7) (BMO-TSX, C$59.89, Sector Underperformer)

BCE Inc. (2a, 2c, 2e, 2g, 7, 9, CD7) (BCE-TSX, C$45.16, Restricted)

Bell Aliant Inc. (2a, 2c, 2e, 2g, 7) (BA-TSX, C$28.12, Sector Performer)

Bombardier Inc. (2a, 2d, 2e, 2g, 7, 12) (BBD.B-TSX, C$4.91, Sector Outperformer)

Canadian Pacific Railway Ltd. (2g, 7, 9) (CP-TSX, C$126.80, Sector Performer)

Celestica Inc. (2g, 6a, 12) (CLS-NYSE, US$9.50, Sector Outperformer)

CGI Group Inc. (2a, 2e, 2g, 9, 12) (GIB.A-TSX, C$31.01, Sector Outperformer)

Constellation Software Inc. (2g) (CSU-TSX, C$147.14, Sector Performer)

Descartes Systems Group Inc. (2g) (DSGX-OTC, US$10.78, Sector Performer)

Extendicare Inc. (2a, 2c, 2e, 2g) (EXE-TSX, C$6.65, Sector Performer)

Intact Financial Corp. (2a, 2c, 2e, 2g, 7) (IFC-TSX, C$62.00, Sector Outperformer)

MacDonald, Dettwiler and Associates Ltd. (2a, 2c, 2e, 2g) (MDA-TSX, C$67.82, Sector Outperformer)

Onex Corporation (2g, 12) (OCX-TSX, C$46.95, Sector Outperformer)

Open Text Corporation (2g, 7, 9) (OTEX-NASDAQ, US$71.36, Sector Outperformer)

Research In Motion Limited (2g, 7) (BBRY-NASDAQ, US$13.76, Sector Outperformer - Speculative)

Royal Bank of Canada (2a, 2c, 2g, 3a, 3c, 7) (RY-TSX, C$59.76, Sector Outperformer)

Smart Technologies Inc. (2g) (SMT-NASDAQ, US$1.31, Sector Outperformer)

TELUS Corporation (2a, 2c, 2e, 2g, 7, 9, 13) (T-TSX, C$34.80, Restricted)

Thomson Reuters Corporation (2g) (TRI-NYSE, US$33.30, Sector Performer)

Wi-LAN Inc. (2g) (WIN-TSX, C$4.14, Sector Outperformer)

Companies Mentioned in this Report that Are Not Covered by CIBC World Markets Inc.:


Aastra Technologies Limited (AAH-TSX, C$20.42, Not Rated)

Absolute Software (ABT-TSX, C$7.08, Not Rated)

Acacia Research (ACTG-OTC, US$24.74, Not Rated)

Advanced Micro Devices (AMD-NYSE, US$3.86, Not Rated)

Agilent Technologies (A-NYSE, US$44.57, Not Rated)

Alcatel-Lucent (ALU-NYSE, US$1.76, Not Rated)

Amazon.com (AMZN-NASDAQ, US$265.88, Not Rated)

Amdocs Ltd. (DOX-NYSE, US$35.41, Not Rated)

Apple Inc. (AAPL-NASDAQ, US$438.08, Not Rated)

Autodesk Software (ADSK-OTC, US$35.73, Not Rated)

Avigilon Corp. (AVO-TSX, C$17.47, Not Rated)

Azure Dynamics Corp. (AZDDQ-PN, US$0.01, Not Rated)

Barclays PLC (BARC-L, p3.06, Not Rated)

Belden Inc. (BDC-NYSE, US$51.37, Not Rated)

Benchmark Electronics (BHE-NYSE, US$19.63, Not Rated)

Broadcom Corp. (BRCM-NASDAQ, US$34.66, Not Rated)

CIENA Corporation (CIEN-NASDAQ, US$18.71, Not Rated)

Cinram International Income Fund (CRW.UN-PN, US$0.01, Not Rated)

Cisco Systems (CSCO-NASDAQ, US$24.41, Not Rated)


52

Companies Mentioned in this Report that Are Not Covered by CIBC World Markets Inc.: (Continued)


Comcast (CMCSA-NASDAQ, US$39.79, Not Rated)

Deere & Company (DE-NYSE, US$85.70, Not Rated)

Dell Computer Corp. (DELL-NASDAQ, US$13.45, Not Rated)

Delphi Automotive (DLPH-NYSE, US$48.80, Not Rated)

Deutsche Telekom (DTEGN-DE, €8.68, Not Rated)

DirecTV Group Inc. (The) (DTV-NASDAQ, US$61.10, Not Rated)

eBay Inc. (EBAY-OTC, US$50.92, Not Rated)

Electronic Arts Inc. (EA-NASDAQ, US$23.00, Not Rated)

Entropic Communications Inc. (ENTR-NASDAQ, US$4.31, Not Rated)

Enwave Corporation (ENW-V, C$1.50, Not Rated)

Facebook Inc. (FB-NASDAQ, US$22.81, Not Rated)

Fedex Corp (FDX-NYSE, US$96.24, Not Rated)

Fleetmatics Group plc (FLTX-NYSE, US$30.24, Not Rated)

Ford Motor Company (F-NYSE, US$15.22, Not Rated)

France Telecom (FTE-NYSE, US$9.91, Not Rated)

General Motors Company (GM-NYSE, US$34.05, Not Rated)

Google Inc. (GOOG-NASDAQ, US$853.77, Not Rated)

Groupon Inc. (GRPN-NASDAQ, US$6.65, Not Rated)

Halogen Software (HGN-TSX, C$13.25, Not Rated)

Hangzhou Hikvision Digital Technology Co Ltd (002415-T, ¥37.55, Not Rated)

HarbourVest Global Private Equity (HVPE-L, p0.10, Not Rated)

Harris Corporation (HRS-NYSE, US$49.65, Not Rated)

Hertz Global Holdings (HTZ-NYSE, US$24.17, Not Rated)

Hitachi Ltd. (6501-T, ¥648.00, Not Rated)

Honeywell International Inc. (HON-NYSE, US$76.93, Not Rated)

Hormel Foods Corp. (HRL-NYSE, US$38.72, Not Rated)

Huawei Technology Co. Ltd. (002502-SZ, [CNY]9.16, Not Rated)

Hynix Semiconductor Inc. (000660-KS, [KRW]31150.00, Not Rated)

Ikanos Communications (IKAN-OTC, US$1.28, Not Rated)

Informatica Corporation (INFA-OTC, US$35.86, Not Rated)

Inmarsat Holdings (ISAT-L, p6.18, Not Rated)

InterDigital Communications Corp. (IDCC-NASDAQ, US$45.51, Not Rated)

International Business Machines (IBM-NYSE, US$202.05, Not Rated)

Iridium Communications Inc. (IRDM-NASDAQ, US$7.28, Not Rated)

Iron Mountain Incorporated (IRM-NYSE, US$34.11, Not Rated)

Jabil Circuit, Inc. (JBL-NYSE, US$19.26, Not Rated)

JC Penney (JCP-NYSE, US$17.99, Not Rated)

Juniper Networks (JNPR-NYSE, US$18.37, Not Rated)

Kellogg Co (K-NYSE, US$61.79, Not Rated)

Kindred Healthcare (KND-NYSE, US$13.43, Not Rated)

Lender Processing Services (LPS-NYSE, US$33.04, Not Rated)

LG Corp. (003550-KS, [KRW]66900.00, Not Rated)

Linkedin Corp. (LNKD-NASDAQ, US$167.23, Not Rated)

LM Ericsson AB (ERIC-NASDAQ, US$11.80, Not Rated)

London Stock Exchange (LSE-L, p13.92, Not Rated)

Manhattan Associates (MANH-OTC, US$75.93, Not Rated)

MaxLinear Inc. (MXL-NYSE, US$6.41, Not Rated)


53



McDonald's Corporation (MCD-NYSE, US$95.86, Not Rated)

Merck & Co. (MRK-NYSE, US$48.22, Not Rated)

Micron Technology (MU-NASDAQ, US$12.31, Not Rated)

Microsemi Corp. (MSCC-OTC, US$21.49, Not Rated)

Microsoft Corporation (MSFT-NASDAQ, US$34.57, Not Rated)

Mobotix AG (MBQGN-F, €15.56, Not Rated)

Molson Coors Brewing Company (TAP-NYSE, US$49.28, Not Rated)

MStar Semiconductor, Inc. (3697-TW, [TWD]252.50, Not Rated)

Nanotech Security Corp. (NTS-V, C$0.80, Not Rated)

Nestle SA (NSRGY-OTC, US$66.75, Not Rated)

Netflix Inc (NFLX-NASDAQ, US$214.44, Not Rated)

NetScout Systems (NTCT-OTC, US$23.76, Not Rated)

Nice Systems, Ltd. (NICE-OTC, US$37.26, Not Rated)

Nokia Corporation (NOK-NYSE, US$3.49, Not Rated)

Nortel Networks Corporation (NRTLQ-PN, US$0.01, Not Rated)

Ocean Spray Cranberries Inc. (OCESO-PN, US$11.00, Not Rated)

Oracle Corporation (ORCL-NASDAQ, US$33.18, Not Rated)

ORBCOMM, Inc. (ORBC-NASDAQ, US$4.12, Not Rated)

Overstock.com (OSTK-NASDAQ, US$26.82, Not Rated)

Panasonic Corp. (6752-T, ¥748.00, Not Rated)

PepsiCo Inc. (PEP-NYSE, US$81.12, Not Rated)

Pinetree Capital Ltd. (PNP-TSX, C$0.47, Not Rated)

Qualcomm (QCOM-NASDAQ, US$62.74, Not Rated)

Redknee Solutions Inc. (RKN-TSX, C$2.87, Not Rated)

Samsung Corp. (000830-KS, [KRW]60300.00, Not Rated)

SAP AG (SAP-NYSE, US$75.32, Not Rated)

Seagate Technology, Inc. (STX-NASDAQ, US$43.35, Not Rated)

Semtech Corp. (SMTC-OTC, US$35.60, Not Rated)

Shenzhen Konka Group (000016-SZ, [CNY]3.33, Not Rated)

Siemens (SI-NYSE, US$105.24, Not Rated)

Sigma Designs, Inc. (SIGM-NASDAQ, US$4.83, Not Rated)

Software AG (SOWG-F, €26.00, Not Rated)

Sony Corp. (6758-T, ¥1869.00, Not Rated)

Spectra7 Microsystems Inc. (SEV-V, C$0.65, Not Rated)

Sprint Nextel (S-NYSE, US$7.27, Not Rated)

STMicroelectronics N.V. (STM-NYSE, US$9.61, Not Rated)

Symantec Corporation (SYMC-OTC, US$21.64, Not Rated)

Teledyne Technologies (TDY-NYSE, US$74.40, Not Rated)

Telefonica (TEF-NYSE, US$13.59, Not Rated)

Tessera Technologies, Inc. (TSRA-NASDAQ, US$20.23, Not Rated)

Texas Instruments (TXN-NASDAQ, US$35.36, Not Rated)

TIBCO Software Inc. (TIBX-OTC, US$20.66, Not Rated)

Tucows Inc. (TC-TSX, C$1.82, Not Rated)

Ubisoft Entertainment (UBIP-PA, €10.25, Not Rated)

United Online, Inc. (UNTD-OTC, US$6.74, Not Rated)

Verint Systems (VRNT-NASDAQ, US$34.91, Not Rated)

Vodacom Group Ltd (VODJ-SA, R11184.00, Not Rated)


54



Vodafone Group plc (VOD-L, p1.90, Not Rated)

Volvo AB (VOLVB-ST, [SEK]97.35, Not Rated)

Wal-Mart (WMT-NYSE, US$75.26, Not Rated)

WebTech Wireless (WEW-TSX, C$0.37, Not Rated)

Yahoo! Inc. (YHOO-OTC, US$25.90, Not Rated)

Zynga Inc. (ZNGA-NASDAQ, US$2.80, Not Rated)

Important disclosure footnotes that correspond to the footnotes in this table may be found in the "Key to

Important Disclosure Footnotes" section of this report.

Key to Important Disclosure Footnotes:

1 CIBC World Markets Corp. makes a market in the securities of this company.

2a This company is a client for which a CIBC World Markets company has performed investment banking services

in the past 12 months.

2b CIBC World Markets Corp. has managed or co-managed a public offering of securities for this company in the

past 12 months.

2c CIBC World Markets Inc. has managed or co-managed a public offering of securities for this company in the

past 12 months.

2d CIBC World Markets Corp. has received compensation for investment banking services from this company in

the past 12 months.

2e CIBC World Markets Inc. has received compensation for investment banking services from this company in the

past 12 months.

2f CIBC World Markets Corp. expects to receive or intends to seek compensation for investment banking services

from this company in the next 3 months.

2g CIBC World Markets Inc. expects to receive or intends to seek compensation for investment banking services

from this company in the next 3 months.

3a This company is a client for which a CIBC World Markets company has performed non-investment banking,

securities-related services in the past 12 months.

3b CIBC World Markets Corp. has received compensation for non-investment banking, securities-related services

from this company in the past 12 months.

3c CIBC World Markets Inc. has received compensation for non-investment banking, securities-related services

from this company in the past 12 months.

4a This company is a client for which a CIBC World Markets company has performed non-investment banking,

non-securities-related services in the past 12 months.

4b CIBC World Markets Corp. has received compensation for non-investment banking, non-securities-related

services from this company in the past 12 months.

4c CIBC World Markets Inc. has received compensation for non-investment banking, non-securities-related

services from this company in the past 12 months.

5a The CIBC World Markets Corp. analyst(s) who covers this company also has a long position in its common

equity securities.

5b A member of the household of a CIBC World Markets Corp. research analyst who covers this company has a

long position in the common equity securities of this company.

6a The CIBC World Markets Inc. fundamental analyst(s) who covers this company also has a long position in its

common equity securities.

6b A member of the household of a CIBC World Markets Inc. fundamental research analyst who covers this

company has a long position in the common equity securities of this company.

7 CIBC World Markets Corp., CIBC World Markets Inc., and their affiliates, in the aggregate, beneficially own 1%

or more of a class of equity securities issued by this company.


55

Key to Important Disclosure Footnotes: (Continued)

8 An executive of CIBC World Markets Inc. or any analyst involved in the preparation of this research report has

provided services to this company for remuneration in the past 12 months.

9 A senior executive member or director of Canadian Imperial Bank of Commerce ("CIBC"), the parent company

to CIBC World Markets Inc. and CIBC World Markets Corp., or a member of his/her household is an officer,

director or advisory board member of this company or one of its subsidiaries.

10 Canadian Imperial Bank of Commerce ("CIBC"), the parent company to CIBC World Markets Inc. and CIBC

World Markets Corp., has a significant credit relationship with this company.

11 The equity securities of this company are restricted voting shares.

12 The equity securities of this company are subordinate voting shares.

13 The equity securities of this company are non-voting shares.

14 The equity securities of this company are limited voting shares.

CD7 Jim Prentice, Senior Executive Vice-President and Vice Chairman, CIBC, is on the Board of Directors of BCE

Inc.


56

CIBC World Markets Inc. Price Chart

For price and performance information charts required under NYSE and NASD rules, please visit CIBC on the web at

http://apps.cibcwm.com/sec2711 or write to CIBC World Markets Inc., Brookfield Place, 161 Bay Street, 4th Floor, Toronto, Ontario M5J 2S8, Attn: Research Disclosure Chart Request.

CIBC World Markets Inc. Stock Rating System

Abbreviation Rating Description

Stock Ratings

SO Sector Outperformer Stock is expected to outperform the sector during the next 12-18 months.

SP Sector Performer Stock is expected to perform in line with the sector during the next 12-18 months.

SU Sector Underperformer Stock is expected to underperform the sector during the next 12-18 months.

NR Not Rated CIBC World Markets does not maintain an investment recommendation on the stock.

R Restricted CIBC World Markets is restricted*** from rating the stock.

Sector Weightings**

O Overweight Sector is expected to outperform the broader market averages.

M Market Weight Sector is expected to equal the performance of the broader market averages.

U Underweight Sector is expected to underperform the broader market averages.

NA None Sector rating is not applicable.

**Broader market averages refer to the S&P 500 in the U.S. and the S&P/TSX Composite in Canada.

"Speculative" indicates that an investment in this security involves a high amount of risk due to volatility and/or liquidity issues.

***Restricted due to a potential conflict of interest.

Ratings Distribution*: CIBC World Markets Inc. Coverage Universe

(as of 06 Jun 2013) Count Percent Inv. Banking Relationships Count Percent

Sector Outperformer (Buy) 157 41.0% Sector Outperformer (Buy) 152 96.8%

Sector Performer (Hold/Neutral) 189 49.3% Sector Performer (Hold/Neutral) 183 96.8%

Sector Underperformer (Sell) 29 7.6% Sector Underperformer (Sell) 26 89.7%

Restricted 7 1.8% Restricted 7 100.0%

Ratings Distribution: Technology Hardware Coverage Universe

(as of 06 Jun 2013) Count Percent Inv. Banking Relationships Count Percent

Sector Outperformer (Buy) 6 60.0% Sector Outperformer (Buy) 6 100.0%

Sector Performer (Hold/Neutral) 2 20.0% Sector Performer (Hold/Neutral) 2 100.0%

Sector Underperformer (Sell) 2 20.0% Sector Underperformer (Sell) 2 100.0%

Restricted 0 0.0% Restricted 0 0.0%

Technology Hardware Sector includes the following tickers: BBRY, DWI, EXFO, MITL, RDL, SMT, SVC, SWIR, VCM, WIN.

*Although the investment recommendations within the three-tiered, relative stock rating system utilized by CIBC World Markets Inc.

do not correlate to buy, hold and sell recommendations, for the purposes of complying with NYSE and NASD rules, CIBC World

Markets Inc. has assigned buy ratings to securities rated Sector Outperformer, hold ratings to securities rated Sector Performer, and

sell ratings to securities rated Sector Underperformer without taking into consideration the analyst's sector weighting.

Important disclosures required by IIROC Rule 3400, including potential conflicts of interest information, our system for

rating investment opportunities and our dissemination policy can be obtained by visiting CIBC World Markets on the web

at http://researchcentral.cibcwm.com under 'Quick Links' or by writing to CIBC World Markets Inc., Brookfield Place, 161 Bay Street, 4th Floor, Toronto, Ontario M5J 2S8, Attention: Research Disclosures Request.

http://apps.cibcwm.com/sec2711

http://researchcentral.cibcwm.com/


57

Legal Disclaimer

This report is issued and approved for distribution by (a) in Canada, CIBC World Markets Inc., a member of the

Investment Industry Regulatory Organization of Canada (“IIROC”), the Toronto Stock Exchange, the TSX Venture

Exchange and a Member of the Canadian Investor Protection Fund, (b) in the United Kingdom, CIBC World Markets plc,

which is regulated by the Financial Services Authority (“FSA”), (c) in Australia to wholesale clients only, CIBC Australia

Ltd, a company regulated by the ASIC with AFSL license number 240603 and ACN 000 067 256, and (d) in Japan, CIBC

World Markets (Japan) Inc., a registered Type 1 Financial product provider with the registration number Director General

of Kanto Finance Bureau #218 (collectively, “CIBC World Markets”) and (e) in the United States either by (i) CIBC World

Markets Inc. for distribution only to U.S. Major Institutional Investors (“MII”) (as such term is defined in SEC Rule 15a -6)

or (ii) CIBC World Markets Corp., a member of the Financial Industry Regulatory Authority (“FINRA”). U.S. MIIs receiving

this report from CIBC World Markets Inc. (the Canadian broker-dealer) are required to effect transactions (other than

negotiating their terms) in securities discussed in the report through CIBC World Markets Corp. (the U.S. broker-dealer).

This report is provided, for informational purposes only, to institutional investor and retail clients of CIBC World

Markets in Canada, and does not constitute an offer or solicitation to buy or sell any securities discussed here in in any

jurisdiction where such offer or solicitation would be prohibited. This document and any of the products and information

contained herein are not intended for the use of private investors in the United Kingdom. Such investors will not be able

to enter into agreements or purchase products mentioned herein from CIBC World Markets plc. The comments and views

expressed in this document are meant for the general interests of wholesale clients of CIBC Australia Ltd.

This report has been prepared by the CIBC group and is issued in Hong Kong by Canadian Imperial Bank of

Commerce, Hong Kong Branch, a registered institution under the Securities and Futures Ordinance, Cap 571 (the “SFO”).

This report is intended for “professional investors” only (with in the meaning of the SFO) and has been prepared for

general circulation and does not take into account the objectives, financial situation or needs of any recipient. Any

recipient in Hong Kong who has any questions or requires further information on any matter arising from or relating to

this report should contact Canadian Imperial Bank of Commerce, Hong Kong Branch at Suite 3602, Cheung Kong Centre,

2 Queen’s Road Central, Hong Kong (telephone number: +852 2841 6111). Orders for Hong Kong listed securities will be

executed by Canadian Imperial Bank of Commerce, Hong Kong Branch. Canadian Imperial Bank of Commerce, Hong

Kong Branch has entered into an arrangement with its broker-dealer affiliates worldwide to execute orders for securities

listed outside of Hong Kong for Hong Kong clients.

This report is intended for distribution in Singapore solely to accredited investors, expert investors and institutional

investors (each, “eligible recipients”). Eligible recipients should contact Danny Tan at Canad ian Imperial Bank of

Commerce, Singapore Branch at 16 Collyer Quay #04-02 Singapore 049318 (telephone number + 65-6423 3806) in

respect of any matter arising from or in connection with this report.

The securities mentioned in this report may not be suitable for all types of investors. This report does not take into

account the investment objectives, financial situation or specific needs of any particular client of CIBC World Markets.

Recipients should consider this report as only a single factor in making an investment decision and should not rely solely

on investment recommendations contained herein, if any, as a substitution for the exercise of independent judgment of

the merits and risks of investments. The analyst writing the report is not a person or company with actual, implied or

apparent authority to act on behalf of any issuer mentioned in the report. Before making an investment decision with

respect to any security recommended in this report, the recipient should consider whether such recommendation is

appropriate given the recipient's particular investment needs, objectives and financial circumstances. CIBC World

Markets suggests that, prior to acting on any of the recommendations herein, Canadian retail clients of CIBC World

Markets contact one of our client advisers in your jurisdiction to discuss your particular circumstances. Non-client

recipients of this report who are not institutional investor clients of CIBC World Markets should consult with an

independent financial advisor prior to making any investment decision based on this report or for any necessary

explanation of its contents. CIBC World Markets will not treat non-client recipients as its clients solely by virtue of their

receiving this report.

Past performance is not a guarantee of future results, and no representation or warranty, express or implied, is

made regarding future performance of any security mentioned in this report. The price of the securities mentioned in this

report and the income they produce may fluctuate and/or be adversely affected by exchange rates, and investors may

realize losses on investments in such securities, including the loss of investment principal. CIBC World Markets accepts

no liability for any loss arising from the use of information conta ined in this report, except to the extent that liability may

arise under specific statutes or regulations applicable to CIBC World Markets.

Information, opinions and statistical data contained in this report were obtained or derived from sources believed to

be reliable, but CIBC World Markets does not represent that any such information, opinion or statistical data is accurate

or complete (with the exception of information contained in the Important Disclosures section of this report provided by

CIBC World Markets or individual research analysts), and they should not be relied upon as such. All estimates, opinions

and recommendations expressed herein constitute judgments as of the date of this report and are


58

Legal Disclaimer (Continued)

subject to change without notice.

Nothing in this report constitutes legal, accounting or tax advice. Since the levels and bases of taxation can change,

any reference in this report to the impact of taxation should not be construed as offering tax advice on the tax

consequences of investments. As with any investment having potential tax implications, clients should consult with their

own independent tax adviser.

This report may provide addresses of, or contain hyperlinks to, Internet web sites. CIBC World Markets has not

reviewed the linked Internet web site of any third party and takes no responsibility for the contents thereof. Each such

address or hyperlink is provided solely for the recipient's convenience and information, and the content of linked third

party web sites is not in any way incorporated into this document. Recipients who choose to access such third -party web

sites or follow such hyperlinks do so at their own risk.

Although each company issuing this report is a wholly owned subsidiary of Canadian Imperial Bank of Commerce

(“CIBC”), each is solely responsible for its contractual obligations and commitments, and any securities products offered

or recommended to or purchased or sold in any client accounts (i) will not be insured by the Federal Deposit Insurance

Corporation (“FDIC”), the Canada Deposit Insurance Corporation or other similar deposit insurance, (ii) will not be

deposits or other obligations of CIBC, (iii) will not be endorsed or guaranteed by CIBC, and (iv) will be subject to

investment risks, including possible loss of the principal invested. The CIBC trademark is used under license.

© 2013 CIBC World Markets Inc. All rights reserved. Unauthorized use, distribution, duplication or disclosure

without the prior written permission of CIBC World Markets is prohibited by law and may result in prosecution.

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