The Good, the Bad, and the Ugly (March 2025)
Welcome to your monthly recap of the Canadian microcap market!
The macroeconomic uncertainty that began to take hold in February persisted into March. It was a highly volatile month, especially in US large-cap stocks. The S&P 500 index declined 5.6% in March. On our side of the border, the market was more resilient, with the TSX Composite declining only 1.5% and the TSX SmallCap index posting a positive return of 2.6%! Commodities such as oil and gold have performed well in March, which likely helped Canadian stocks.
On the M&A front, we saw two new transaction announcements. Simply Solventless Concentrates (TSX-V: HASH) will acquire CanadaBis Capital (TSX-V: CANB) in an all-stock deal valued at $16 million, representing a 42% premium based on the last share prices of both companies before the announcement. Synex Renewable Energy (TSX: SXI) will be acquired by Sitka Power, a strategic, for a 58% premium to its last closing price.
Let's move on to some of the main highlights from last month!
The concept is simple for those who recently signed up for this newsletter. I feature the news that caught my attention during the previous month after skimming through all the press releases on the Canadian market. Every press release, every single day!
The Good
Progressive Planet Solutions (TSX-V: PLAN), a profitable developer of patented innovations that promote a healthier planet, announced major financing breakthroughs. The company secured two significant non-dilutive grants, totalling $4.6 million and $1.14 million, to advance the development of its PozGlass pilot plant. That’s impressive for a company with a market cap of around $15 million. PozGlass is an innovative cement product that the management team has identified as a significant value creator in the future, and these grants could unlock that value creation.
Beyond Oil (CSE: BOIL), a company I previously highlighted due to its numerous positive announcements, kept firing on all cylinders. In March, the company secured global supplier approval from Restaurant Brands International, opening access to over 30,000 Burger King, Popeyes, Tim Hortons, and Firehouse Subs locations worldwide. A few days later, the company announced a $10.5 million financing with a large institutional investor at a 10% premium to the last share price. The stock reached a high of +127% during the month and finished up 86%.
Kits Eyecare (TSX: KITS) announced an upward revision to the company’s Q1 2025 guidance. While revenues are still expected to grow 32% to 38% year-over-year, adjusted EBITDA is now projected to be between 6% and 8% of revenue, compared to the previously expected range of 4-6%. The company has been demonstrating increasing operating leverage as it expands its revenues, which has been sufficient for the market to take notice. The stock advanced 38% in the days following the news, reaching a new all-time high of $12.55 per share.
The two most notable earnings reports for me came from McCoy Global (TSX: MCB) and NamSys (TSX-V: CTZ). McCoy’s revenue increased 28% in the fourth quarter, while net earnings increased 59%. The company also announced an increase to its quarterly dividend. The stock surged on the news and rose by 46% in the following weeks. NamSys also reported strong results, with a 23% revenue growth rate during the quarter, representing a notable acceleration from the 5-15% growth rate of the last several years. With the benefits of operating leverage, net earnings were up 65% this quarter. The stock jumped 27% over two days, reaching a new all-time high of $1.40.
The Bad
Remember Banxa Holdings (TSX-V: BNXA) from last month’s ugly section? The company had two offers to take it private, and both fell through. When the company cancelled its go-private plans, it appointed Antanas Guoga (Tony G) as chairman of the board. Guoga had been accumulating shares of the company and announced a few days prior that he owned 11.7% of Banxa’s shares. Well, fast forward a month later, and the stock is now 45% below the proposed takeover price. Guoga, the new chairman, disposed of a million shares. It was recorded as a donation, so it may be for tax purposes only. I don’t know what’s happening there, but something doesn’t smell right.
Enterprise Group (TSX: E) reported underwhelming fourth-quarter financial results, with revenue and net income down 19% and 70% year-over-year, respectively. Enterprise’s stock had been a top performer in 2024, rising 155% and a further 42% in early 2025. The management team had been aggressively telling the story lately and setting high expectations. Beyond the financial headline, it seems that many investors were disappointed with management’s attitude and lack of concern for shareholders. It seems unwise to attract new investors to buy the stock just before a disappointing quarter. The shares declined 29% in the two days following the news and now sit almost 50% below the February high of $2.69.
Sweet Poison Spirits (CSE: SPS) announced a pivot from selling premium spirits to mining cryptocurrencies, specifically Siacoin. The company will change its name to Hyper Bit Technologies. My favourite part of the announcement is the new trading symbol, which, in case their intentions weren’t clear, is HYPE. Who’s in?
The Ugly
A strategic acquirer finally put Spectra7 Microsystems (TSX-V: SEV) shareholders out of their misery. Following the sale of its operating assets to Parade Technologies, Spectra7 expects to distribute proceeds of approximately $0.028 per share to shareholders, a 53% DISCOUNT to the prevailing $0.06 share price. This transaction marks the end of a brutal 99.9% decline in share price over the last ten years...
Evome Medical Technologies (TSX-V: EVMT), a turnaround in progress, came out with the dreaded Friday night press release. The company published a gloomy business update, highlighting rising input costs, its lender's withdrawal of the asset-based loan facility, the resignation of the CEO, COO, and two directors, and that it had no funds to cover its annual audit. The stock plummeted the next day, losing 82% of its value immediately.
Due to a regulatory request by the CSE, Onco-Innovations (CSE: ONCO) published an update on the use of proceeds from its prospectus financing conducted in November 2024. According to the prospectus, out of $2.57 million in available funds, the company planned to allocate $200,000 to investor relations, while the remainder would be allocated towards technology, R&D, commercialization, and other related expenses. A few months later, the actual use of proceeds was quite surprising. $1.66 million was spent on investor relations, and a further $600,000 was committed to IR activities in 2025. Essentially, the company spent most of the money on IR to ‘‘enhance market visibility and foster investor confidence’’… That sounds like a great way to build a sustainable business.
That's all I have for you this month! I hope you enjoyed it.
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Did I miss any crucial developments last month? Let me know in the comments which news or earnings reports caught your attention!
Disclaimer
This publication is for informational purposes only. Nothing produced under the Stocks & Stones brand should be construed as investment advice or recommendations. Mathieu Martin, the author, is employed as a Portfolio Manager with Rivemont Investments. This publication only represents Mathieu Martin’s own opinions and not those of Rivemont. Rivemont may own positions and transact on any securities mentioned in this publication at any time without prior notice. At the time of this writing, the Rivemont MicroCap Fund holds shares of CanadaBis Capital (TSX-V: CANB) and Kits Eyecare (TSX: KITS). Always do your own research and consult a professional before making investment decisions.
If you’d like to invest in small public companies, check out this post.
Wait what, Tony G playing on our Canadian turf!
On your bike!