LaBarge Weinstein Quarterly: Summer 2015
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Now that Canada Day has come and gone, we’re definitely in the full swing of summer.
This spring, the LW team was busy assisting companies raise nearly $100M in financing transactions! We also closed a number of M&A deals and a $50M Initial Public Offering for Mogo Finance Technology.
The quarter was also an eventful time for our clients. Here are a few highlights on what they have been up to recently:
- Well.ca tied for first place in Forrester’s Canadian Customer Experience Index, beating out nearly 200 other companies when it comes to customer satisfaction.
- Earlier this spring, X-L-Air Energy Services’ parent company, Lorneville Mechanical Contractors, was named one of Canada’s Best Managed Companies.
- Koneka, Spoonity, and Sqantro were selected as recipients of the TiE50 Awards Program, which recognizes the world’s top 50 technology startups.
- Coffee Mobile, an emerging Toronto startup, recently launched its new scheduling and shift trading app designed to make the lives of retail and service workers around the world a little easier. Learn more here.
Deal Flow Report
Here is a sample of recent publicly-announced transactions that we’ve worked on over the past three months:
- Beam Propulsion Lab’s $450K Seed Financing
- Elliptic Technologies Sale to Synopsys
- Espial Group Inc.’s $35 Million Bought Deal Financing
- Granify’s $9 Million Series A Financing
- Mogo Finance Technology’s $50 Million Initial Public Offering
- Nexonia’s $4.2 Million Series A Financing
- Showbie’s $2.3 Million Seed Financing
- Tweed Marijuana’s Acquisition of Bedrocan Cannabis Corporation
- VarageSales’ $34 Million Series B Financing
Firm and Staff News
We are pleased to announce that our 2014/15 articling student, Emma Wilkin, has been hired as an associate. Having joined the firm as a summer student in 2013 and then returning to complete her articling in 2014, we are excited that she will be continuing her career with us.
Firm partner and Chair of the Trans Canada Trail, Paul LaBarge, along with countless volunteers and a long list of “Champions” including Olympic athletes, politicians and celebrities are well on their way to connect the Trail. From coast to coast, the Trans Canada Trail is currently 80% complete. The goal is to connect the Trail before Canada’s 150th birthday in 2017.
In June, Debbie Weinstein was appointed to the Board of Directors for Centre of Excellence in Next Generation Networks (CENGN) – a consortium of industry, academic, and research leaders dedicated to accelerating the commercialization of next generation communications solutions. Debbie also recently joined the Board of The Royal’s Institute for Mental Health Research.
Our involvement within the Canadian technology sector has been keeping us busy. Over the past few months, we sponsored FounderFuel’s Demo Day in Montreal; met with some of Canada’s most accomplished tech companies at the Atlantic Venture Forum in Halifax; and hosted the Metabridge after party in Kelowna.
In the upcoming months, we’re running legal workshops for the Launch36 and Planet Hatch cohorts in Moncton and Fredericton and attending the Grow Conference in Whistler. Additionally, Diana Cooper has been asked to present at the DroneApps Conference in Lausanne, Switzerland this September.
Ontario Investing Up to $25 Million to Help Startups Grow
The Ontario government is partnering with private investors and business leaders to create Scale Up Ventures, a new venture capital fund designed to support Ontario’s most promising start-ups through a unique combination of investment and mentorship.
The government is contributing up to $25 million to establish the venture capital fund. A further $25 million in matching funds will be provided by private investors. Scale Up Ventures will invest the resulting $50 million in Ontario start-ups that have shown initial market success and that demonstrate strong growth potential, but require new investment and mentorship to expand their operations.
Applications Are Open for the 2015 CIX Top 20
The CIX Top 20 is a unique program designed to showcase Canada’s hottest and most innovative technology companies. A panel of leaders in the innovation space including venture capitalists, angel investors, funders, and corporate service providers will select 20 technology companies from across Canada to be featured in a live showcase at the Canadian Innovations Exchange, taking place November 17, 2015 at MaRS Discovery District in Toronto.
The CIX Top 20 is an elite index of the most forward-looking companies in the Canadian innovation ecosystem, and connects the key players driving technology-based business both in Canada and beyond. For more information, visit the CIX website.
Noteworthy Highlights from the 2015 Federal Budget
The 2015 Federal Budget was announced on April 21 and there were a few measures in the Budget that are worth noting, specifically:
- The annual contribution limit for Tax Free Savings Accounts will be increased to $10,000 per year for 2015 and subsequent tax years. This amount will no longer be indexed for inflation.
- The federal small business income tax rate for the first $500,000 of active business income will be decreased from the current 11% to 9%. This change will happen gradually with four equal annual decreases of 0.5% from January 1, 2016 to January 1, 2019.
- There will be corresponding upward adjustments to the gross-up and dividend tax credit that apply to non-eligible dividends paid to shareholders of small businesses (to account for the reduction in the small business income tax rate reduction).
- Capital gains realized on the sale of private company shares will be exempt from tax when the proceeds from the sale are donated to a registered charity within thirty (30) days of the sale. There are several measures to prevent abuse of this exemption (for example, preventing the vendor from reacquiring the property that was sold). This measure is only intended to come into effect after 2016.
As with all budgets, we will have to wait to see until the legislation is introduced to fully understand the extent of any of the above changes. It is also important to note that since this is an election year, any newly elected government may alter or eliminate measures that extend beyond the current year (like the reduction in the small business income tax rate on the first $500,000 of active business income). It will be interesting to see whether provincial governments change their tax rates in response to these proposals.
If you have any questions regarding tax and estate planning, please contact us and we would be happy to assist.
Information Worth Sharing
Call for Proposals for the Ontario-Israel Collaboration Program (OICP)
This Ontario-Israel Call invites applicants – at least one industrial partner from Ontario and at least one industrial partner from Israel – to propose shared research projects for the development of innovative products or processes. The maximum duration of a project is 24 months. Special consideration will be given to projects in the following four areas:
- Clean technologies
- Life sciences and medical devices
- Cyber security and other information and communication technologies
Successful Ontario applicants are eligible to receive up to $300,000 CAD or up to 50% of the R&D costs of technology-based products and processes (whichever is less) from the Government of Ontario through CIIRDF to fund the Ontario portion of each project.
Deadline for Complete Applications: Monday, August 31, 2015, 12 midnight Eastern Time. Find application information here.