S INITIATION REPORT - The Howard Group€¦ · CEMATRIX CORPORATION Member of the Investment Industry Regulatory Organization of Canada (IIROC) Participating Organization – Toronto

INITIATION REPORT

May 6, 2020

Member of the Investment Industry Regulatory Organization of Canada (IIROC) Participating Organization – Toronto Stock Exchange and TSX Venture Exchange

Member – Canadian Investor Protection Fund (CIPF)

Andrew Hood 416.603.7381 x230

[email protected]

CEMATRIX CORPORATION (CVX - TSXV, $0.49) Rating: BUY Target Price: $1.20

A SMALL CAP WITH THE FOUNDATION FOR AN UNSTABLE ECONOMY

CEMATRIX Corporation is the leader in North America as a supplier and

installer of cellular concrete – a proprietary lightweight construction material used for tunnels, roads, runways, overpasses and freeways, as a

backfill, replacement or floating base over weak and unstable soils and/or as an insulator, and for applications where seismic issues are a strong

consideration. Through both organic growth and M&A, CVX has grown revenues from $7.7M in 2017 to an anticipated $40-45M in 2020,

supported by a backlog of $78.5M and bid pipeline over $275M. As a

testament to the growth of the cellular concrete industry and CEMATRIX in particular, the size of the largest contracts has increased substantially

from $6M in the recent past, to a record order announced in February for over $15.7M.

INVESTMENT THESIS

CEMATRIX is the best-in-class North American leader in the underdeveloped cellular concrete industry. Both organically and

inorganically, CVX has expanded its proprietary technology and formulations, density offerings, geographic footprint and management

expertise in order to satisfy the widest array of customer needs. Its competitive advantages place the Company in an enviable position as the

market for cellular concrete expands on the back of its superior attributes

vs. alternatives, including lower costs, faster construction times, superior

strength, more environmentally friendly, insulation properties, and more.

The Company has a massive backlog of $78.5M that is 1.8x its current enterprise value. From this backlog CVX expects to generate

$40-45M in revenues in 2020. There is ample opportunity to expand the

backlog from its >$275M bid universe, of which we anticipate 30%

capture over the next couple years.

CEMATRIX has a unique relationship with Lafarge Canada, providing them with preferential pricing on cement, which

comprises 65% of material costs. The relationship extends further to

5-year regional development and joint marketing agreements to develop the North American cellular concrete market. Longer term, the companies

aim to collaborate internationally.

In wildly uncertain times, CVX is positioned in the recession-resistant infrastructure markets which are likely to be the

beneficiary of government stimulus in the near-term. Both the U.S. and Canada have historically used infrastructure investments to keep

the economy running, and both countries have aging infrastructure which

require higher levels of investment.

We are initiating coverage on CEMATRIX Corporation with a BUY

rating and $1.20/share target price based on 9.0x 2021 EBITDA.

CEMATRIX Corporation TSXV:CVX

(Currency is C$ unless noted otherwise)

Last Price ($) $0.49

Target Price ($) $1.20

Return to Target 145%

52-Week Trading Range ($) $0.16 - $0.59

Average Daily Volume (90-Day) 213.0K

MARKET INFO

Shares Outstanding (M) 60.4

Market Capitalization ($M) $30

Enterprise Value ($M) $44

FYE: DEC 31 F2019A F2020E F2021E

Revenue ($M) $22.6 $40.0 $50.0

EBITDA ($M) $2.1 $6.3 $8.5

Cash ($M) $0.8 $4.1 $6.8

Debt ($M) $15.6 $17.4 $12.8

VALUATION F2019A F2020E F2021E

EV/Revenue 2.0x 1.1x 0.9x

EV/EBITDA 20.8x 7.1x 5.2x

RELATIVE VALUATION

(EV/EBITDA)F2019A F2020E F2021E

Global Concrete Contractors 21.3x 6.5x 5.9x

MAJOR SHAREHOLDERS

DISCLOSURE CODE: None

(Please refer to applicable disclosures on the back page)

Source: M Partners, Thomson Eikon

Management & Insiders (10.4%), Jeffery Kendrick (4.31%), Edward

Weiner (3.87%), Minaz Lalani (1.09%), James Chong (0.33%)

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0

.2M

.4M

.6M

.8M

1.0M

1.2M

1.4M

May-03-2019 Aug-03-2019 Nov-03-2019 Feb-03-2020 May-03-2020

INITIATION REPORT

May 6, 2020

Member of the Investment Industry Regulatory Organization of Canada (IIROC)

Participating Organization – Toronto Stock Exchange and TSX Venture Exchange Member – Canadian Investor Protection Fund (CIPF)

2

COMPANY OVERVIEW

CEMATRIX was founded in 1999 in Calgary, Alberta, as a supplier and installer of proprietary lightweight cellular

concrete. After an initial focus on infrastructure applications, CVX increasingly drove its growth through oil & gas

projects. However, following the shock brought on by the recession in 2008-09, revenues from that segment plummeted as projects were deferred indefinitely. CEMATRIX made the decision to pivot back towards a primary

focus on serving infrastructure projects, which were likely to provide a much more stable base of revenues. This pivot has placed CEMATRIX in a compelling position considering the current economic uncertainty in North

America. In fact, it is likely that their end markets will directly benefit from stimulus spending in a recessionary

scenario.

CEMATRIX Corporation consists of four distinct subsidiaries across the U.S. and Canada (Figure 1). CEMATRIX Canada focuses on infrastructure and oil & gas projects in Western Canada, Ontario and Quebec, though CVX has

completed projects in every province except the Maritimes to date. CEMATRIX USA sells into infrastructure projects in the United States, which began in 2011 with three projects. MixOnSite USA Inc. (“MOS”), which was

acquired in 2018, provides lower density cellular concrete from its base in Chicago. Bellingham, Washington-

based Pacific International Grout Co. (“PIGCO”), which was acquired in late 2019, specializes in heavier density cellular concrete, primarily for tunnel grouting applications. CEMATRIX was already the leader in the nascent

Canadian market for cellular concrete as the only major supplier. Through these two acquisitions CVX has emerged as the North American leader for cellular concrete. There are only two large competitors in the more

mature U.S. market: Geo-Cell and Cell-Crete, and Cell-Crete mainly limits its operations to the southwest U.S.

Further, as a result of these acquisitions, CEMATRIX is able to offer a range of technologies and densities for a variety of end uses.

What is Cellular Concrete?

Cellular concrete is a lightweight, foamed concrete-like material consisting of various densities and formulations of Portland cement, water, foaming agent and compressed air. It has a number of unique properties in that it is:

highly flowable, lightweight, insulating, strong, self-leveling, energy absorbing, freeze-thaw resistant and has low permeability. It is also more environmentally friendly than alternatives because it reduces construction time (and

thereby construction traffic and emissions), its insulation properties and because it utilizes by-products such as fly ash and slag that would have likely been sent to landfills otherwise. There is also preliminary research that

cellular concrete may absorb carbon dioxide from the atmosphere, which if proven could generate carbon credits

if designed into projects. Cellular concrete is generally lighter than water, except for heavier density tunnel grouting applications. It is not used as a substitute for traditional concrete, but rather for weak and unstable

soils/gravel, EPS blocks, steel or concrete pile construction, LECA, cement grout, rigid insulation and tank bases. It is primarily used as a foundational material in tunnels, roads, runways, overpasses, bridges, MSE backfill,

industrial facilities and other projects involving weak and unstable soils. Often projects can be completed weeks

CEMATRIX CORPORATION

CEMATRIX (Canada) Inc.

CEMATRIX (USA) Inc.

MixOnSite USA Inc. ("MOS")

Pacific International Grout

Co. ("PIGCO")

Figure 1 - Corporate Structure (Source: Company Filings)

INITIATION REPORT

May 6, 2020



3

ahead of schedule using CEMATRIX cellular concrete, which also lowers costs in addition to the material itself coming at a lower price than alternatives.

Figure 2 - Cellular Concrete (top) vs. Its Substitutes (Source: Investor Presentation)

CEMATRIX has a relatively simple supply chain. The only third party products are foaming agent and cement, the

latter of which is 65% of overall material cost. CVX also has its own proprietary foaming agent which together

with third party foaming agents comprise the majority of the inventory on the balance sheet. CEMATRIX has a unique relationship with Lafarge in North America to provide the lowest price on cement purchases, which is 90%

of CVX’s total cement usage in Canada and 50% in the United States. When CVX is submitting bids to tender offers, it is able to effectively compete with other cellular concrete providers due to this pricing advantage. CVX

does not source from Lafarge in select circumstances, such as when supplying larger construction companies who

have their own supply, cement/ready mix is too far from site, or Lafarge is not located in the region at all (such as the Southwest U.S.).

Figure 3 - Lafarge Canada Delivery On-site (Source: Investor Presentation)

CEMATRIX’s unique relationship with Lafarge Canada, subsidiary of LafargeHolcim (SWX – LHX, N/R) – the third largest construction materials manufacturer in the world, is one of its key competitive advantages and extends

beyond preferential cement pricing. In June 2016, the companies entered into a 5-year Joint Marketing Agreement to develop the cellular concrete market in Canada and increase awareness of its advantages. In

February 2017, they expanded the relationship with 5-year regional development agreements whereby CEMATRIX

INITIATION REPORT

May 6, 2020



4

will provide a processing unit and ancillary equipment to Lafarge on a lease in regions where Lafarge has a presence but CVX does not. The companies will then work to develop these newer markets. The initial agreement

was for Winnipeg, Manitoba. While there has not been a substantial increase in sales from this relationship yet,

the attachment to a reputable larger player such as Lafarge provides CEMATRIX a degree of credibility that is difficult to achieve on its own, and could accelerate acceptance of cellular concrete in general. Longer term,

Lafarge is interested in partnering with CEMATRIX to expand the companies’ exposure into international markets.

The growth of CEMATRIX’s business is contingent upon wider acceptance and implementation of cellular concrete

for a variety of applications. Cellular concrete has been around for approximately 100 years, and was brought to the U.S. market in the 1950s as a lightweight floor-levelling product. However, it was slow to gain popularity as

manufacturers were more focused on applications in flooring and roofing. For years, the Company has actively

promoted its use and educated geotechnical and design engineers who are in charge of the design and materials used for projects in Canada and the U.S. CEMATRIX is the only full-service cellular concrete provider engaged in

R&D of material mixes, foaming agents, additives and processes, as well as ongoing R&D with MSE panel companies and Canadian highway construction through a collaboration with the University of Waterloo, Region of

Waterloo and the National Research Council. In some cases, municipal and provincial governments must approve

cellular concrete as a construction product (sometimes for specific uses). In Canada, CEMATRIX has obtained, or is in the process of obtaining, approvals in all provinces and territories in which it operates. Quebec is the next

market with approvals in process for additional applications. In the United States, cellular concrete is already an approved product for various infrastructure applications in most regions. Management estimates the U.S. market

is ten years ahead of Canada, and thus we believe the acquisitions of PIGCO and MOS have dramatically accelerated the growth opportunity for CVX in the near term.

CEMATRIX provides its products as a sub-contractor to engineering companies, commercial contractors and public-private partnerships who design materials into projects across three multi-billion dollar verticals:

infrastructure, industrial/mining and commercial/seismic. The bulk of the revenues in the future will likely be sourced from the infrastructure market, which is focused on public projects financed by provincial, state and

federal governments. CEMATRIX has completed a variety of infrastructure projects in its 20-year history, including

insulation of road bases; protection of permafrost under buildings, utilities, roads and runways; insulation of shallow utility installations; industrial and commercial floor bases; replacement of weak and/or unstable soils;

mechanical stabilized earth (“MSE”) panels and retaining wall backfill; grouting and tunnel backfill. CEMATRIX has four salespeople in Canada (three regional and one focused on tunnels), while in the U.S. there was one

salesman hired in 2019. This is because for tunnel applications, PIGCO is often the only option, and for MixOnSite there has historically been ample demand for tenders even without approaching new potential customers.

Figure 4 - Selected Customers (Source: Investor Presentation)

INITIATION REPORT

May 6, 2020



5

CEMATRIX has two distinct types of mobile production equipment (Figure 5) to meet variable customer needs: wet mix and dry mix. CVX has 10 dry plants for higher volume projects, where the company is able to set up the

batch plants on site, and produce cellular concrete through a fully automated cement slurry mixing process from

cement and other dry powders. The Company has 8 wet mix systems which are partially automated and supplied with pre-designed cement slurry from a ready mix provider. Dry mix systems reduce unit costs up to 20% and

have higher hourly production capacity vs. wet mix, but are not suitable for smaller or medium-sized projects due to the higher mobilization costs and onsite space required. The replacement cost for a system is much higher at

$1.5M vs. $0.4M for a wet plant; however, dry plants generally have a 30-year life if properly maintained ($50-100K in total maintenance expense historically – same at MOS), while wet systems have a 20-year life. Because

of the mobile nature of the equipment fleet, CEMATRIX is able to serve any project in North America and rapidly

respond to changing demands and schedules.

Figure 5 - Mobile Batch Plants (Source: Investor Presentation)

Acquisitions

While CEMATRIX entered the U.S. infrastructure market in 2011, the growth of the business in the United States has largely come from two acquisitions made over the past couple of years. On May 31, 2018, CVX acquired

MixOnSite (“MOS”). From its base in Buffalo Grove, Illinois, MOS provides low density cellular concrete and installation services for a variety of applications across the United States, but primarily the Northeast and central

U.S. This acquisition provided not only a new base of operations and geographic exposure in the U.S., but also an

experienced management team, new technologies, and a backlog of orders to fulfill. This includes underwater cellular concrete placement, in which CEMATRIX is the only known provider in North America. The owner of MOS,

Ed Weiner, became a significant shareholder of CVX with currently 3.9% of share ownership, and he also provides his services as a Director and consultant for the U.S. operations for a three-year transition period after

closing. Mr. Weiner’s son Jordan also retains the position of President of MOS for at least three years following

closing and will likely remain for the foreseeable future.

Figure 6 - MixOnSite Backfill Between MSE Walls (Source: MOS Website)

Under the terms of the acquisition, CEMATRIX paid a total consideration of US$2.4M in cash, US$0.75M vendor

takeback, an 8% US$2.5M convertible note ($0.2375/share) and 3.3M common shares at $0.19/share (US$0.5M),

INITIATION REPORT

May 6, 2020



6

as well as a ~US$1.2M earn-out based on 70% of MOS EBITDA above US$500K in the first year and 65% of EBITDA above US$500K for the second and third years after closing.

In 2018, MOS provided C$8.3M in revenues, and if CVX had owned the business for the entire year, revenues would have been approximately $10M. In contrast, inclusive of MOS sales, the consolidated CEMATRIX business

generated $17.6M in revenues in 2018, which illustrates the massive growth that MOS provides. In 2019, MOS brought in $10.5M in sales, or 46% of CEMATRIX Corp.’s total sales in its first full year as a part of the business.

Figure 7 - Evolution of CEMATRIX (Source: Investor Presentation)

CEMATRIX’s other transformative acquisition was Pacific International Grout (“PIGCO”) in October 2019. From its base in Bellingham, Washington, PIGCO is a leader in heavier density cellular concrete for applications particularly

focused on tunnel grouting and nuclear abandonments. As a function of PIGCO’s expertise and equipment,

CEMATRIX Corp. is the only cellular concrete tunnel grout supplier in North America with the ability to administer heavy cellular concrete grout in longer problematic tunnels. Similar to the acquisition of MOS, PIGCO provides a

new base of operations into the U.S., new equipment and technologies, expanded product offerings and formulations, and an experienced management team that will remain on board to assist the growth of the

business. Pat Stephens will remain as President of PIGCO for at least four years after closing. Due to its scale, the

capacity of CEMATRIX’s equipment has increased six times over 2019 sales, and the focus of PIGCO’s end markets will reduce the seasonality of CEMATRIX Corp.’s business, which typically realizes the bulk of revenues

when projects are completed in the spring and summer. For both PIGCO and MOS, the existing operations can also be improved with CEMATRIX’s superior equipment technologies, foaming agent and material mix.

Figure 8 - PIGCO Tunnel Grouting Project (Source: PIGCO Website)

INITIATION REPORT

May 6, 2020



7

Under the terms of the acquisition, CEMATRIX paid a total of US$2.8M in cash, US$1.0M in vendor takeback, and 3.3M common shares at $0.28/share (US$0.5M), as well as a ~$US$3.5M four-year earn-out based on 65% of

PIGCO EBITDA above US$0.5M.

In the quarter since the acquisition, PIGCO generated $690K in revenue and a $468K net loss; on a pro-forma

basis in 2019 PIGCO generated $25.2M in revenue and a $820K net loss. We believe this acquisition in particular expanded CEMATRIX’s technology and product offering outside of its traditional scope, and provides the

opportunity to secure larger orders where there may be less competition due to lack of expertise (such as tunnel grouting projects). Further, even inclusive of the earn-out CEMATRIX was able to obtain an attractive portfolio for

a very low cost, including US$5.8M in capital assets and approximately $27M in contracted and awarded projects,

all for an initial cash cost of US$2.8M. On the back of its impressive backlog, we believe CEMATRIX will have the balance sheet to make another transformative acquisition of other cellular concrete providers or complementary

businesses over the next couple years to solidify its leading position in North American cellular concrete.

FINANCIAL HIGHLIGHTS

CEMATRIX generates the bulk of its revenue from onsite production and placement of cellular concrete. These

revenues are recognized based on the number of cubic metres processed and placed, and projects could be completed in half a day or a couple of years for larger projects. Generally sales are one-time in nature (aside from

follow-on work with a project/location) without recurring revenues, but CVX aims to increase sales into larger projects with longer time frames or opportunity for follow-on work. This was demonstrated with a $15.7M order

announced in February 2020 for 15 bridge/overpass projects, accompanied with the potential for additions. This is a stark contrast to even two years ago, when larger contracts were typically $1-6M. While revenues are not

technically recurring in nature, management estimates that over 50% of orders are repeat customers.

CEMATRIX Corp.’s revenue sources have changed drastically in terms of both sector and geography over the past

decade (Figure 9). Since its shift away from primarily Western Canadian oil & gas projects in the aftermath of the recession in 2008-09, infrastructure projects, particularly in the United States, have become the main driver of

revenue growth. As the Canadian market for cellular concrete continues to develop at a slower pace, we

anticipate that about 70% of revenues over the next couple years will come from the U.S. market. We note that PIGCO provided only $690K of the total revenues in 2019, and will likely generate over a third of revenues in the

near term.

Figure 9 - Revenue Split Since the Great Recession (In Millions CAD; Source: Company Filings)

Revenue is converted from the backlog generally within one or two years. The backlog has grown exponentially

over the past year (Figure 10) following some large orders (particularly a $15.7M order in February) and the acquisition of PIGCO in October, which added $35.1M in contracted and verbally awarded sales. Approximately

80% of the current backlog is attributable to U.S. sales. While it is unpredictable and lumpy, we anticipate that

CEMATRIX’s backlog should continue to grow at a fast pace over the next year. CVX’s current bid pipeline totals

0

5

10

15

20

25

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Canadian Infrastructure and O&G U.S. Infrastructure

0

5

10

15

20

25

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Oil & Gas Infrastructure

INITIATION REPORT

May 6, 2020



8

in excess of $275M, and management expects it can capture 30-40% of these orders. Based on the current equipment capacity and one 8-hour shift, CEMATRIX Corp. is able to produce over 2.5M cubic yards annually,

which equates to $175M in revenues.

Figure 10 - Growth in the Backlog (In Millions CAD; Source: Company Filings)

Despite higher cement prices over the past few years (Figure 11), CEMATRIX has been able to improve gross

margins from the lows of 2017. Cement is 65% of CEMATRIX’s material costs, but CVX is able to pass on higher

costs to customers. Further, its relationship with Lafarge ensures best pricing on cement. Margins are lower than

prior to the financial crisis because of the shift away from oil & gas projects, which carried higher risk. In our

view, the stability provided by an infrastructure focus greatly outweighs the margin contraction. We believe gross

margins should remain around these levels or improve with scale, with fluctuations from 27-32% based on

project type, geography, pricing competition and wet vs. dry mix projects. On average, projects for CEMATRIX

(USA) have carried a slightly lower margin than CEMATRIX (Canada) at 27% vs. 30%, respectively, due to the

more price competitive U.S. market.

Profitability at CEMATRIX has been improving steadily since 2017 (Figure 12), which should be supplemented through the additions of the MOS and PIGCO businesses. We anticipate that EBITDA margins should expand to

the mid-double digits as a function of operating leverage on a large fixed asset base and economies of scale. The current year’s profitability should improve drastically on the back of PIGCO alone, which added only $690K in

revenues since acquisition in October and generated a loss of $468K due to increased costs.

25.3 24.226.7

32.8

51.8

78.5

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

FY18A 1Q19A 2Q19A 3Q19A 4Q19A 1Q20E

0

20

40

60

80

100

120

140

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Cement Prices (USD per metric ton)

0%

5%

10%

15%

20%

25%

30%

35%

40%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

CVX Gross Margin

Figure 11 - Trend in Cement Prices and Gross Margins (Source: Statista and Company Filings)

INITIATION REPORT

May 6, 2020



9

Figure 12 - Improving Profitability as the Business Grows (Source: Company Filings)

While we view the tight liquidity position as one of the material risks to CEMATRIX, management has shown

assiduity in navigating working capital constraints in the past, and the cash conversion cycle has improved from

66 days in 2017 to 38 days in 2019. As a function of its relatively simplistic supply chain and attractive payment terms, CEMATRIX is able to run effectively even in times when working capital may be tight, as has been the case

since the addition of expenditures from PIGCO in October. Generally customers pay 30 to 45 days from the date of the invoice – 30 to 45 days before CEMATRIX pays its cement supplier (most often Lafarge), which is 65% of

material costs. About 5-7% of accounts receivable in the U.S. and 10% in Canada consist of holdbacks which are

collectible after 45 days, but can stretch over a year contingent on project completion by the general contractor. At year-end, roughly 1/3 of accounts receivable were past 60 days, but 90% of the outstanding A/R have since

been collected. Following an estimated $20M of scheduled orders in the first half of the year, we believe in Q3 the Company will receive a substantial portion of the corresponding accounts receivable, and be sitting on a

comfortable cash position despite some debt payments over the course of the year (Figure 13). Further, the liquidity position has improved since year-end with a $5.5M convertible debenture raise in April, and management

is looking to secure an operating loan up to $5M.

Figure 13 - Debt Schedule (Source: Company Filings)

-15%

-10%

-5%

0%

5%

10%

15%

20%

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2016 2017 2018 2019 2020E

EBIT

DA

(M

illi

on

s C

AD

)

EBITDA Margin

Historical

FY16 FY17 FY18 FY19 1Q20E 2Q20E 3Q20E 4Q20E FY21

Current:

Bank Operating Loan - 0.1 1.2 0.9 0.9 0.9 0.9 0.9 0.9

U.S. Operating Loan - - 1.0 2.2 1.7 0.6 0.3 - -

Current Portion of Long Term Debt 0.3 0.3 0.7 1.2 1.2 1.2 1.2 1.2 1.2

Current Portion of Lease Obligations 0.1 0.1 0.2 0.4 0.3 0.3 0.2 0.2 0.2

Total currrent portion 0.4 0.5 3.1 4.8 4.1 3.0 2.7 2.4 2.3

Long-Term:

Long term debt 2.0 1.9 3.4 6.1 6.1 6.1 5.5 4.9 3.7

Lease Obligations 0.2 0.2 0.1 1.5 1.6 1.6 1.5 1.5 1.3

Convertible Note - - 3.4 3.2 3.2 3.2 3.2 3.2 -

Convertible Debenture - - - - - 5.5 5.5 5.5 5.5

Long-term Debt 2.1 2.0 6.9 10.8 10.9 16.3 15.6 15.0 10.5

Total Debt 2.5 2.5 10.0 15.6 15.0 19.3 18.3 17.4 12.8

Projected

Long-Term Debt Q3/19 Q1/20 Q2/20 Q3/20 Q4/20 2021 2022 2023 2024

BDC Financing Maturity Amount Interest Balance Payments Balance Payments Balance Payments Balance Payments Balance Payments Balance Payments Balance Payments Balance Payments Balance

Loan 1 20-Oct 0.2 7.80% 0.1 - 0.1 - 0.1 0.1 0.0 0.0 - - - - - - - - -

Loan 2 22-Dec 0.3 9.91% 0.2 - 0.2 - 0.2 0.0 0.2 0.0 0.2 0.1 0.1 0.1 - - - - -

Loan 3 24-Sep 0.4 7.90% 0.4 - 0.4 - 0.4 0.0 0.3 0.0 0.3 0.1 0.2 0.1 0.1 0.1 0.0 0.0 -

Loan 4 21-Sep 0.0 7.05% 0.0 - 0.0 - 0.0 0.0 0.0 0.0 0.0 0.0 - - - - - - -

Loan 5 (USD) 26-Aug 2.0 8.10% 1.9 - 1.9 - 1.9 0.1 1.7 0.1 1.6 0.3 1.3 0.3 0.9 0.3 0.6 0.3 0.3

Loan 6 (USD) 25-Dec 3.8 10.20% 3.6 - 3.6 - 3.6 0.3 3.4 0.3 3.0 0.5 2.6 0.7 1.9 0.7 1.3 0.7 0.6

Secured Debenture 25-Jan 1.0 9.00% 1.0 - 1.0 - 1.0 - 1.0 - 1.0 0.2 0.8 0.2 0.6 0.2 0.4 0.2 0.2

INITIATION REPORT

May 6, 2020



10

INDUSTRY OVERVIEW

The global market for cellular concrete is expected to grow from US$2.3B to US$2.6B by 2023, with a more

developed market in Europe and southeast Asia. Growth in demand for cellular concrete will be driven by both

overall construction expenditures and increasing usage of cellular concrete as its advantages become more

apparent. The key success factors in cellular concrete include reputation, flexibility to adjust to fluctuations in

market demand, diversity in technology and densities to meet wider project requirements, and price

competitiveness to compete for tenders. We believe that CEMATRIX excels across all these success factors,

including its unique relationship with Lafarge to offer best pricing, varied density/technology offerings through its

three business segments and excess capacity in operations to meet an expansion in demand without excessive

capital expenditure requirements. CEMATRIX has produced hundreds of thousands of cubic metres of cellular

concrete since 1999 across both small and large projects with unique design characteristics. CEMATRIX focuses

on the U.S. and Canada, which will be detailed on the proceeding pages.

United States

CEMATRIX’s primary end market is infrastructure projects in the United States through its PIGCO and MixOnSite

subsidiaries. There are over 50 thousand concrete contractors in the United States, accounting for almost $60B of

revenue in 2019 according to IBISWorld. Of course traditional concrete has been around for a long time, and that

market is expected to grow about 1% annually over the next five years. However, CEMATRIX products are not

generally aimed as a substitute for traditional concrete, but rather for unstable soils, EPS blocks, expanded clay,

cement grout, rigid insulations and tank bases. Thus while we believe cellular concrete will often be involved in

projects utilizing traditional concrete, the growth rate should far exceed 1% as the adoption rate accelerates as a

substitute for inferior and higher cost methods. According to INSEAD, the market for cellular concrete in the U.S.

is expected to expand from US$452M in 2018 to US$546M by 2023.

Roughly 25% of concrete contractor revenues are derived from residential construction (Figure 14), which is likely

to take a significant hit in future periods amid skyrocketing unemployment in the United States and wider

economic uncertainty. Fortunately, CEMATRIX is not exposed to residential construction, and has instead focused

on infrastructure projects and some industrial applications. Non-residential construction includes office buildings,

sports arenas, retail, restaurants and industrial applications, and we expect this segment to suffer as well.

However, while most drivers of construction, such as corporate profits, disposable income levels and low

unemployment are expected to worsen for the near future, project activity could also be supported by historically

low lending rates in the U.S. following a series of rate cuts. Further, we believe CEMATRIX’s focus, infrastructure,

should benefit from stimulus in a recessionary scenario, which we will detail below. This is captured in Addition,

Alterations and Reconstruction, as well as Other Services, which includes highways and roads, ports, energy

infrastructure and other new projects.

INITIATION REPORT

May 6, 2020



11

Figure 14 - End Applications in the $60B Concrete Contractors Market (Source: IBISWorld)

The traditional concrete contractor industry is highly fragmented, with over 50 thousand companies. In contrast,

the more nascent cellular concrete industry for infrastructure applications in the U.S. is largely dominated by four

companies: Pacific International Grout (owned by CEMATRIX), MixOnSite (owned by CEMATRIX), Cell-Crete and

Geo-Cell Solutions. Cell-Crete generally confines its operations to the southwestern/western U.S., and CEMATRIX

does not regard the company as a significant threat. It was founded in 1956, and provides a number of service

offerings including cellular concrete, geofoam, insulated concrete roofing systems, underlayment systems and

fireproofing. Geo-Cell sells throughout the U.S., and has an office in Chicago. We believe that CEMATRIX has built

a potentially dominant position in the U.S. cellular concrete market through its acquisition of two of the four

major players. These acquisitions have provided CVX with a wide range of unique technologies, management

expertise, and flow densities to meet the widest array of customer needs. In the future, we think it is a possibility

that CEMATRIX also acquires a competitor to solidify its positioning in the U.S. market.

In the United States, the federal government invests on maintenance of roads and other transit infrastructure,

and every state has a budget for maintenance and repair of highway infrastructure. Congress determines how

much each state receives from the federal government. The Congressional Budget Office (CBO) states that

highway and airport infrastructure as well as public transport receive mandatory budget authority from

authorizing legislation. However, every year appropriation acts control outlays for transportation programs by

limiting the amount of the mandatory budget authority the Department of Transportation can obligate. Thus

these outlays are considered discretionary. The CBO projects discretionary outlays to decline to 5.6% of GDP by

2030 (from 6.4% in 2020 and 2.7% lower than the 50-year average). The decline is a function of the increase in

mandatory outlays (15.2% of GDP, 5.2% higher than the 50-year average) for Social Security, Medicare and

Medicaid as the population ages, and the increase in net interest payments following years of fiscal deficits.

However, we do not believe crucial infrastructure projects will be ignored, and cuts in discretionary outlays will

likely come from other areas such as defense, law enforcement and national parks.

In the U.S. in 2017, $177B was spent on highways (47% of which was operation and maintenance), which

includes roads, bridges and tunnels. There are broadly six types of transportation and water infrastructure paid

for largely by the public sector: highways, mass transit/rail, aviation, water transportation, water resources and

water utilities.

48.6%

25.6%

14.9%

10.9%

New non-residential construction New residential construction

Additions, alterations and reconstruction Other services

INITIATION REPORT

May 6, 2020



12

Much of the infrastructure in the United States has been in place for decades, and requires substantial

maintenance or in many cases should be replaced altogether. Despite this fact, infrastructure spending has

declined over the past few years (Figure 15) and the percentage of spending as a proportion of GDP has declined

from over 3% in the 1950s to 2.3% in 2017. Spending has been increasingly focused on operation and

maintenance activities, simply to keep the infrastructure at an adequate level, but total spending has fallen with a

collapse in new capital projects.

Infrastructure Expenditures in the United States (Source: Congressional Budget Office, using data from the Office

This is likely driven by the financial pressure in many regions over recent years, as unlike many other countries

where infrastructure investment is driven nationally, U.S. state and local governments drove 78% of the funding

in 2017 (Figure 16), which results in allocations to lower-cost operation and maintenance (70%) vs. large capital

projects. We believe that for longer term economic growth and stability, it is imperative that the U.S. invests

more in updating its aging infrastructure, rather than constantly applying bandages. To illustrate the decline in

U.S. infrastructure, in the World Economic Forum’s 2019 Global Competitiveness Report, while the United States

ranked second overall globally to Singapore, its infrastructure ranked 13th. Although this ranks favourably vs. less

developed countries, it is a stark decline since the U.S. was ranked 2nd in 2002. The United States is simply not

spending enough to maintain and build new infrastructure, which in the long run could severely damage

productivity and job growth. As mentioned above, as a proportion of GDP, infrastructure spending in the U.S. had

fallen to 2.3% in 2017. In contrast, European countries spend an average of 5% of GDP on maintaining and

building new infrastructure.

Figure 16 - Federal and State/Local Spending on Capital Projects vs. Operation & Maintenance (Source: Congressional Budget Office, Using

Data from the Office of Management and Budget and the Census Bureau)

State and Local Governments

$102

Federal Government

$72

Capital Spending (Billions USD)Federal

Government, $27

State and Local Governments,

$240

Operation and Maintenance (Billions USD)

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

0

50

100

150

200

250

300

350

400

450

500

1956

1959

1962

1965

1968

1971

1974

1977

1980

1983

1986

1989

1992

1995

1998

2001

2004

2007

2010

2013

2016

Bil

lio

ns

USD

(20

17

)

Billions of 2017 USD Share of GDP

174

266

0

50

100

150

200

250

300

1956

1959

1962

1965

1968

1971

1974

1977

1980

1983

1986

1989

1992

1995

1998

2001

2004

2007

2010

2013

2016

Bil

lio

ns

USD

(20

17

)

Capital Operation and Maintenance

Figure 15 - Infrastructure Expenditures in the United States (Source: Congressional Budget Office, Using Data from the Office of Management and Budget, the Census Bureau and the Bureau of Economic Analysis)

INITIATION REPORT

May 6, 2020



13

Though the majority of funding for projects comes from state and local governments, the federal government

does provide some support beyond its ~20% in funding, including the Transportation Infrastructure Finance and

Innovation Act (TIFIA). TIFIA provides assistance through low-interest direct loans, loan guarantees and standby

lines of credit to finance surface transportation projects of national and regional significance. The federal

government also supports the $3.9T municipal bond market through tax incentives such as exemption on the

interest from federal taxes. Amidst the coronavirus pandemic and resulting rush to liquidity in the municipal bond

market, the Federal Reserve has offered support through widening the money market mutual fund liquidity facility

and buying bonds up to three years’ duration for counties with residents in excess of 500,000 and cities of

250,000 residents.

To overcome the potential budgetary shortfall, public-private partnerships (P3s) may become increasingly

important, which have been a small but growing part of the market in recent years. As economic uncertainty

worldwide is growing, it is likely that private investor interest in developing projects backed by cash-flow

generating assets such as toll roads will increase. We anticipate P3s will become a larger portion of the funding

mix moving forward, by bringing in new expertise for projects, providing new funding sources and speeding up

the development timeline.

Figure 17 - Cumulative Infrastructure Needs in the U.S. Based on Current Trends: 2016-2025 (In Billions 2015 USD, Source: American Society

of Civil Engineers, 2017 Infrastructure Report Card)

The American Society of Civil Engineers (see Figure 17 above), estimates that the U.S. has only been spending

half of what it should for years. In 2017, it estimated that $2T needs to be spent to close the funding gap over

the next 10 years. In a 2016 study, it estimated that failure to close this gap could lead to $3.9T in losses to U.S.

GDP, $7T in lost business sales and 2.5M lost jobs by 2025. It is likely that the gap has only increased in the past

few years, and the Global Infrastructure Hub estimates that the investment gap has currently reached $3.8T.

While there are many challenges to overcome, the United States must invest in infrastructure now to maintain

and grow its economy. With financial pressures mounting as well, we believe it is increasingly important that

projects are completed at a faster pace and a lower cost. For suitable applications, CEMATRIX can play a

meaningful role where it has proven to provide a faster and lower cost solution than the alternatives, while also

being more environmentally friendly.

Infrastructure Systems Total Needs Estimated Funding Funding Gap

Surface Transportation 2,042 941 1,101

Water/Wastewater Infrastructure 150 45 105

Electricity 934 757 177

Airports 157 115 42

Inland Waterways & Marine Ports 37 22 15

Dams 45 6 39

Hazardous & Solid Waste 7 4 3

Levees 80 10 70

Public Parks & Recreation 114 12 102

Rail 154 125 29

Schools 870 490 380

Total 4,590 2,526 2,064

INITIATION REPORT

May 6, 2020



14

Perhaps the most appealing aspect of CEMATRIX’s business model is the potential benefits to be reaped on

focusing on infrastructure as the U.S. economy appears to be headed towards a recession. Considering projects

are primarily funded through the government, infrastructure will likely be a beneficiary of sizeable stimulus over

the near and medium-term. Looking back to the global financial crisis of 2007-08, the American Recovery and

Reinvestment Act of 2009 (ARRA) was signed by President Obama as a follow-up to President Bush’s Troubled

Asset Recovery Program (TARP). This fiscal stimulus package invested billions of dollars in infrastructure,

including $46B for transportation and mass transit projects, $31B to modernize federal buildings and $6B for

water projects.

Considering the unprecedented nature of the current shutdown of the U.S. economy, the stimulus this time

around could be much more substantial. Infrastructure spending has been one of the pillars of President Trump’s

platform since he ran in 2016, but he has had difficulties passing any official bills. He promised $1T in

infrastructure spending when he campaigned in 2016. In 2018, he proposed $200B in federal funding, aimed at

spurring $1.5T in total investments over the proceeding decade. The bill fizzled out from an outcry of little federal

support vs. local/state government and private sector spending. In February 2020, Trump revised his plan to $1T

in federal funding, which would please local governments, but many parties were concerned that the federal

government simply lacked the tax revenues to pay for it. However, as the COVID-19 pandemic intensified, on

March 31, President Trump called for a $2T infrastructure package as Phase 4 of stimulus on the back of the

$2.2T coronavirus relief bill in the prior week. Since that time, no infrastructure spending package has passed,

with funds primarily distributed to small businesses and health care. Infrastructure spending is one of the few

areas where Republicans and Democrats can agree that urgent action is required, even prior to recessionary

fears. In January 2020, House Democrats put forward the Moving Forward Framework to invest $760B over 5

years in highways ($329B), transit ($105B), rail transportation ($55B), airports ($30B), harbor infrastructure

($20B), water infrastructure ($10B), wastewater infrastructure ($50B), and other areas. The economic fallout

from the COVID-19 pandemic could provide the fuel to galvanize bipartisan action on infrastructure spending.

In the medium term once the economy restarts, we believe an infrastructure bill will play an important part in an

economic recovery. A University of Massachusetts at Amherst study indicated that government investment in

roads, bridges and other public works is the most cost-efficient method to create jobs, with $1B providing 19,975

jobs. According to the Brooking Institution, 17.2M workers, or 12% of the American workforce, are employed in

infrastructure jobs. A 2017 report by Georgetown University’s Center on Education and Workforce indicated that

Trump’s previous $1T infrastructure investment proposal could have created 11M direct and indirect jobs. In

terms of overall economic impact, a University of Maryland study from 2014 concluded that infrastructure

investments add as much as $3 to GDP for every dollar spent, with a greater impact during a recession.

Canada

CEMATRIX Corp. also conducts business in Canada through its CEMATRIX subsidiary. The legacy business focused

on Canadian oil and gas projects but has shifted towards primarily infrastructure investments in order to provide

resiliency amid economic uncertainty. The market for cellular concrete in Canada is much less developed and

growing more slowly than the United States, and management estimates it is about ten years behind. According

to INSEAD, the Canadian market for cellular concrete is expected to expand from US$41M in 2018 to US$45M by

2023. Because the market for cellular concrete is so nascent in Canada, CEMATRIX has the advantage of being an

early mover. However, the Company believes that being the only major player in the country (with a couple small

players in Ontario and British Columbia) has actually hampered demand because project developers are hesitant

to rely on one supplier for major projects. This is particularly the case for oil and gas applications, which are now

INITIATION REPORT

May 6, 2020



15

a minority of revenues, because there are no direct replacements for cellular concrete for the products it replaces.

It is less of an issue for infrastructure applications, as there are other, more expensive options that may be

specified as an alternative. Further, CVX’s relationship with Lafarge provides credibility as a sole source supplier.

We believe CEMATRIX made the right move in expanding its business into the U.S. through the acquisitions of

PIGCO and MixOnSite to capture the near-term opportunity. However, long-term CVX should capture a leading

position in Canada as the market develops. Similar to the US., demand for CEMATRIX’s cellular concrete in

Canada will be driven by federal, provincial and municipal infrastructure spending. But the structure of funding

sources and the overall infrastructure plan in Canada is quite different.

Canadians have been more diligent in recent years in investing in infrastructure projects, with expenditures

increasing most years for the past decade and a greater participation rate from the private sector (Figure 18). In

2018, investment in Canadian infrastructure totaled $85.8B, or 25.9% of total non-residential investment

(Statistics Canada). Public-private partnerships play a crucial role in Canada’s infrastructure development, which is

partly a function of the country’s more organized approach. The federal government established PPP Canada to

screen potential projects and invest in successful tenders through the P3 Canada Fund. The prevalence of private

sector participation can play a major factor in completing projects in a timely and cost-effective manner. We also

believe that the private sector is more likely to investigate and invest in the advantages of alternative solutions

such as cellular concrete to improve the financial returns and overall performance of completed projects.

Figure 18 - Canadian Infrastructure Investment (In Billions CAD; Source: Statistics Canada)

Canada has an organized federal framework through the Investing in Canada plan, which was implemented in

two phases in Budget 2016 and Budget 2017 (Figure 19). Through this plan, which is managed by Infrastructure

Canada and has bilateral agreements with provinces and territories, the government is more than doubling

existing funding and investing more than $180B over 12 years across five infrastructure categories: public transit,

green infrastructure, social infrastructure, trade and transport, and rural and northern communities. Investments

are delivered through 14 federal departments and agencies. In 2016 the focus was on providing short-term

funding for the rehabilitation, repair and modernization of existing infrastructure. Budget 2017 was focused on

longer-term projects delivered over the proceeding decade. The Government of Canada will co-invest with

municipalities and provinces to complete projects, thereby providing more support than typically seen in the

United States. An update in September 2019 indicated that over 48,000 projects have been approved since 2016.

14 17 21 21 25 27 28 26 27 27

45

53 49 50 47 4752 51

56 58

0

10

20

30

40

50

60

70

80

90

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Private Public

INITIATION REPORT

May 6, 2020



16

Figure 19 - Investing in Canada Plan (Source: infrastructure.gc.ca)

Despite the infrastructure investments over the past decade, there is still plenty of work to be done. The 2019

Canadian Infrastructure Report Card stated that the majority of infrastructure in the country is over 20 years old,

and a sizeable portion is in poor or very poor condition including roads (16%) and bridges/tunnels (12%). To

complete these projects at a lower cost, faster, stronger and more environmentally friendly for the future,

CEMATRIX cellular concrete has an important place in the value chain. Further, as the Canadian economy appears

to be approaching a recession, infrastructure stimulus could serve as one of the most attractive job-generating

tools for the federal government. In 2018, over 585,000 jobs were associated with production of infrastructure

(Figure 20).

Figure 20 - Direct and Indirect Jobs from Infrastructure Investment in Canada (Source: Statistics Canada)

0

50

100

150

200

250

300

350

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Direct Indirect

INITIATION REPORT

May 6, 2020



17

RECENT DEVELOPMENTS

• In April 2020, closed a $5.5M private placement of 8% convertible debentures ($0.40/share conversion),

which was oversubscribed and increased from the original $3.0M sought. CVX is also working on

expanding its U.S. operating line up to $5.0M to shore up liquidity further.

• In April 2020, announced $2.1M in contracts for CEMATRIX (Canada), MOS and PIGCO, and expanded

the existing backlog by an additional $2.9M to reflect positive movements in the CAD/USD exchange rate,

bringing the total current backlog to $78.5M

• In March and April 2020, updated shareholders on the minimal impact of COVID-19 to its business, with

no significant project delays or cancellations

• On February 20, 2020, announced CEMATRIX (Canada), MOS and PIGCO were awarded one of the

largest cellular concrete projects ever tendered in North America. CEMATRIX will be providing load-

reducing fill for fifteen bridges/overpasses in the Eastern U.S. at an estimated contract value of $15.7M,

with optionality for expansion. CVX beat out 12 other bidding groups for the project. It is scheduled to

commence in Q3/21.

• On February 14, 2020, announced $5.7M in new contracts across the U.S. and Canada

CATALYSTS

• Stimulus spending in the U.S. and Canada

• Growth in acceptance of cellular concrete in North America through education and successful completion

of projects. Through the Canadian Highways Research Project, a 3-year research program initiated in

2018, the University of Waterloo is measuring the performance of cellular concrete as a roadway subbase

over weak and unstable soils. The program is co-funded by CEMATRIX and the Natural Science and

Engineering Research Council of Canada (NSERC). Preliminary results from lab and field tests have

indicated potential for much longer-lasting highways vs. traditional construction.

• Increasingly frequent and larger project orders

• An expansion of the relationship with Lafarge internationally in a couple years

• Acquisitions of other cellular concrete providers or supplementary businesses in 2021 and beyond

• Strategic alliances with other businesses in construction, including CRH, Dufferin, RECo and Atlantic

Industries

VALUATION

Our $1.20/share target price is based on 9.0x 2021 EBITDA. We note that EBITDA does not capture earn-out

payments, which cease for MOS in 2021 (C$0.9M in payments in Aug/20 and C$0.6M in Aug/21) and PIGCO in

October 2023 (~C$4.8M total over 4 years), as that would not reflect the earnings potential of the core

businesses in the long-run. Our major assumptions are as follows:

• Conversion of the backlog in 2020 at the lower end of company guidance of $40-45M, with a higher

concentration in the spring and summer for revenues. The remaining $33-38M on the current backlog

provides a solid foundation for revenues mostly realized in 2021, even without additional orders.

• 90% book-to-bill ratio in 2020 and 2021. This roughly translates to 30% capture of the current $275M

bid universe over the next 2 years. We note that contracts can be lumpy and extremely large as seen in

February this year, and there is room for substantial outperformance. The bid universe could also expand

meaningfully, and currently does not capture a number of potential orders.

• Gross margins of 28% in 2020 and 2021, an increase from 26% in 2019 but on the low range of the

expected 27-32%

INITIATION REPORT

May 6, 2020



18

• In 2020, G&A and sales & marketing expense at 13% and 6% of sales, respectively, vs. 16% and 8% in

2019. G&A falling to 11% and S&M to 5% in 2021.

In terms of comparable companies, CEMATRIX doesn’t have any direct public comps in North America, as all

competitors in cellular concrete are private. The table below includes concrete contractors/pumping companies

globally. We believe that CEMATRIX deserves to trade at a premium to this peer group for its exposure to the

higher growth cellular concrete market, in some cases a more attractive business environment/jurisdiction, and its

market-leading position.

RISKS

• Ongoing uncertainty around COVID-19. Construction is currently deemed an essential business, but the

pandemic introduces potential supply chain or demand disruptions.

• Cancellation or delay of projects if developers face constraints due to COVID-19 or a recession. In our

view, this would be compensated through additional orders as a result of federal and provincial/state

stimulus measures.

• Historically tight working capital and debt payments due this year, but this has improved recently through

the $5.5M convertible debenture raise in April and $20M of revenues potentially realized in the first half

of the year. CVX also is looking at securing a US operating loan up to $5.0M.

• Increasing cost of cement

• More competition in the U.S. – while CVX only notes two major competitors, there are a number of

smaller players that could capture market share. Competition in Canada would be welcomed to develop

the market.

• It could take longer than anticipated to develop the cellular concrete market in Canada

• Due to budgetary constraints or exogenous factors, government stimulus measures are not enacted as

hoped or delayed, including the $2T in infrastructure stimulus as suggested by President Trump

Comparable Companies - Concrete Contractors

($ in Millions Except Per Share and Per Unit Data) FY0 FY1 FY2

Company Name Ticker Market YoY Rev

Cap (CAD) FY19A FY20E FY21E FY19A FY20E FY21E FY19A FY20E FY21E FY19A FY20E FY21E Growth (%)

Ha Tien 1 Cement HT1.HM 300$ 4.3 x 4.1 x 4.2 x 0.9 x 0.8 x 0.8 x 7.7 x 6.9 x 6.8 x 3.9 x N/A N/A 5.5

Adana Cimento-A ADANA.IS 354$ 37.9 x N/A N/A 2.8 x N/A N/A 51.5 x N/A N/A 23.1 x N/A N/A -12.6

Tabuk Cement Co 3090.SE 403$ 13.6 x 9.6 x 6.4 x 7.6 x 5.2 x 3.8 x 58.8 x 25.7 x 9.3 x 12.5 x N/A N/A 59.7

Cemex Latam Holdings CLH.CN 371$ 7.5 x 5.5 x 5.0 x 1.5 x 1.1 x 1.0 x 44.6 x 7.4 x 5.8 x 8.5 x 3.1 x 2.5 x -10.8

UMM Al-Qura Cement Co 3005.SE 432$ 10.7 x N/A N/A 6.7 x N/A N/A 15.2 x N/A N/A 9.1 x N/A N/A 55.6

Cemex Holdings Phillipines CHP.PS 420$ 8.6 x 6.4 x 6.3 x 1.0 x 1.1 x 1.0 x NM 8.2 x 11.8 x 20.3 x 55.5 x 4.8 x 7.5

Hail Cement Co 3001.SE 440$ 9.2 x N/A N/A 4.5 x N/A N/A 21.5 x N/A N/A 9.4 x N/A N/A 40.0

Sampyo Cement Co 038500.KQ 452$ 8.6 x 7.2 x 7.3 x 1.5 x 1.4 x 1.3 x 22.9 x 13.5 x 13.4 x 5.7 x N/A N/A 3.4

Chong Kin Group Holdings Ltd. 1609.HK 458$ 110.8 x N/A N/A 9.9 x N/A N/A N/A N/A N/A N/A N/A N/A -1.8

Shanghai Chengdi Construction Corp. Ltd 603887.SS 1,630$ 15.5 x N/A N/A 2.5 x 2.3 x 1.9 x 19.8 x 18.6 x 17.5 x 16.9 x N/A N/A 132.0

Concrete Pumping Holdings Inc. BBCP.O 231$ 7.7 x 6.1 x 6.2 x 2.2 x 2.0 x 2.1 x N/A N/A N/A 6.7 x N/A N/A N/A

Maximum 110.8 x 9.6 x 7.3 x 9.9 x 5.2 x 3.8 x 58.8 x 25.7 x 17.5 x 23.1 x 55.5 x 4.8 x 132.0

75th Percentile 14.6 x 7.0 x 6.4 x 5.6 x 2.2 x 2.0 x 46.4 x 17.3 x 13.0 x 15.8 x 42.4 x 4.2 x 51.7

Average 21.3 x 6.5 x 5.9 x 3.7 x 2.0 x 1.7 x 30.3 x 13.4 x 10.8 x 11.6 x 29.3 x 3.7 x 27.8

25th Percentile 8.2 x 5.7 x 5.3 x 1.5 x 1.1 x 1.0 x 18.7 x 7.6 x 7.4 x 7.2 x 16.2 x 3.1 x -0.5

Minimum 4.3 x 4.1 x 4.2 x 0.9 x 0.8 x 0.8 x 7.7 x 6.9 x 5.8 x 3.9 x 3.1 x 2.5 x -12.6

CEMATRIX Corp. CVX 30$ 20.8 x 7.1 x 5.2 x 2.0 x 1.1 x 0.9 x NM NM 15.9 x 118 x 15.5 x 5.6 x 28.4

Source: Thomson Eikon, M Partners Estimates

EV/EBITDA EV/Revenue P/E P/CF

INITIATION REPORT

May 6, 2020



19

MANAGEMENT AND DIRECTORS

Management

Jeffrey Kendrick, President and Chief Executive Officer – Mr. Kendrick has been President and CEO since

June 2008 and also occupied the role from March 2005 to June 2007. He was CFO from June 2007 to June 2008.

Mr. Kendrick was one of the co-founders of CEMATRIX and has 20 years of experience in cellular concrete

including project management, operating equipment, quality control and general labour. Prior to CEMATRIX, he

was a public auditor and business advisor for Price Waterhouse from 1983-1989, CFO of Jager Industries Inc.

from 1989-1997 and President of Rocky Mountain Building Systems Inc. from 1997-1998. He is a chartered

professional accountant and chartered accountant.

Pat Stephens, President of PIGCO – Mr. Stephens is the founder of Pacific International Grout with over 40

years of experience in cellular concrete. He developed all his equipment and technology, patented numerous

cellular concrete technologies and continues to lead PIGCO post-acquisition.

Jordan Weiner, President of MixOnSite – Mr. Weiner co-founded MixOnSite with his dad, who had 20 years

of cellular concrete experience. He worked his way up from general labourer, to operator, sales and estimating,

and then President five years ago. He continues to lead MOS post-acquisition.

James Chong, Chief Financial Officer – Mr. Chong has been CFO for 1.5 years, bringing over 20 years of

experience in senior financial roles at oil & gas and mining companies, including Sherritt International

Corporation, Terra Energy Corp, Navigo Energy Inc and AltaGas Ltd, as well as working at Ernst & Young LLP. He

is a chartered accountant and chartered professional accountant.

Board of Directors

Jeffrey Kendrick, CEO – see above

Robert L. Benson – Mr. Benson retired in 2007. He was Vice President and Chief Operating Officer of Kemex

Limited, an engineering company focused on design engineering of process facilities in the oil & gas field, from

2005 to 2007. He was also President of Montreal Engineering from 2005-2007 and President and CEO of

CEMATRIX Corp. from 2002-2005.

Steve Bjornson – Mr. Bjornson is a consultant and recently retired as Chief Financial Officer of Valeura Energy

Inc., a role he held since June 2010, a Calgary-based company engaged in the exploitation, development and

production of petroleum and natural gas, both domestically and internationally. Prior to that, he held various

finance-based roles at Sound Energy Trust, Clear Energy Inc. and Vermillion Resources Inc.

Patrick N. Breen, Q.C. – Mr. Breen is a Partner with Miller Thompson LLP since March 2019. Prior to that he

was with McLeod Law LLP from May 1996 to March 2019. He is highly experienced in corporate law and advises

on structuring corporate holdings.

Dan Koyich – Mr. Koyich is retired. He was previously President of JeanDan Management Ltd., which provided

consulting and investor relations services. He was also on the board of Vexco Healthcare, CEAPRO Inc. and

Adanac Moly Corp.

INITIATION REPORT

May 6, 2020



20

Minaz Lalani – Mr. Lalani is Executive Chairman of Besurance Corporation, which is involved with the design and

implementation of risk sharing solutions since July 2013. He is also Managing Principal and consulting actuary at

Lalani Consulting Group since February 2010.

Ed Weiner – Mr. Weiner was President and owner of MixOnSite USA Inc. from 1999 to May 2018, where he

developed, designed and performed hundreds of projects. Prior to founding MOS, he owned and operated TCDI

for 20 years, which was focused on geotechnical contracting. He is now a consultant to MixOnSite.

FINANCIAL APPENDIX

($ in Millions CAD Except for Per Unit Data)

Historical

Income Statement: FY16 FY17 FY18 1Q19A 2Q19A 3Q19A 4Q19A FY19 1Q20E 2Q20E 3Q20E 4Q20E FY20 FY21

Revenue 9.6 7.7 17.6 3.2 6.4 7.6 5.3 22.6 3.5 12.5 15.5 8.5 40.0 50.0

Cost of sales (8.3) (6.9) (13.2) (2.7) (4.6) (5.3) (4.2) (16.8) (2.5) (9.0) (11.2) (6.1) (28.8) (36.0)

Gross profit 1.3 0.8 4.3 0.5 1.8 2.4 1.1 5.8 1.0 3.5 4.3 2.4 11.2 14.0

Operating expenses

General and administrative 1.1 1.1 2.0 0.6 0.7 1.2 1.1 3.6 1.2 1.3 1.4 1.3 5.1 5.5

Sales, marketing and engineering 1.1 1.1 1.7 0.4 0.4 0.5 0.5 1.9 0.5 0.5 0.6 0.6 2.2 2.5

Total operating expenses 2.3 2.2 3.6 1.0 1.1 1.7 1.6 5.4 1.8 1.8 2.0 1.9 7.4 8.0

Operating income (1.0) (1.4) 0.7 (0.5) 0.7 0.7 (0.5) 0.4 (0.8) 1.8 2.3 0.5 3.8 6.0

Non-cash stock based compensation (0.1) 0.0 (0.1) (0.0) (0.1) (0.2) (0.1) (0.5) (0.0) (0.1) (0.2) (0.3) (0.6) (0.5)

Finance costs (0.2) (0.2) (0.5) (0.2) (0.2) (0.2) (0.3) (1.0) (0.3) (0.3) (0.4) (0.4) (1.3) (1.0)

Other income (expenses) (0.0) 0.0 (0.2) 0.2 0.1 (0.0) 1.4 1.6 0.0 0.0 0.0 0.0 0.1 0.0

Amortization of intangibles - - - (0.1) (0.1) (0.1) (0.2) (0.6) (0.2) (0.2) (0.2) (0.2) (0.8) (0.8)

Acquisition costs - - (0.6) (0.0) (0.0) (0.3) (0.0) (0.4) - - - - - -

Accretion costs - - (0.3) (0.1) (0.2) (0.1) (0.1) (0.5) - - - - - -

PIGCO earn-out - - - - - - - - - - (0.7) - (0.7) (1.2)

Revaluation of earn-out liability - - (0.3) - 0.1 0.3 (0.0) 0.4 - - - - - -

Non-cash fair value of derivatives - - 0.1 (0.1) 0.1 (0.2) 0.3 0.1 - - - - - -

(0.4) (0.2) (2.0) (0.5) (0.3) (0.9) 1.0 (0.7) (0.5) (0.6) (1.5) (0.8) (3.4) (3.5)

Loss before income taxes (1.3) (1.5) (1.3) (1.0) 0.4 (0.2) 0.5 (0.3) (1.3) 1.2 0.8 (0.3) 0.4 2.5

Provision of deferred taxes 0.2 0.4 0.2 0.2 (0.2) (0.1) 0.3 0.2

Provision of current taxes (0.1) (0.0) (0.0) (0.1) - (0.3) (0.2) - (0.5) (0.7)

Loss attributable to common shareholders (1.1) (1.2) (1.1) (0.8) 0.2 (0.3) 0.7 (0.3) (1.3) 0.8 0.6 (0.3) (0.1) 1.9

Unrealized FX gain (loss) on translation of foreign subsidiaries (0.0) 0.0 0.4 (0.2) (0.2) 0.1 (0.2) (0.5) - - - - - -

Total comprehensive income (1.1) (1.2) (0.7) (1.0) 0.0 (0.2) 0.5 (0.7) (1.3) 0.8 0.6 (0.3) (0.1) 1.9

EBITDA -0.5 -0.9 1.7 -0.1 1.1 1.1 0.1 2.1 -0.2 2.4 2.9 1.1 6.3 8.5

Margin -5.0% -12.1% 9.5% -4.4% 17.4% 14.0% 1.4% 9.4% -4.4% 18.9% 19.0% 13.2% 15.7% 16.9%

Earnings per Share

Basic (0.03)$ (0.03)$ (0.03)$ (0.02)$ 0.00$ (0.01)$ 0.01$ (0.01)$ (0.02)$ 0.01$ 0.01$ (0.00)$ (0.00)$ 0.02$

Diluted (0.03)$ (0.03)$ (0.03)$ (0.02)$ 0.00$ (0.01)$ 0.01$ (0.01)$ (0.02)$ 0.01$ 0.01$ (0.00)$ (0.00)$ 0.02$

Weighted average Number of Common Shares

Basic 34.4 34.5 39.9 44.5 44.5 50.3 55.4 49.7 60.4 62.2 63.7 63.7 63.7 77.1

Diluted 34.4 34.5 39.9 44.5 44.5 50.3 55.4 49.7 60.4 77.8 79.3 63.7 63.7 84.8

Projected

INITIATION REPORT

May 6, 2020



21


Historical

Statement of Financial Position: FY16 FY17 FY18 1Q19A 2Q19A 3Q19A 4Q19A FY19 1Q20E 2Q20E 3Q20E 4Q20E FY20 FY21

ASSETS:

Current assets

Cash and cash equivalents 0.1 0.0 0.7 0.3 0.9 1.3 0.8 0.8 0.4 3.4 2.8 4.1 4.1 6.8

Term deposit 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1

Trade and other receivables 2.1 0.9 5.2 4.6 5.0 7.5 4.7 4.7 3.3 11.0 13.6 7.5 7.5 10.3

Inventory 0.5 0.4 0.4 0.5 0.5 0.5 0.7 0.7 0.4 0.8 1.0 1.0 1.0 1.0

Prepaid expenses and deposits 0.1 0.1 0.2 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3

Share acquisition loans 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total current assets 2.9 1.6 6.5 5.7 6.8 9.6 6.6 6.6 4.5 15.6 17.9 13.0 13.0 18.5

Non-current assets

Share acquisition loans 0.0 0.0 - - - - - - - - - - - -

Property and equipment 3.4 3.2 5.5 6.0 5.8 5.6 14.5 14.5 13.9 13.4 13.0 12.5 12.5 10.6

Goodwill and intangibles 0.5 0.6 7.3 7.0 6.8 6.8 8.1 8.1 8.2 8.2 8.2 8.2 8.2 8.2

Deferred tax asset 0.7 1.1 1.1 1.2 1.1 1.0 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9

Total long-term assets 4.7 5.0 13.9 14.3 13.7 13.4 23.5 23.5 23.0 22.5 22.1 21.6 21.6 19.7

Total Assets 7.6$ 6.5$ 20.4$ 19.9 20.6 23.0 30.2 30.2 27.5 38.2 39.9 34.7 34.7 38.2

LIABILITIES AND EQUITY:

Current liabilities

Bank overdraft 0.0 0.1 0.5 0.0 0.1 0.0 0.2 0.2 - - - - - -

Bank operating loan - 0.1 1.2 1.3 1.1 1.2 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9

US operating loan - - 1.0 1.0 1.0 1.0 2.2 2.2 1.7 0.6 0.3 - - -

Trade and other payables 0.5 0.6 2.0 2.1 2.9 4.0 2.4 2.4 1.7 6.4 8.7 4.4 4.4 7.6

Current portion of long term debt 0.3 0.3 0.7 0.7 0.7 0.7 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2

Current portion of lease obligations 0.1 0.1 0.2 0.3 0.3 0.2 0.4 0.4 0.3 0.3 0.2 0.2 0.2 0.2

Current portion of earn-out liability - - 1.1 1.1 1.0 0.8 0.9 0.9 0.9 1.5 0.6 0.6 0.6 -

Total current liabilities 0.9 1.1 6.7 6.5 7.0 8.0 8.2 8.2 6.7 10.9 12.0 7.4 7.4 10.0

Non-current liabilities

Long-term debt 2.0 1.9 3.4 3.6 3.7 3.3 6.1 6.1 6.1 6.1 5.5 4.9 4.9 3.7

Lease obligations 0.2 0.2 0.1 0.6 0.6 0.5 1.5 1.5 1.6 1.6 1.5 1.5 1.5 1.3

Earn-out liability - - 1.1 1.2 1.2 0.6 0.6 0.6 0.6 - - - - -

Convertible note - - 3.4 3.5 3.3 3.5 3.2 3.2 3.2 3.2 3.2 3.2 3.2 -

Convertible debenture - - - - - - - - - 5.5 5.5 5.5 5.5 5.5

Deferred tax liability - - 1.0 0.9 0.9 0.9 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0

Total Liabilities 3.0 3.1 15.7 16.1 16.6 16.9 22.6 22.6 21.2 30.2 30.7 25.4 25.4 23.4

Equity

Share capital 7.5 7.5 9.1 9.1 9.1 10.0 11.0 11.0 11.0 11.6 12.1 12.1 12.1 15.3

Contributed surplus 0.9 0.9 1.3 1.3 1.4 2.9 2.9 2.9 3.0 3.1 3.3 3.6 3.6 4.1

Accumulated other comprehensive income (0.0) (0.0) 0.3 0.2 (0.0) 0.1 (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.1)

Deficit (3.8) (5.0) (6.1) (6.8) (6.6) (6.9) (6.2) (6.2) (7.5) (6.6) (6.0) (6.3) (6.3) (4.4)

Total Equity 4.6 3.4 4.7 3.8 3.9 6.1 7.6 7.6 6.3 7.9 9.3 9.3 9.3 14.8

Total Liabilities and Equity: 7.6$ 6.5$ 20.4$ 19.9$ 20.6$ 23.0$ 30.2$ 30.2$ 27.5$ 38.2$ 39.9$ 34.7$ 34.7$ 38.2$

Projected

INITIATION REPORT

May 6, 2020



22


Historical

Statement of Cash Flows: FY16 FY17 FY18 1Q19A 2Q19A 3Q19A 4Q19A FY19 1Q20E 2Q20E 3Q20E 4Q20E FY20 FY21

CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income (1.1)$ (1.2)$ (1.1)$ (0.8)$ 0.2$ (0.3)$ 0.7$ (0.3)$ (1.3)$ 0.8$ 0.6$ (0.3)$ (0.1)$ 1.9$

Adjustments for:

Provision for deferred taxes (0.2) (0.4) (0.2) (0.2) 0.2 0.1 (0.3) (0.2) - - - - - -

Depreciation and amortization 0.5 0.5 1.0 0.4 0.4 0.4 0.6 1.8 0.6 0.6 0.6 0.6 2.5 2.5

Non-cash stock based compensation 0.1 (0.0) 0.1 0.0 0.1 0.2 0.1 0.5 0.0 0.1 0.2 0.3 0.6 0.5

Loss on sale of equipment 0.0 0.0 - 0.0 - - - 0.0 - - - - - -

Gain on business combination (1.3) (1.3)

Unrealized FX gain (loss) - - 0.3 (0.1) (0.1) 0.1 (0.1) (0.3) - - - - -

Non-cash accretion of convertible note and earn-out - - 0.3 0.1 0.2 0.1 0.1 0.5 - - - - - -

Non-cash accretion of share acquisition loans (0.0) (0.0) (0.0) (0.0) (0.0) (0.0) (0.0) (0.0) - - - - - -

Non-cash fair value adjustment in derivative liability - - (0.1) 0.1 (0.1) 0.2 (0.3) (0.1) - - - - - -

Non-cash fair value adjustment in earn-out liability - - 0.3 - (0.1) (0.3) 0.0 (0.4) - - - - - -

Non-cash interest on share acquisition loans - - (0.0) (0.0) (0.0) (0.0) (0.0) (0.0) - - - - - -

Change in Working Capital:

Trade and other receivables 2.5 1.2 (2.2) 0.6 (0.5) (2.4) 3.4 1.0 1.6 (7.7) (2.6) 6.1 (2.6) (2.8)

Inventory 0.1 0.0 0.2 (0.2) 0.0 0.0 (0.2) (0.3) 0.2 (0.4) (0.2) (0.0) (0.3) 0.0

Prepaid expenses and deposits (0.1) 0.0 (0.0) 0.1 (0.1) 0.0 (0.1) (0.1) - - - - - -

Trade and other payables (1.6) 0.1 0.4 0.1 0.8 1.1 (2.5) (0.6) (0.9) 4.8 2.3 (4.3) 1.8 3.2

Net Cash Provided by Operating Activities: 0.2$ 0.3$ (1.1)$ 0.1$ 0.8$ (0.8)$ 0.1$ 0.3$ 0.4$ (1.7)$ 0.9$ 2.4$ 1.9$ 5.3$

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment (0.3) (0.2) (0.0) (0.2) (0.1) (0.0) (0.2) (0.7) (0.1) (0.1) (0.2) (0.2) (0.5) (0.5)

Proceeds on sale of property and equipment 0.0 0.0 - 0.0 - - - 0.0 - - - - - -

Purchase of intangibles (0.1) (0.2) (0.1) (0.0) (0.0) (0.0) (0.0) (0.0) (0.0) (0.0) (0.0) (0.0) (0.0) (0.0)

Purchase of term deposit (0.0) - - - - - - - - - - - -

Repayments on share acquisition loans 0.0 0.0 0.0 - - - 0.0 0.0 - - - - - -

Net cash paid on acquisition - - (2.8) - - - (3.4) (3.4) - - - - - -

Net Cash Used in Investing Activities: (0.4)$ (0.3)$ (2.9)$ (0.2)$ (0.1)$ (0.1)$ (3.6)$ (4.0)$ (0.1)$ (0.1)$ (0.2)$ (0.2)$ (0.6)$ (0.6)$

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from (repayment of) bank operating loan - 0.1 1.1 0.1 (0.2) 0.2 (0.3) (0.3) - - - - - -

Payments of U.S. operating loan (0.1) (0.1) (0.5) (1.1) (0.3) (0.3) (2.2)

Proceeds from long term debt 0.5 0.3 2.3 0.2 0.1 - 3.7 4.0 - 5.5 - - 5.5

Procceds from government grants on intangibles - 0.1 0.0 - - - - - - - - - - -

Repayment of finance lease obligations (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.2) (0.1) (0.1) (0.1) (0.1) (0.3) (0.2)

Repayments of long term debt (0.3) (0.3) (0.5) - - (0.3) (0.3) (0.7) - - (0.6) (0.6) (1.2) (4.3)

Repayment on factoring (0.7) - - - - - - - - - - - - -

Repayment of mezzanine loan (0.8) - - - - - - - - - - - - -

Repayment of earnout liability - - - - - (0.5) - (0.5) - - (0.9) - (0.9) (0.6)

Proceeds from private placement - - 1.2 - - 2.1 - 2.1 - - - - - -

Issue of common shares 0.0 - 0.0 - - - - - - 0.6 0.5 - 1.1 3.2

Net Cash Provided by Financing Activities: (1.3)$ 0.0$ 4.1$ 0.2$ (0.1)$ 1.4$ 2.9$ 4.4$ (0.6)$ 4.9$ (1.3)$ (0.9)$ 2.1$ (2.0)$

FX effect on cash (0.0) 0.0 0.0 (0.0) 0.0 0.0 (0.0) (0.0) - - - - - -

Change in Cash and Cash Equivalents: (1.4) (0.1) 0.1 0.1 0.6 0.5 (0.7) 0.5 (0.3) 3.1 (0.6) 1.3 3.5 2.7

Beginning Cash: 1.5 0.1 (0.0) 0.1 0.2 0.5 1.3 0.1 0.7 0.4 3.4 2.8 0.7 4.1

Ending Cash: 0.1$ (0.0)$ 0.1$ 0.2$ 0.8$ 1.3$ 0.7$ 0.7$ 0.4$ 3.4$ 2.8$ 4.1$ 4.1$ 6.8$

Bank overdraft (0.0) (0.1) (0.5) (0.0) (0.1) (0.0) (0.2) - - - - - -

CFPS (FD) (0.0)$ (0.00)$ 0.0$ 0.0$ 0.0$ 0.0$ (0.0)$ 0.0$ (0.0)$ 0.0$ (0.0)$ 0.0$ 0.1$ 0.0$

Projected

INITIATION REPORT

May 6, 2020



23

Disclosure Code: None

Disclosure The particulars contained herein were obtained from sources which we believe to be reliable but are not guaranteed by us and may be incomplete. The opinions expressed are based upon our analysis and interpretation of these particulars and are not to be construed as a solicitation or offer to buy or sell the securities mentioned herein. Disclosure codes are used in accordance with Policy 3400 of IIROC. Description of Possible Disclosure Codes

1. M Partners or its affiliates collectively beneficially own 1% or more of any class of equity securities of the company which is the subject of the research report.

2. The analyst or any associate of the analyst responsible for the report or public comment hold shares in the company. 3. M Partners or a director or officer of M Partners or any analyst provided services to the company for remuneration other than

normal investment advisory or trade execution services within the preceding 12 months, (may seek compensation for investment banking services from the company herein within the next 3 months).

4. The director, officer, employee or research analyst is an officer, director or employee of the company, or serves in an advisory capacity to the company.

5. The analyst has viewed the material operations of the company. We define material operations as an issuer's corporate head office and its main production facility or a satellite facility that is representative of the company's operations.

6. M Partners provided investment banking services for the company during the 12 months preceding the publication of the research report.

7. The analyst preparing the report received compensation based upon M Partners investment banking revenues for this issuer.

Dissemination All final research reports are disseminated to institutional clients of M Partners simultaneously in electronic form. Hard copies will be disseminated to any client that has requested to be on the distribution list of M Partners. Reproduction of this report in whole or in part without permission is prohibited. Research Analysts The Research Analyst(s) who prepare this report certify that their respective report accurately reflects his/her personal opinion and that no part of his/her compensation was, is, or will be directly or indirectly related to the specific recommendations or views as to the securities or companies. M Partners compensates its research analysts from a variety of sources and research analysts may or may not receive compensation based upon M Partners investment banking revenue. Member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund Participating organization of the Toronto Stock Exchange and the TSX Venture Exchange http://www.mpartners.ca/email_disclaimer.html

about:blank

Documents

S INITIATION REPORT - The Howard Group€¦ · CEMATRIX CORPORATION Member of the Investment Industry Regulatory Organization of Canada (IIROC) Participating Organization – Toronto