Crocus did receive a $10 million investment from Solidarity, the Quebec
Investment Fund, in December and I have attached the news release we
distributed at that time. I have also attached a copy of a Free Press news
story that was published when the announcement was made. Crocus and
Solidarity also did interviews with CBC radio as to why this investment was
positive for Manitoba.
As I said then, Crocus is thrilled that Solidarity chose to invest in our
Fund and make additional capital available to Manitoba companies. Venture
funds historically expect to earn 20% to 30% or more per year on their
venture investments and, in this case, Crocus has negotiated a 10% cost of
capital. The terms of this investment are very favourable to Crocus.
As for the inference to liquidity raised by the letter, it is simply false.
As reported in our year-end audited financial statements (Sept 30/02), the
Fund has $25 million in cash. The Solidarity investment provides $10
million in additional cash. And based on sales so far, we expect to raise
close to $30 million this RRSP season and further increase the Fund's cash
position to invest in Manitoba businesses. Our strong cash position also
directly refutes the letter's suggestion that we will be forced to
imprudently liquidate existing investments to repay Solidarity in two years
as anticipated. We will, of course, continue to liquidate investments in
the normal course of our business to maximize shareholder value, as was the
case with our investment in the Angus Reid Group, among others.
If you have further questions, please do not hesitate to call Jane Hawkins,
our Chief Financial Officer (925-7775) or Bob Jones, one of our
Vice-Presidents (925-7771) for any further assistance.
Regards,
Sherman
<<NR solidarite final dec3.doc>> <<Solidarite investment - Free Press
story.doc>>
.
As a partner in the ownership group Crocus funds its share of business losses and assumes its share of business profits. As you can appreciate we are not in a position to comment on the business outcomes of any of the private businesses in our portfolio but having said that, the Manitoba Moose are in a significantly stronger financial position since the team signed the affiliation agreement with the Vancouver Canucks of the NHL. This agreement creates a significant new revenue stream for the team and as a partner Crocus expects the investment to earn a profit in the long term. As you can also appreciate the transition to the new True North Entertainment Complex will also greatly benefit the team and our investment.
I trust this answers your question. If you have need of further information please contact me directly.
Bob Jones
Vice President, Marketing & Communications
(204) 925-7771
bjones@crocusfund.com
Thank you for your question. I've attached a response from the
Fund's CFO.
$25.6 Million is the issuance of Class A common shares in 2002 which was offset by redemptions of $17.1 million as noted in financial statements. The net proceeds were $8.5 million less commissions and service fees. The cost of the investment portfolio declined $7 million year over year if you compare the 2001 Consolidated statement of Investments to 2002 ConsolidatedStatement of Investments. This divestiture in the investment portfolio generated a realized loss of $16.1 million in the portfolio which is fully reflected in today's sharevalue. Offsetting this loss and reflected in Crocus's sharevalue is a $9.8 milllion unrealized appreciation in the value of the investments in Manitoba Businesses as of September 30, 2002. Crocus has experienced a decline in sharevalue over the last two year's due to market conditions but the future performance is anticipated to be strong.
I trust this answers your question. If you require further information
please feel free to contact me directly.
Respectfully,
Bob Jones Vice President, Marketing
Crocus Investment Fund
5th Floor, 211 Bannatyne Ave.
Winnipeg, MB R3B 3P2
phone direct: (204) 925-7771
fax: (204) 956-2770
email: bjones@crocusfund.com
Bravo,Jerry!A keeper,for sure.Lesley (Hughes)
--- EXPERIENCED IN WINNIPEG <jershore@hotmail.com>
wrote:
---------------------------------
We trust you have already received your apology, but
are surprised that our communication has not even
received an acknowledgement. The question remains has
a warning shot been fired by Crocus or Wellington
West, because the opposition's silence is deafening?
Do we wait for a senior's retirement portfolio to be
wiped out?
The top three "investments" wiped off the books cost
Manitoba investors over $30,000,000 at least.
Arbitrary unrealized capital appreciation is
artificially propping up the fund's value it appears,
but red flags are all over the place when the Quebec
labour fund put in $10,000,000 recently. It implies
they can't meet the anticipated cash call for the 2003
selling-redemption period, because the Quebec fund
wouldn't get tax benefits, the shares have dropped 15%
in two years, [arbitrarily determined,] Crocus lost
over $21 M in 2 years and is in a negative retained
earnings dilemma.
There are more problems on the horizon. There is not
one tax lawyer or accountant anywhere that would
consider the annual flushing of 3/4 to $1 M per year
down the Moose toilet as an investment. True North is
artificially buying the team with taxpayers equity to
transfer the losses of the Moose into some paper tiger
investment in a doomed real estate project. Mezzo has
changed hands, Blye Bros have done nothing, other
invested companies continue to receive additional
capital - or can't make their interest payments due,
to Crocus!
Meanwhile, ads on tv and in the paper continue to
"sell the tax writeoff angle almost exclusively" and
could almost be considered misleading. Should the
provincial auditor be brought in? You are now aware of
the issues and we will watch in the coming days for
some appropriate action!
Jerry Shore
---------------------------------
<jershore@hotmail.com> To: jloewen@leg.gov.mb.ca CC:stuartmurray@leg.gov.mb.ca
the 2002 Crocus Fund annual report has been secreted onto their website, having been completed by the end of November 2002, under financials on their about us
page!
Westsun is gone, as you made public correctly. $20 million vanished!
$17.1M in shares were redeemed IN '02 as compared to $4.9 M in '01
The report suggests $25 M new shares bought, but does that include the $10 M ASSIST from a Quebec Labour Fund?
Another $ 900,000 + to the Moose -who lose money every year!
Start of 2001 share value of $ 14.93 to end of 2002 share value $12.72 a drop of $2.21 per share or almost -15 %
Loss for the year>>> Another $9,962,033 on top of the $12.6M lost last year!!
NET ASSETS Dropped by $3.5 Million
Deficit of <$8,804,796 > at the end of 2002 compared to +$18.2M RET EARNINGS at 2001 start.
IT WOULD APPEAR THAT YOU ARE OWED THE APOLOGIES MR.LOEWEN, AND ITS TIME TO DO SOME MAJOR RESEARCH INTO WHAT IS REALLY GOING ON OVER THERE, BEFORE ITS TOO LATE??
We have attached page 40 of the 2003 Crocus Fund Prospectus currently in circulation as commissioned agents all over the province try to sell Crocus Funds to their clients.We seroiusly doubt anyone reads the 75 page document, nor is the following part of the sales pitch:
The first 200 investors in 2003, who maximize their investment of $ 5000 , will see their funds sent to Quebec in the form of interest payments on emergency funding Crocus tapped into quietly.The next 2000 investors in 2003, who invest $5000, will see their funds set aside to payback the Quebec fund's $10,000,000. Then 200 more investors will pay year two's $1,000,000 interest. $12,000,000 from Manitoba investors, using $3.6 Million in tax credits, to pay Quebec investors huge, guaranteed profits.
Although Crocus can issue new classes of shares from time to time, on November 15, 2002, just 6 weeks after their year end losses were recorded, Crocus issued a whack of shares exclusively to the Quebec solidarite labour fund, announcing it in December as an investment in Crocus! They took in $10,000,000 in investment capital and they allowed everyone to surmise that it was as per other investments in Crocus. The Quebec fund spokesperson stated "we think it is a good investment"
NO KIDDING!
The Quebec fund is entitled to redeem their shares or any portion thereof, anytime after 18 months, while Manitobans have to wait eight years!
Holders of Series Three shares (exclusively the Quebec Fund) are guaranteed a minimum rate of return equal to 10% per annum, payable in advance starting on the last day of April and October in each year, and in priority to any payment of dividends on all other classes or series of shares.
In the event there are any Series Three Shares issued and outstanding on Nov 15, 2004 [two years from purchase] the holder of Series Three Shares will also be entitled to an additional fixed preferential cumulative cash dividend equal to 10% for each Series Three Share held at that date, and thereafter, on November 15 of each year. Interest at the rate of 10% per annum is payable on the amount of any unpaid dividends payable on the Series Three Shares.
The holders of Series Three Shares shall be entitled, in priority to the holders of all other classes of shares or series of shares to share equally in all remaining property and assets of the Fund in the event of liquidation, dissolution or winding-up of the Fund.
It appears Quebec is being paid 10% on their money, for up to two years, 20% on their money after two years, and 10% on their 20% (effective 22%) if Crocus falls behind on their ability to repay! Plus they want their $10,000,000 back, but will be in no hurry, when earning 20%!
Will you investigate now, or wait til the fund collapses, or forces some investee companies to liquidate and go out of business, costing job losses and bad vibes in the financial and investment community due to a lack of watchdog diligence.
Crocus Fund Prospectus 2003
This page was last updated on: February 24, 2007
Factoring in the $ 52.5 million in tax credits paid out of government coffers, the unitholders realize 7.8 per cent
RISK FACTORS
15.02
An investment in Common Shares of the Fund is speculative and may not be a suitable investment for all investors. There is no assurance of a positive return on a purcaser's original investment
DIVIDEND POLICY
9.0
To date, the Fund has not paid any dividends on the Common shares and accordingly has no dividend history. The Fund does not anticipate paying cash or stock dividends regularly, or at all, on the Common shres but rather intends to reinvest its earnings.
INABILITY OF FUND TO REDEEM
15.05
Notwithstanding the requirement of the fund to maintain the Reserve Fund, there is no guarantee that the Fund will be in a financial position to pay the Redemption Price for Common Shares at the time a redemption is requested.
In that case, the Fund may delay payment of the redemption Price for an indefinite period
JAMES UMLAH, Chief Investment Officer
President - Crocus Investment Fund
excerpts Winnipeg Free Press 28/01/03
While not a doomsayer, Umlah does have reservatins regarding the economic prospects for the Manitoba economy going into 2003. "we are very clearly a long-term investment," he says, pointing out the minimum hold period for investors in the fund is eight years.
During that span (since the fund came into existence in 1992) the fund has accumulated $ 175 Million and invested in 60 Manitoba companies. Since inception, unitholders have realized an annual compound rate of return of 2.4 per cent. Not bad considering the average Canadian equity fund over the last 10 years has averaged only 8.4 per cent per year.
LIABILITY FOR OPERATING COSTS
15.08
If the overall expenses of the Fund exceed its income, the resulting losses must be paid with capital raised through the issue of shares. The payment of such expenses will reduce the net income of the Fund, which could result in the Fund incurring losses.
Feb 27, 2003
Thank you for your e-mail message. I will answer your question in two parts:
Amendments to The Securities Act - financial loss
The Securities Act gives the commission jurisdiction to hold hearings. A hearing may be held to review the conduct of a registered person or firm, or to determine whether a member of the public has acted in a manner that is arisk to the public. In general terms, if the evidence shows risk to thepublic as a result of improper or illegal trading or advising in the trading of securities, the commission can issue an order following a hearing.
The commission can order the cancellation or suspension of a registration, issue a reprimand, or impose an administrative penalty. The commission can also limit or prohibit trading activity by a person or company that is not registered to trade in securities. What the amendments to the Act now add is
the ability to order (following a hearing) that an investor be paid a financial loss up to $100,000. The financial loss must have been caused by the improper or illegal activity that is the subject of the hearing.
As part of a complaint to the commission, an investor must make a claim to the commission asking for recovery of alleged financial loss. The Director reviews the claim and determines if it will be presented at a hearing. It is important to note the claim cannot stand on its own, there must be a decision to hold a hearing to deal with the improper or illegal conduct before a claim can be considered. A claimant also gives up the right to go to court on the same matter once the commission hearing commences.
The short answer to the question you ask in your message is that amendments do not "relieve" the MSC from responsibility for regulation, the jurisdiction of the commission to regulate securities markets has not
changed as a result of these amendments.
Crocus Fund prospectus
With respect to the Crocus fund itself, information about the fund is contained in the prospectus. The role of the commission in reviewing the prospectus is to see that the document provides full disclosure of the
investment (including risks) to the public. There are rules in place as to how information is presented in a prospectus, including financial information. The review by the commission also focuses on whether these
rules are being followed.
The commission does not provide investment advice as to whether a particular product is a good or bad investment. You have clearly made a determination about the fund based on your review of the publicly available documents and it is not the role of the commission to comment on the accuracy of your
conclusions. A registered salesperson that is permitted to sell the product would be in a position to review both the prospectus and your conclusions and provide advice to you.
Finally, with respect to your comment about awarding restitution to 2003 Crocus investors, any comment about what the commission may or may not do in the future is purely hypothetical. As stated above the commission continues to have jurisdiction to investigate complaints regarding the trading of securities in Manitoba. This would include a complaint received from a member of the public about allegedly misleading sales practices.
Douglas R. Brown Counsel & Director
The Manitoba Securities Commission
*(204) 945-0605 *doubrown@gov.mb.ca
The following information has been gathered from Crocus Financials and Prospectus, and regular monitoring of the Crocus fund website.
Share Value as determined by in-house evaluators.
21/09/02 $ 12.92 no chg
28/09/02 $ 12.72 drop of $2,564,631 yr end financials
2002 yr end cumulative drop of 87 cents/per or $ 11,156,097 in value
>>>> Fund receives $ 8.78 in Net share proceeds 20/03 No impact on Share value but additional ~ 694,071 shares in float, INCLUDES $10 M
7/03/03 $ 12.65 no chg
14/03/03 $ 12.64 drop of $143,076
21/03/03 $ 12.62 drop of $286,152
28/03/03 $ 12.61 drop of $143,076
>>>> 6 month report cutoff
4 /04/03 $ 12.24 drop of $5,293,812
7 /04/03 $ 12.30 back up by $858,000 revised Mon AM
11/04/03 $ 12.29 drop of $143,076
17/04/03 $ 12.26 drop of $429,228
25/04/03 $ 12.24 drop of $286,152
2/05/03 $ 12.25 incrs of $143,076
9/05/03 $ 12.24 drop of $143,076
16/05/03 $ 12.24 no chg (sale netting $7.5M announced )
23/05/03 $ 12.21 drop of $429,228 (SLM Bankrupt - $8.6 M)
30/05/03 $ 12.21 no chg
6/06/03 $ 12.22 incrs of $143,076
13/06/03 $ 12.24 incrs of $286,152
20/06/03 $ 12.10 drop of $2,003,000
27/06/03 $ 12.11 incrs of $143,076
4/07/03 $ 12.09 drop of $286,152
11/07/03 $ 12.09 no chg
18/07/03 $ 12.08 drop of $143,076
25/07/03 $ 12.07 drop of $143,076
1/08/03 $ 12.22 incrs of $ 2,146,140
8/08/03 $ 12.22 no chg
15/08/03 $ 12.21 drop of $143,076
22/08/03 $ 12.20 drop of $143,076
29/08/03 $ 12.22 incrs of $286,152
5/09/03 $ 12.22 no chg
12/09/03 $ 12.22 no chg
19/09/03 $ 12.07 drop of $2,147,640
26/09/03 $ 12.09 incrs of $286,152 Yr End
3/10/03 $ 12.07 drop of $286,152 from last week
10/10/03 $ 12.06 drop of $143,076
17/10/03 $ 12.05 drop of $143,076
24/10/03 $ 12.05 no change
31/10/03 $ 12.01 drop of $572,304
7/11/03 $ 12.00 drop of $143,076
14/11/03 $ 11.99 drop of $143,076
21/11/03 $ 11.99 no change
28/11/03 $ 11.98 drop of $143,076
5/12/03 $ 11.97 drop of $143,076
12/12/03 $ 12.00 incrs of $429,228 (posted on 17/12)
19/12/03 $ 11.99 drop of $143,076
24/12/03 $ 11.99 no change (Xmas short week)
2 /01/04 $ 11.99 no change ( calandar year end)
9 /01/04 $ 11.98 drop of $143,076
16/01/04 $ 12.00 incrs of $286,152
23/01/04 $ 12.03 incrs of $429,228 ( for prospectus value??)
30/01/04 $ 12.03 no change
6/02/04 $ 12.05 incrs of $$286,152
26/03/04 $ 12.17 incrs summ $1,716,912 end of 6 month
2/04/04 $ 12.16 drop of $142,804 ist week after interim
8/04/04 $ 12.14. drop of $285,609
16/04/04 $ 12.12 drop of $285,609
23/04/04 $ 12.10 drop of $285,609
30/04/04 $ 12.08 drop of $285,609
7/05/04 $ 12.05 drop of $428,413
14/05/04 $ 12.02 drop of $428,413
21/05/04 $ 11.99 drop of $428,413
28/05/04 $ 11.96 drop of $428,413
4/06/04 $ 11.94 drop of $285,609
11/06/04 $ 11.92 drop of $285,609
18/06/04 $ 11.90 drop of $285,609
25/06/04 $ 11.89 drop of $143,076
2/07/04 $ 11.87 drop of $285,609
9/07/04 $ 11.86 drop of $143,076
16/07/04 $ 11.86 no change (week prior to AGM)
23/07/04 $ 11.84 drop of $285,609 (one day after AGM)
30/07/04 $ 11.82 drop of $285,609
6/08/04 $ 11.81 drop of $143,076
13/08/04 $ 11.79 drop of $429,228
20/08/04 $ 11.78 drop of $143,076
27/08/04 $ 11.75 drop of $428,413
3/09/04 $ 11.73 drop of $285,609
10/09/04 $ 11.72 drop of $143,076
17/09/04 $ 11.71 drop of $143,076
24/09/04 $ 10.61 drop of $ 15,700,000 * Yr End
start of new fiscal year
1/10/04 $ 10.61 no chg
8/10/04 $ 10.59 drop of $285,609
15/10/04 $ 10.58 drop of $143,076
22/10/04 $ 10.56 drop of $285,609
29/10/04 $ 10.55 drop of $143,076
5/11/04 $ 10.54 drop of $143,076
12/11/04 $ 10.53 drop of $143,076
19/11/04 $ 10.50 drop of $428,413
26/11/04 $ 10.48 drop of $285,609
3/12/04 $ 10.45 drop of $428,413
10/12/04 SUSPENDED OPERATIONS
ENSIS, Crocus managing to weather financial storm Thu Mar 20 2003 By Geoff Kirbyson
WITH sales of investment products falling all around them, Manitoba's two labour-sponsored funds appear to be weathering the storm.
ENSIS Growth Fund and Crocus Investment fund combined for more than $23.42 million in net sales of their tax-advantaged funds for the year ending March 3, down nearly seven per cent from $25.10 million the year before.
Ken Bicknell, vice-president of ENSIS, said the five-year-old fund had gross sales of $14.72 million (down from $18.20 million last year), $70,000 in special redemptions for shareholders who have passed away during the year and net sales of $14.65 million. That's down nearly 20 per cent from net sales of $18.20 million during the previous year. (Living shareholders are required to hold ENSIS shares for a period of eight years)
Crocus, meanwhile, reported gross sales of $29.23 million (up from $25.30 million a year ago), redemptions of $20.45 million for net sales of $8.78 million. That's up 27 per cent from the $6.90 million in net sales during the 2001 year.
Dear Mr. Shore 21/04/03
Our shareholder records indicate that you are not a shareholder of the Fund nor an investee partner. Consequently, we can only assume that your letter is associated with some other motivation which is not stated in your letter. That being said, your Open Letter to Crocus is factually inaccurate.
The recent reduction in the share price will be reflected in the semi-annual statements which are published and distributed to shareholders and financial advisors. This is consistent with our policy and practice of ensuring the Fund's share price reflects the value of the underlying assets in the portfolio. Accordingly, your assertion that the Fund manipulated the timing of changes in the valuation is both inaccurate and irresponsible.
As Crocus investors know, the Fund is valued on a weekly basis to consistently reflect the value of the entire portfolio including investments (debt and equity) in approximately 60 Manitoba businesses, and a range of liquid investments. The investments in Manitoba businesses are valued by qualified professionals. These valuations are reviewed by an independent Chartered Business Valuator to ensure compliance with rigorous valuation standards and further external verification occurs as part of the audit process conducted by PricewaterhouseCoopers.
The most recent decline in the share price is the result of our ongoing valuation of portfolio and reflects among other things, the challenge of finding additional venture capital for pre-revenue businesses. The supply of venture capital which has been constrained as a result of the ongoing recession has been further reduced in the last six weeks by the threat and ultimate onset of war. Ultimately this constraint impacted businesses in our portfolio. In the event the supply of venture capital increases in the future (which most economists predict) this too may be reflected in the value of the Crocus portfolio - positively.
Crocus has more than 33,000 Manitoba shareholders and has been recommended to investors by more than 1400 financial advisors. These investors and investment professionals are familiar with the "risk" and "benefit" of investing, and recognize that venture capital investments will be subject to potentially significant shifts in share value associated with changes in market conditions and the fortunes of individual businesses. There are approximately 50 labour-sponsored funds in Canada and each and every one has or will experience significant and in some cases dramatic shifts in share price from time to time. By undertaking a simple check on Globe Fund (for example) you would find that Crocus is one of the less volatile among LSIFs in Canada although not immune from changes in share price - both positive and negative.
I hope this information satisfies your concerns.
Regards,
Bob Jones
Vice President Crocus Investment Fund
Appeared in Free Press 22/04/03 82cm x 84 cm b/w
The announced sale of $29,451,863 million is for the sale of Class "A" common shares only and does not include the institutional investment by Solidarite.
Regards Bob Jones, Sr. V. P. Crocus Fund 22/04/03
32. I have heard that LSIFs value their own holdings.
Crocus' mandate and legislation require that the Crocus share price accurately reflects the value of its underlying assets. Our investments fall into two main categories, shares traded on a public exchange like the TSE or the CDNX or shares in private companies. Publicly traded shares are valued monthly based upon market information, adjusted to reflect the liquidity of the shares.
Qualified professionals value all private shares. In this regard, each investment is valued at least annually. However, an investment might require additional valuation attention if a material change occurs during the year. The Crocus investment team continually monitors each investment's performance. A positive or negative material change in an Investee company's circumstances will trigger a revaluation at any point throughout the year. For example, if an investee raises funds from an independent third party at a higher price per share than our last valuation, we will increase our share price to reflect that market valuation. Conversely, if an investee lost a major customer that could have a material negative affect, we will revalue and reduce our share price.
THE CORPORATIONS ACT
Section 150
Order No. 4105
April 16, 2003
CROCUS INVESTMENT FUND
WHEREAS:
(A) Application has been made on behalf of Crocus Investment Fund (the "Applicant") to The Manitoba Securities Commission (the "Commission") for an order pursuant to subsection 150 (1) of The Corporations Act, R.S.M. 1987, c. C225 (as amended) (the "Act") that the Applicant be granted an exemption from the requirement to distribute to each shareholder a comparative interim financial statement as is required under subsection 149(3) of the Act.
(B) It has been represented to the Commission by the Applicant that:
1. The Applicant is a Manitoba based labour-sponsored venture capital corporation with a current capitalization of over $170,000,000.
2. The Applicant is a corporation created by The Crocus Investment Fund Act and is a prescribed labour-sponsored venture capital corporation for the purposes of the Income Tax Act (Canada) and The Income Tax Act (Manitoba). Pursuant to Commission Order No. 3581 dated November 22, 2001, the Applicant is designated as a mutual fund company for the purposes of The Securities Act (Manitoba) (the "Securities Act"). The Applicant's Class A Common Shares are offered for sale to the public on a continuous basis by way of a long form prospectus currently dated January 23, 2003, for which a receipt was issued by the Director of the Commission on January 28, 2003.
3. The Applicant is subject to the reporting requirements of Parts X, XI and XII of the Securities Act.
4. The Applicant is required by subsection 129(5) of the Securities Act to mail to its shareholders by prepaid mail its Interim Statements within 60 days of the date to which they are made up (the "Securities Law Requirements").
5. The Applicant is also subject to the requirements of the Corporations Act and is required by subsection 149(3) of the Corporations Act and by Section 11 of the Regulation to the Corporations Act (Regulation 385/87) to mail to each of its shareholders its Interim Statements within 60 days of the date to which they are made up (the "Corporate Law Requirements").
6. The Applicant files its Interim Statements with the Commission on SEDAR and the Interim Statements are available for viewing on the Applicant's website at www.crocusfund.com and on the SEDAR website at www.sedar.com.
7. The Commission recently passed MSC Rule 2002-2 which adopted National Instrument 54-102 entitled, "Interim Financial Statement and Report Exemption" ("NI 54-102"). NI 54-102 exempts issuers from the requirements in securities legislation to send Interim Statements to its shareholder provided that the issuer establish a "supplemental list" of those shareholders that elect, on an annual basis, to receive the Interim Statements.
8. Although NI 54-102 exempts the Applicant from the Securities Law Requirements, the Applicant is still subject to the Corporate Law Requirements and is therefore required to send its shareholders the Interim Statements.
9. Subsection 150(1) of the Corporations Act allows the Commission, if satisfied that in the circumstances of the particular case there is adequate justification for so doing, to make an order exempting a corporation from the Corporate Law Requirements.
(C) The Commission is of the opinion that there is adequate justification to grant the order requested.
IT IS ORDERED THAT:
1. The Applicant is hereby exempted from the requirements of subsection 149(3) of The Corporations Act (Manitoba) and shall not be required to deliver its comparative interim financial statements to its securityholders provided that the Applicant complies with the requirements of National Instrument 54-102.
2. The fee for this order shall be $25.00.
BY ORDER OF THE COMMISSION Deputy Director - Legal
Inner-Tec sold to multinational
Crocus fund gets $10M from security firm deal
Friday, May 9th, 2003 By Martin Cash WFP
WINNIPEG-based security personnel company Inner-Tec Security has been sold to Initial Security Services, a multinational security firm, producing a handsome profit for its owners including one of Manitoba's labour-sponsored venture capital funds.
The Crocus Investment Fund owned a majority stake in Inner-Tec and the fund's share of the proceeds of the sale of the national company will exceed $10 million. Its investment in the company was less than $3 million.
Inner-Tec has about 1,200 employees from Toronto to Victoria and about $25 million in annual sales. Initial Security's Canadian operations are almost four times as large as Inner-Tec's and operates in all the same markets. The deal is being characterized as a merger to clients of the two firms, an indication the two companies make a neat fit.
Inner-Tec was founded in Winnipeg in 1980 by a former Winnipeg police officer, Mike Menzies, who sold it to Imperial Parking in 1995 which, in turn, was acquired by a U.S. venture capital firm. Menzies and Crocus reacquired Inner-Tec in 1999.
"Our business model is to buy businesses, grow and develop them as financial investors and then sell them to strategic players who can pay more for them," James Umlah, chief investment officer of Crocus, said in an interview yesterday.
"As our portfolio matures, instead of two or three of these types of deals per year we will probably be doing four or five."
Mike Schroeder, president of Initial Security Services North America, based in San Antonio, Tex., said his company was impressed by the superior management at Inner-Tec and was interested in the deal because it could work as a "bolt-on" addition to Initial's Canadian operations.
"We are always looking for acquisitions that are operating in the same markets we are in and give us the chance to increase our market share," Schroeder said in a telephone interview from Edmonton yesterday. "In addition Inner-Tec is in the same commercial and industrial markets that we are in."
Initial Security Services is part of the U.K.-based Rentokil Initial plc, a multi-national corporation in the pest control, cleaning and security business with $5 billion in annual revenue.
Menzies said Inner-Tec had about three years of good growth, touched off by the acquisition of a Toronto security firm in 2000.
"That gave Inner-Tec the ability to bid on more national accounts," Menzies said. "We were in five provinces and seven cities."
Menzies will continue to work with Initial for a number of months. He is also the principal of another company called Urban Auto Park, which manages 11 parking lots in Winnipeg on behalf of the Forks/North Portage Partnership.
Commenting on the excellent return on its investment, Umlah said it is the kind of results the fund expects, just as it also expects to be victims of some failures.
"Just like we tell people on the occasion of the failures like Isobord and Westsun, this is what is supposed to happen," Umlah said.
As in many other industries, there is consolidation taking place in the security business and Umlah said Crocus and Menzies were approached by an interested buyer last year which prompted them to see if there was interest from any other parties.
He said that part of the Crocus model is to be able to sell to a strategic buyer at a time that will get the best price and also attempt to ensure the business will continue to grow in Manitoba with the new owners.
martin.cash@freepress.mb.ca
Crocus selling off some of its portfolio
Saturday, May 10th, 2003 By Martin Cash WFP
NOW that the Crocus Investment Fund is in its 11th year of operation, it should not be a surprise that the labour-sponsored venture capital fund is looking to divest some of its portfolio with about as much energy as it is looking for new companies in which to invest.
Indeed, at its annual general meeting to be held today shareholders will hear that the fund currently has more than $30 million in liquid capital to invest in Manitoba businesses. But they will also hear that some of the companies in Crocus's portfolio have matured to the point that, according to the fund's mandate of owning companies for five to seven years, it is time to sell some of them.
"We are now systematically beginning the process of divesting those mature businesses and creating additional liquidity to make investments in our existing portfolio or in new portfolio companies," Crocus president and CEO Sherman Kreiner said in an interview yesterday.
Although there is plenty of consternation about the continuing bear market in equity markets around the world, Crocus officials believe the results from the latest RRSP sales season bucked the national trend. Whereas gross sales were down dramatically for labour-sponsored venture capital funds across the country, Crocus produced $29 million in gross sales, a 20-per-cent increase over the previous year and net sales, taking into account redemption and reinvestments, of close to $10 million.
In addition to that new $10 million, the other $20 million-plus in new liquid capital comes from new institutional investors as well as divestitures that have already started, like the sale of Inner-Tec Securities announced this week that netted Crocus $7.25 million from a $2.75 million investment.
"Much more time and resources will be spent on divestiture work than was the case before," Kreiner said. "And it is a challenging thing to do in a down market. It is a buyer's market, not a seller's market. So the challenge is to not look for financial buyers, who need to buy at a discount, but strategic buyers who can pay premiums."
James Umlah, the fund's chief investment officer, said that leg work is being done to identify sectors that would be in the process of consolidation, like, for instance, the security business, which led to the sale of Inner-Tec.
"There are a number of others that are being worked on," Umlah said.
The $10-million worth of Institutional investment came last December from Fonds de solidarité des travailleurs du Québec (F.T.Q.). Both Umlah and Kreiner were adamant the investment from the large Quebec labour-sponsored venture capital fund was a significant strategic investment for Crocus that they also believe will become a long-term investment. However, critics have raised an eyebrow or two at the rich 10-per-cent rate of return Crocus has promised the Fonds and an even higher rate of payment that might occur if the shares are not redeemed after 18 months.
Kreiner noted the 10-per-cent floor was a way to compensate the institutional investor for not being able to take advantage of the tax credits that Crocus's common shareowners enjoy. Umlah added there are always features built into all deals to provide a way out if one of the parties decided things are not working out.
"We have always acknowledged that these deals cut both ways," Umlah said.
Crocus may have more liquid capital available to invest than ever before, but its per unit net asset value continues to go down. This week it was at $12.25, a 5.75-per-cent decline from last year at this time.
Jane Hawkins, Crocus's chief financial officer, noted labour-sponsored investment funds have declined on average by about 10.6 per cent over the course of the last year and the BMO Nesbitt Burns Small Cap Index declined by 17.6 per cent.
In addition to its systematic divestiture, efforts are continuing by Crocus officials to attract third party funds to Manitoba. Kreiner said Crocus is building the infrastructure to manage third party funds, but he said the process is crucial both for the development of the pool of venture capital in Manitoba and also as a way for Crocus to divest some of its current portfolio and ensure purchasers would continue operating the businesses in Manitoba.
martin.cash@freepress.mb.ca
SLMsoft seeking bankruptcy protection
Friday, May 23rd, 2003 WFP
FINANCIAL software maker SLMsoft Inc. is seeking bankruptcy court protection in hopes of giving the small Toronto company time to restructure and stave off creditors.
SLM announced Wednesday it is seeking protection under the Companies' Creditors Arrangement Act after it failed to appease one particular creditor, Insight Venture Associates III, LLC, a New York-based firm that provides money to small firms looking to grow revenues.
"The company has been engaged in productive negotiations with a number of its major creditors, which, for the most part, have been successful. Negotiations with Insight have stalled," SLM said in a release.
SLM said Insight Venture had filed a petition for bankruptcy against it.
"Should SLM receive CCAA protection, SLM will have the opportunity to regulate its affairs and maintain uninterrupted service to its customers," the company said. SLM has had a large presence in Winnipeg in the past. Although its Web site indicates the company has an office in Winnipeg, it has been closed for some time.
SLM acquired controlling interest in Infocorp Computer Solutions in 1998 and also bought another Winnipeg software company, Rescom Ventures, that year. At that time SLM had three different offices in Winnipeg. Infocorp still operates as a stand-alone company although much of its activity has relocated to Toronto.
Sizable stake
Crocus Investment Fund has shown a sizable stake in SLM on its books for some time. Its investment in SLM comes from the Manitoba labour-sponsored venture capital fund's initial investment in Infocorp, which was subsequently rolled into SLM shares. SLM recruited Mal Anderson, then CEO of Credit Union Central of Manitoba, to run its Manitoba operations. Anderson is now president and CEO of Winnipeg-based Rice Financial Group.
Crocus' chief investment officer James Umlah said SLM's poor stock performance during the last couple of years has meant Crocus has already effectively written off the investment.
But as of Sept. 30, 2002, Crocus's consolidated statements of investment portfolio lists the value of its stake in SLM at $8.6 million. However, Umlah said it does not mean Crocus has actually invested that much capital. Its original stake in Infocorp was just more than $1 million and Umlah said Crocus has subsequently bought and sold SLM shares totalling millions of dollars. The value of Crocus units will not be impacted because the value of its SLM shares has been minimal for some time as SLM's shares have been trading under $1.00 for more than a year.
SLM said it has received undertakings of interim financing during the proposed restructuring period.
Founded in 1986, SLMsoft.com had a net loss of $218,000 on revenue of $7.3 million in its most recent reported quarter, selling its electronic payment systems and transaction processing software to clients as far afield as Nepal, Ivory Coast and the United Arab Emirates.
Its Web site says the firm had 225 employees at the end of 2001.
SLMsoft Inc. gets court protection
Wednesday, May 28th, 2003 WFPress
TORONTO -- SLMsoft Inc. has been granted court protection from its creditors, allowing the small e-commerce systems provider to continue operating while it restructures its finances.
SLMsoft chief executive officer Govin Misir has committed to providing debtor-in-possession financing worth $1 million "to see the company through this process," the company announced yesterday after markets closed. The court also stayed a petition for bankruptcy filed by Insight Venture Associates III, LLC, a New York-based firm.
SLMsoft has not been able to file its audited comparative financial statements for the fiscal year ended Dec. 31, or the management analysis of its results as required under securities laws.
SLMsoft said yesterday it does not anticipate releasing audited financial information or its annual information form for 2002 until its corporate restructuring has been completed.
SLMsoft is a 17-year-old company that develops electronic payment systems and transaction processing systems, including e-commerce applications for the financial services industry. It had a net loss of $218,000 on revenue of $7.3 million in its most recent reported quarter, selling its electronic payment systems and transaction processing software to clients as far afield as Nepal, Ivory Coast and the United Arab Emirates. Its Web site says the firm had 225 employees at the end of 2001.
Investor demand prompts $7.6-M Medicure offering
Sat Jun 14 2003 By Martin Cash Free Press
MEDICURE Inc. announced that it will attempt to raise more than $7 million in a share offering that company officials say is in response to unsolicited interest expressed by institutional investors.
The Winnipeg cardiovascular drug discovery company released promising results from a phase II clinical trial earlier this year and more recently said it would embark on a phase II trial for a new compound to treat high blood pressure (hypertension) for a group that is currently not well served by medication now on the market.
"This share offering is particularly good for the company in that the institutions that expressed an interest and initiated this share offering because they wanted to buy bigger blocks of stock are senior institutions out of England and Switzerland," Medicure's chief executive officer, Albert Friesen, said in a telephone interview yesterday from London, England.
"They are the opinion leaders in their sector," Friesen added. "That's great for Medicure and, in addition, it means we'll have cash for the next two or three years."
The deal, subject to regulatory approval, could involve the sale of as much as 9 million shares at 85 cents per share for total proceeds of $7.65 million. It is to close on June 23.
The company has limited the offering to 25 per cent of the current number of shares, which according to regulations, means Medicure officials will not have to seek shareholder approval for the deal. "This will increase our cash position to $11 million and allow us to continue clinical trials on both MC-1 and MC-4232," said Derek Reimer, Medicure's chief financial officer, referring to the company's lead drug and its new hypertension compound. "We'll be able to push ahead on two products and have the financing in place for both of them."
On the size of the offering, Reimer said, "We feel this will not be overly dilutive and that it is a fair and reasonable volume."
With the release of phase II results earlier this year, Medicure's main compound, MC-1 has been shown to be of benefit to angioplasty patients and the company has another phase II trial planned on coronary artery bypass graft patients. If it is shown to be effective for that group of patients, it could mean that it will have a combined potential market of about one million patients per year in North America.
In a research report released earlier this week, Barbara Johnston, an analyst with Vancouver-based Haywood Securities wrote, "We are encouraged by the addition of MC-4232, a promising new compound to Medicure's pipeline. We continue to monitor the status of scheduled clinical trials and watch for suggestions of a possible corporate partnership for MC-1."
Johnston puts a 12-month target price of $1.40 on the stock.
In a report released the week before from Toronto-based Research Capital Inc. (one of the lead underwriters on the share offering), Andre Uddin, that firm's senior biotech analyst, put a 12-month target price on the stock of $2.95 "Hypertension represents a major medical problem due to its high incidence and strong association with morbidity and mortality," Uddin wrote. "We would expect the complete clinical development of the product to involved 1,500 to 2,000 patients and cost greater than $15 million."
Uddin also suggested that he is watching for developments in discussions with potential partners. Typically, a drug discovery company like Medicure eventually teams up with a larger company that has the infrastructure necessary to take care of the necessary details to get a pharmaceutical product to market and to market and distribute it.
Reimer said the decision to go out with a share offering now was a matter of striking when the iron was hot.
"We had to balance the timing of the offering," Reimer said. "We think the biotech market is heating up, but no one knows what will happen. This puts us in a position of strength when it comes to potential partners. We are able to create more significant value (prior to striking a strategic partnership).
Medicure's shares trade on the Toronto stock market and closed down four cents to 99 cents on trading of more than one million shares yesterday -- probably a single-day record trading volume for the stock.
Labour-sponsored funds get a bad rap
Thu Jun 12 2003 Martin Cash Free Press
A quote from an otherwise serious and intelligent money manager in a story that appeared in the Free Press some months ago has become a one-line joke in our corner of the newsroom.
In the midst of a market analysis discussion during the RRSP season, the money manager said something to the effect that when managing one's investment portfolio, the important thing to remember is "to sell at a premium."
Of course, that should go without saying, and it's undoubtedly the goal of every investor, financial adviser, portfolio or fund manager. But because it's such tricky business to accomplish, it has inspired countless different strategies.
The management of labour-sponsored venture capital funds (LSVCFs) is a case in point. The funds were originally put in place -- with a healthy tax credit as an incentive -- to provide much-needed investment capital in order to allow regional industries and economic activity to remain sustainable. However, it is a risky asset class for its retail investors, and as such, there are the possibilities of fantastic rewards and absolute catastrophes.
In Manitoba, investments in LSVCFs yield an immediate 30 per cent tax credit to the investor, in addition to an RRSP deduction. However, the principal must stay put for eight years and the funds typically require a longer-term horizon to achieve the kind of returns its managers are looking for.
A recent article by a couple of academics from Ryerson and York universities that is to appear in the fall edition of the Canadian Investment Review argues, among other things, that, notwithstanding the tax credit, LSVCFs underperform other similar types of investment pools. In the preface to the article, which was written by Ryerson's Scott Anderson and Yisong S. Tian of the Schulich School of Business at York University, the authors write that "these funds underperform other investment funds and market indices and... manager compensation is likely the main culprit behind the poor performance."
Needless to say, managers of Crocus Investment Fund and ENSIS Growth Fund -- the only two LSVCFs available to Manitoba investors -- take exception to the article's thesis. And with good reason.
Among other things, the authors complain about the overly complex and varying levels of fees and incentives paid to fund managers.
A lot of that contentiousness arises from arrangements some of the newer funds have made with third-party managers. They sometimes include bonuses that would get paid for the performance of certain assets, regardless of the performance of the entire portfolio.
But the portfolios of both Crocus and ENSIS are managed by their respective staffs and there is no external management. In the case of ENSIS, there is a separately structured management company -- made up of ENSIS staffers -- who are paid a fee of two per cent of the net asset value of the fund.
Crocus, which is one of the oldest of the 58 LSVCFs now in existence, is a rare venture capital organization in that it pays its managers a straight salary. The only bonus available is a very modest employee ownership program based on performance of the fund. At ENSIS, which has a more entrepreneurial structure to its management and ownership, its managers will receive a bonus of 20 per cent of any cumulative compounded return on investment the fund records which is over and above eight per cent.
ENSIS president Bill Watchorn pointed out the incentive would be based on realized gains and that the management bonus likely won't be paid until after the fund has been wound down, if it's paid at all.
Considering the continuing dismal state of affairs in the equity markets and the current uncertainties in the North American economy, neither ENSIS nor Crocus, nor any of the 58 LSVCFs, have achieved anywhere near an eight per cent cumulative return on investment.
Kirk Falconer, an official with Mary McDonald & Associates, a consulting company which has become the most authoritative independent voice on the Canadian venture capital business, said the authors' premise is flawed from the start when trying to compare the management of a LSVCF to that of a small-cap mutual fund.
Falconer points out that LSVCFs, unlike limited partnership venture capital funds, have a large administrative task in having to deal with its thousands of unitholders. Also, managing assets that are far less liquid than stock market assets requires a lot more resources than the stock picking function of a mutual fund manager, he adds.
The gravy train has not yet pulled in for LSVCF investors, nor has it arrived for the Manitoba managers of those funds.
Included in the March 31,2003 interim financials as now posted on the Crocus Website:
Crocus money in Inner Tec: $ 2,725,000
THE SALE OF INNER-TEC SECURITY CONSULTANTS FOR A FUTURE DIVESTITURE SUM OF $5 MILLION IN EQUITY AND DEBT. THIS TRANSACTION CLOSED AFTER MARCH 31, 2003
So was it for $10 M or $5 M and no cash received, but rather stock and debt?? Paper tiger shows potential of $2.275 M net, maybe, but no cash!
? ? ? ? ? ? ? ? ? ?
ANOTHER CROCUS INVESTMENT, WITH THREE PARTNERS ALSO CROCUS INVESTEES
Lawsuits over ritzy nightclub avoided
Tuesday, July 15th, 2003 By Aldo Santin Free Press
A group of prominent businessmen has settled a legal dispute that would have provided a glimpse into the conflicts that led to the demise of the Mezzo, touted as the city's "most high-end nightclub."
Bryan Fenske, the founder of the tony Exchange District club, who abruptly left last August, said yesterday that he was dropping his lawsuits against his former partners.
Fenske, who was seeking more than $43,000 for unpaid wages, said he settled the dispute following a series of telephone conversations over the weekend with CanWest Global's David Asper, one of the ex-partners.
"We've got it behind us," Fenske said, adding he would not disclose details of the settlement.
Documents filed at court revealed that Fenske was suing his ex-partners, which included Asper, WOW Hospitality's Doug Stephen and Westsun International's Marc Raymond, for wrongful termination and back wages.
Then they, along with the limited partnership, were suing Fenske, blaming him for losing their investment and damaging their reputations. None of the allegations had been proved in court.
Three years ago, 13 people pooled $2.5 million to finance the "most high-end" nightclub and restaurant Winnipeg had ever seen -- Mezzo, a glitzy club that catered to mature business people. It boasted a strict dress code, private membership and an exclusive entrance.
Mezzo opened in May 2001 at the corner of Princess Street and Bannatyne Avenue, at the site of the former Old Spaghetti Factory restaurant. It lasted 16 months before mounting losses last August prompted the managing partners to terminate Fenske, rename the operation and tone down the 'high-end' dress code, along with the pricey club memberships.
Fenske turned around and sued the limited partnership in mid-October, which a month later sued Fenske, prompting Fenske to sue three of his ex-partners: Asper, Stephen and Raymond. Some of the other investors included Charlie Spiring, president of local brokerage Wellington West Capital, and chartered accountant Gordon Falkenberg.
The 13 investors had formed a limited partnership, Mezzo Limited Partnership, and then set up Mezzo Incorporated as the general partner to oversee the club operations. Fenske was appointed as president of Mezzo Inc., and Raymond and Stephen were the other directors. Asper was promoted to general partner following Fenske's departure.
The lawsuit involves the general partners' decision to terminate a side contract they had with Fenske that had made him the club's general manager, responsible for the design and construction of the club and then its day-to-day operations. According to court documents, Fenske was being paid $6,250 a month.
Minds Eye Entertainment Returning to Core Business of Film and Television Production
Tuesday, Jul 29, 2003
The Board of Directors of Minds Eye Entertainment has approved a financial restructuring process that includes the company having voluntarily applying for protection under the Companies' Creditors arrangement Act (CCAA) in the Court of Queen's Bench in Saskatchewan.
The financial challenges facing the company have been ongoing for several months and are already reflected in the Fund's share price. Crocus will continue to work diligently with the company to maximize value for our shareholders and to achieve the most beneficial outcome for the other partners including Manitoba's Buffalo Gals Pictures among others.
The details of the decision are outlined in the news release below issued by Minds Eye Entertainment on July 29, 2003.
July 29, 2003 (Regina, SK) Minds Eye Entertainment (formerly Minds Eye Pictures), is continuing its plans for restructuring, including voluntarily applying for protection under the Companies' Creditors Arrangement Act (CCAA) in the Court of Queen's Bench for Saskatchewan. This move is consistent with the Company's strategy to return to its core business of film and television production and international distribution.
"We are taking these steps to restructure and secure our business during a tumultuous time in the international film and television industry," says Minds Eye Entertainment C.E.O and President Kevin DeWalt. "Today's efforts will place Minds Eye in a position to create a viable proposal to our creditors, provide value to our investors and to become a leaner, stronger company going forward. We have refocused on building our head office operations and will continue to develop our library for the international market place."
Critical to this process is the ongoing financial support provided by one of the company's key shareholders, CIC (Crown Investments Corporation) industrial interests. This support will ensure that the company is able to operate on a "business as usual" basis throughout the restructuring process.
Minds Eye Entertainment's financial and operational restructuring is in response to a substantial reduction in advertising revenue world wide since September 11, 2001; the poor economic climate for exporting television programming internationally; the currency losses experienced as all international business is carried out in U.S. dollars; recent cutbacks in Canadian television funding; and the general slowdown in the Canadian and world economy which was compounded by the recent war in Iraq.
"The combination of these events has created a "perfect storm" for the international film and television industry," says Kevin DeWalt. "Once this storm has passed, and I believe it is passing, Minds Eye will be extremely well positioned to return to profitability and deliver growth to our shareholders."
After 17 years in the film and television industry and successfully producing over 40 television series, feature films and documentaries, Minds Eye Entertainment will continue to actively develop new projects for the Canadian and international marketplace, including: a television movie chronicling the rise to fame by Olympic gold medallists Jamie Sale and David Pelletier for CTV; Creepshow, an animated tween series based on the novel by Stephen King for YTV; Crude, a one hour drama series for A-Channel/Craig Media; Damon, a one hour supernatural drama series for City TV/Space and The Englishman's Boy, a feature film based on the Governor General Award winning novel by Guy Vanderhaeghe.
Established in 1986, Minds Eye Entertainment (formerly Minds Eye Pictures) is currently completing post production on the feature film Whitecoats with Dave Thomas; season one of the legal drama series Just Cause (W Network, PAX TV); Falling Angels with Miranda Richardson and the feature film Seven Times Lucky staring Kevin Pollak. The Company website is www.mindseyepictures.com.
Get out of red or fade to black
Local film production companies face obstacles in a tough business
Sat Aug 23 2003 By Martin Cash
PHYLLIS Laing is determined the show will go on.
The veteran film industry professional who founded Buffalo Gal Pictures nine years ago is working to restructure the Winnipeg-based company that was dealt a severe financial body blow when Minds Eye Entertainment of Regina sought bankruptcy protection last month.
In a deal struck last year, Minds Eye bought 49 per cent interest in Buffalo Gal. Minds Eye's bankruptcy protection proceedings do not prevent Buffalo Gal from restructuring and carrying on, so Laing is now in the process of organizing financing to buy out the Regina company's share of her company.
"It is going to take some time to get through this," she said matter-of-factly rather than in a tone of defeat in a recent interview.
Once a bustling hive of activity, staff at Buffalo Gal's Exchange District office has dropped to Laing and two others, compared to a compliment of 14 at its peak. The company will be able to continue to operate partly because its major undertaking right now is post-production work on Guy Maddin's The Saddest Music in the World and another movie called Seven Times Lucky with Kevin Pollack.
Minds Eye's problems -- it owed creditors about $30 million when it sought bankruptcy protection -- also mean the third season of the teen sci-fi series, 2030CE, a co-production between Minds Eye and Buffalo Gal, will not happen, leaving Laing to hustle to find work along with new financing. Minds Eye's problems seem to be a prime example of the volatility, funding uncertainties and tricky economics that have beset companies producing new Canadian drama for some time.
"If one card falls out of place, the whole house collapses," Laing conceded.
Crocus Investment Fund might very well be feeling the effects of such a scenario. Crocus made a $3-million investment in Minds Eye in 2001 and subsequently loaned the company another $500,000. Crocus has also invested in and loaned the Prairie Production Centre a little more than $500,000. The PPC is the soundstage where the last season of 2030CE was shot and which productions like Shall We Dance invariably use in addition to exterior location sets.
James Umlah, Crocus' chief investment officer, was reluctant to say much about Minds Eye during a recent interview because the company's immediate financial future is being dealt with by a Saskatchewan court.
In addition to the Minds Eye investment, which Crocus officials do not believe is entirely lost, the Manitoba labour-sponsored investment fund has written off more than $20 million it invested in Westsun International, the erstwhile supplier of sound and lighting equipment to the live theatre industry.
It also invested about $1 million in another production company called Blye Brothers and $290,000 in Mid Canada Production Services Ltd., a Winnipeg post-production service-oriented firm, that is by all accounts thriving and growing. "First and foremost we made these investments because we thought we could make money in them," Umlah stressed. However Crocus also has a mandate to do economic development and its film industry investments, even in companies based outside Winnipeg, were at least partially with an eye to develop the domestic industry.
"If the Prairie Production Centre wasn't built, we wouldn't have Shall We Dance being filmed in Winnipeg," he said referring to the $55-million US production now being shot in Winnipeg. "But there is no doubt that this is as complicated an industry as I have ever assessed."
As complicated as it may be, it is still seen as a growth industry in Manitoba. Four years ago the television and movie production business spent about $17.5 million in Winnipeg. This year it is expected to top $100 million.
While much of that comes from Hollywood producers taking advantage of tax credits and lower production costs in Canada, the domestic industry in Manitoba continues to be surprisingly strong.
In an effort to ensure that there will continue to be a domestic production industry here, the Manitoba Motion Picture Industry Association (MMPIA) is about to launch a corporate strategic planning program to help young companies better prepare themselves to survive in the commercial marketplace.
Jamie Brown, CEO of Frantic Films, said his company has benefited from a diversified revenue stream.
In addition to features like Zaida, Frantic produces reality series like Quest for the Bay and its computer generated imagery work was the company's mainstay for some time and its meal ticket to major studio films.
But Brown, a lawyer by training, is not too cocky to think that Canadian producers don't need to have some luck on their side. "When I heard about Minds Eye I was thinking to myself, 'There but by the grace of God go I,' " he said recently.
martin.cash@freepress.mb.ca
Canada NewsWire
Asham creates curling apparel line with Mondetta Clothing
Tuesday, August 26, 2003
Asham Curling Supplies of Winnipeg today announced that they have produced and will market a line of curling apparel, available to customers this fall. Asham has partnered with Canadian clothing designer and manufacturer Mondetta, to produce the line of shirts and jackets.
"We have determined a need in the marketplace to provide players with stylish, comfortable and technical fabrics for curling", stated Asham Curling Founder, Arnold Asham. "The genesis of curling as an Olympic Sport, along with the World Curling Tour has created a new breed of athletes, that demand more from their competition apparel. We sought out a supplier that could deliver both styling and function, and the added benefit of Mondetta being in Winnipeg has allowed us to work closely together on the apparel line".
The Asham Curling/Mondetta Performance Gear line will be available through Asham and many of their retail partners throughout Canada. It is expected that many of the top competitive curling teams in Canada and throughout the World will wear the curling specific garments, including Canadian, World, and current World Curling Tour Champion, the Jeff Stoughton foursome.
"This partnership allowed us to bring our expertise in fabrics, styling and fabrication to a specific sporting opportunity", said Mondetta Clothing Founder and President, Ash Modha. "The group at Asham Curling challenged us, and we responded with the Mondetta Performance Gear product. We see great opportunity and growth in the curling marketplace today and going forward, and we are pleased to be working with a partner such as Asham Curling".
Asham Curling Supplies is a Canadian Company based in Winnipeg that has been producing top quality curling supplies since 1978. Asham shoes and curling equipment is used throughout the World, and is the equipment of choice for many World and Olympic Championship teams.
Mondetta is a Canadian company that has produced high quality garments and accessories since its inception in 1986. Mondetta has employees throughout Canada, and maintains offices in Winnipeg, Canada and Kowloon, Hong Kong. Mondetta continues to produce high quality merchandise for Retailers, Blue-Chip Corporations and Professional Sports Franchises. (A Crocus Fund Investee Co.)
Effective on Friday, September 24, 2004, Crocus Investment Fund set its year-end share price at $10.61, a decline of $1.10 per share. The adjustment is primarily associated with ongoing information technology positions Crocus took in the late 90’s where performance expectations have not materialized. The optimism in the sector last year has not been sustained.
WINNIPEG-based Medicure Inc. has raised $25 million US from a half dozen American and European institutional investors to fund the completion of field trials for two promising heart drugs.
Albert Friesen, the company's president and CEO, said yesterday the sale of about 16 million common shares, at $1.60 US a share, to the "highly regarded" investors will boost Medicure's profile and credibility with large investors throughout the world.
He said in an interview it will also give the company more bargaining power as it negotiates a partnership deal with a pharmaceutical giant to market the drugs, the first of which could be ready for sale by the end of 2008.
"We're very pleased with the development," Friesen said of the share sale, which will likely be approved by the Toronto Stock Exchange and the New York-based American Stock Exchange this week.
The shares are expected to begin trading on the Amex in the next 30 to 45 days. There is a four-month hold before trading of the new common shares will begin on the TSX.
"The last 12 months have been very positive (for Medicure)," Friesen said. "And we expect, based on what we've seen happen the last few months, that the next 12 months are also going to be very exciting."
In the next several months, Medicure will add 25 positions at its Fort Garry headquarters to manage the final phase of field trials for its MC-1 and MC-4232 drugs, Friesen said.
Last month, the company announced it had received fast-track approval from the U.S. government for MC-1, which promises to significantly reduce the death rate in heart-bypass surgery patients.
The final field trials for the drug -- whose potential annual sales are in the hundreds of millions of dollars -- will begin later this year, Friesen said. The tests will include patients from 150 sites throughout Europe and North America.
Final field trials for MC-4232, which will be taken by patients who suffer from both hypertension and diabetes, will likely begin early next year, Friesen said.
Deutsche Bank Securities Inc. acted as the lead placement agent in the sale of the shares.
Medicure hasn't yet disclosed the names of the new investors.
Medicure (TSX:MPH), a cardiovascular drug discovery and development company, closed up 11 cents at $1.96 a share on a volume of 369,900 yesterday. In recent months, it's traded for as much as $2.37 a share. .
