Intro and why I joined Cap Circle (the uncensored version)
I try to be a man of my word. I have made promises to various people to provide updated thoughts on Sparta Capital Ltd. (SAY.V), Visionstate (VIS.V) and Tenet Fintech f/k/a Peak (PKK.V). Three stocks that I have invested in and talked about extensively. Now that the summer weather had wound down a bit, I finally had the chance to write something up.
Over the summer I joined a Bay Street startup called Cap Circle. Consider the intro part of this blog to be my uncensored version of that initial piece. Despite my 5-star rating on Tipranks which puts my primarily U.S-focused analysis on Seeking Alpha within the top 5% of all Wall Street talking heads out there, most of my Canadian penny stock picks generally fall in one of two categories. Failures, or successes for a little while before failing. I have to think that the extreme divergence between the two countries isn't some kind of accident. Canada is not built for small businesses and startups to succeed. The last Federal Election results show that the country only cares about two things. Protecting the assets of Boomers (and as a result, protecting the oligarchs and oligopolies) and protecting lazy bums, junkies and criminal thugs. The country doesn't care about the prosperity of young people. It doesn't care about entrepreneurs, young or old. It doesn't care about young, tech savvy people. It's perfectly fine with a brain drain of productive people and capital to the United States and elsewhere. As long as there are government handouts and easy money to be made in real estate.
Too many Canadians think "investing" is all about "guaranteed" real estate Ponzi schemes. The idea of "entrepreneurship" is setting up another Tim Horton's filled with foreign wage slaves instead of actually coming up with something new and adding productivity to the country. While I voted against the Federal Liberals for very good reason, I recognize that this goes across political lines. The biggest clown in the world and worst PM Canada will hopefully ever see Justin Trudeau tag teamed with Doug Ford as the Brothers of Destruction in my Province of Ontario, protecting the real estate feudal system, immigration grifts and diploma mills to the detriment of Canada's high trust society and once excellent immigration system.
While the country itself puts in every roadblock possible for economic prosperity outside of the handful of handpicked industries and elite insiders, one can't overlook the culpability of the management teams of small cap listings. There are four types of listings on the TSXV and CSE: 1. Scammers who have no intent of running a successful business 2. Incompetent dreamers who have every intent of running a successful business but no wherewithal to do so 3. Those who are competent and have a viable business model, but struggle in understanding the capital markets and other key areas which is stifling their success 4. Successful management teams and businesses that eventually graduate to a big boy exchange.
Despite all of the roadblocks and landmines small cap investors face in Canada, I still want to try to pull the boulder up the mountain and so do the founders of Cap Circle. I have known Danielle Fernandes for close to 10 years and I trust her to be the most capable out of anyone I have met on Bay Street. I have also known Rajesh Kutty for a few years and share much of his vision for what this organization can be. Basically we want to take all of those viable businesses that are caught with their wheels spinning in category 3 mentioned above and help lead them to success. I was recruited not just for my writing ability, but for my ability to sniff out and eviscerate companies that fit the first two categories. While the founders are primarily focused on high net worth individuals, I want to speak to a more retail crowd.
That retail crowd learned some tough lessons from the COVID hype days. Unfortunately, a lot of them learned the wrong lessons. If you lost your shirt on a small cap stock, the lesson isn't to abandon small cap investing and stick to ETFs. The answer is to become a better small cap investor. If you are a young person who is determined to stay in Canada, understand that everything is rigged against you. Let's say that you are a 30 year old with $50,000 saved up. What good does it do to put that money in a market ETF that makes you 10% a year if the average home in a Canadian city is $1 million and growing at 10% a year? You're spinning your wheels. Your only shot at success is if you somehow find a stock or crypto listing that gives you 10x or 20x or more of your money. I'm going to try my best as a member of Cap Circle and elsewhere to help find those type of investments. But understand that it is high risk and an imperfect science. 20 years into doing that and I am still honing my craft. I haven't had a job since 2014 so I'm good enough at this to remain solvent, but not quite good enough to hang with the billionaires.
I encourage everyone reading this - whether retail investors, high net worth investors or companies looking for Cap Circle or my services - to read everything, not just the parts you find relevant to you or most interesting. There are clues in here on how to be a better investor and how to avoid landmines throughout. Even if I'm still caught in a few landmines today. There are good lessons and warnings for management teams who want to engage with me as a writer and investor. If you screw me or damage my reputation, I will eviscerate and embarrass you, which I have to unfortunately do below.
Sparta reports profits for the third straight quarter
It's kind of sad that the company that I deem to be the BEST of the three right now is has been in a cease trade order for months. But that is the reality. My last blog called out Sparta management for its multiple failings. However, the ability to attain profitability isn't one of them. In the previous blog, I pointed out that while in the CTO, Sparta produced two net income positive quarters to the tune of $0.003 each. Q3 ended June 2025 produced more of the same with an impressive 116% increase in revenue from $1.9 million to $4.2 million over the previous year and a 37% increase from $3 million in revenue in Q2 2025.
This resulted in operating income of $367,000 and an EPS of $0.001. Less profitable than the previous quarters due to higher salaries, consulting and management fees. This could be indicative of a company hiring for growth so I am okay with these additional expenses if it means continued revenue growth.
These profitable quarters have worked wonders on Sparta's balance sheet. Compared to September 2024, working capital has improved from a $2.4 million deficit to +$200,000. Shareholder's equity has improved from -$1.8 million to +$600,000. That's not a turnaround I see very often in the small cap space, and when I do that is usually proceeded by a significant upwards re-rate in valuation. The only possible complaint I could have is that hopefully the company can convert that accounts receivable into cash in short order. I've encountered enough companies in my life that record bad "IOUs" then write them off later so I'm always weary of a growing A/R balance. But in Sparta's case, it can be explained by the heavy growth in revenue. The A/R turnover ratio is still pretty reasonable.
I am bullish on Sparta's business model and mission in the electronic recycling space, and I'm optimistic about its Neosort technology to enable the identification and proper sorting of plastics that will make plastic recycling more plausible. But ultimately the thesis is much simpler than that. Over the last nine months, Sparta has achieved a $0.008 EPS. Those type of earnings justify a $0.10 stock price, not $0.02.
I also trust President Tony Peticca to get the stock trading again and do right by shareholders once it is. I have mentioned my positive vibes on members of management teams of other investments before and have been wrong. However, those have generally been limited to Canadian niceties and slick CEOs knowing how to talk. If I ask Tony to be somewhere or do something, he actually shows up. When I explain Sparta's business to people, they like it not just from an investment perspective but from a moral one as well. They also like Tony. Sparta is a potential big winner. All it needs is a spark to get the market to notice. I will continue to support this company in any way I can to help make it happen. First thing that needs to happen is for the CTO to be lifted which should happen fairly soon.
Visionstate disappoints for the third straight quarter
I'll start the Visionstate section off by saying I have nothing against CEO John Putters. I believe he is genuinely a good person. He volunteers for Hockey Canada and other similar type of endeavours. Sol Spaces is his passion project to help fight homelessness, food scarcity and poverty while dealing with changing climate conditions in First Nations and elsewhere. With the clear intent to run it as a for-profit enterprise as well as solve a massive problem that suburban Canadians who are rich enough to play the stock market don't recognize as a problem in this country. The categorization of Sol Spaces as some kind of money siphon for his son by naysayers is totally uncalled for and inaccurate. He was also humble enough to surround himself with people like Shannon Moore, recognizing he needed help in the marketing and sales aspect of WANDA. And unlike certain other CEOs, he took a pay cut.
However, one thing he is, is stubborn. I have given up trying to go above and beyond and help this company succeed. Visionstate is going to do its own thing its own way, and we see the results in the financials and stock price in 2025. The last time I wrote about it, I felt that between the aggressive insider buying and improved financials that $0.05 was a reasonable floor on the stock price. Boy was I wrong, and that was driven by an income statement that has taken a baffling turn for the worse:
Revenue is down on the year, net losses are up and so is the share count. Almost all of the revenue for Q3 was the $60,000 per quarter fee collected from Bunzl. How can WANDA supposedly have a SAAS model and the product revenue be only $9,000 for the quarter? A SAAS business model is supposed to have revenue going up with time. The company owes shareholders an explanation over the particularly weak quarter, especially in light of all the supposed traction it's generating with customers and locations. The MD&A is not detailed enough in explaining what happened.
While writing up this draft, the company did send out an investor newsletter to its email list to explain that it waived fees leading up to Ontario's Bill 190. While I appreciate the explanation, this is the type of stuff that should be in the MD&A or financial press release. Not unofficially in a shareholder newsletter weeks after the financials were released. This unexplained drop in revenue resulted in a sell off down to $0.015, though later on you'll see why I'm not complaining about it. I'm also not completely buying the explanation. It would make sense to waive fees as some sort of introductory offer, but this looks like it was fees waived for everyone. Why waive fees for existing clients? Why waive fees for clients outside of Ontario?
Bill 190 mandates digital cleaning and inspection logs in publicly accessible washrooms beginning January 1, 2026. I believe that this is a big positive factor that should enhance the company's ability to generate revenue as well as improve its sentiment as it now has an easy story to tell the market. The company touted the move to waive fees as a success with 20 new subscriptions. It remains to be seen if the company can convert these new subscriptions into paying customers.
One roadblock to the company's ability to more aggressively price WANDA was the feedback from potential customers that would prefer to use labour because custodian employees are so cheap. If we are indeed entering an era where cheap immigrant labour is no longer in such plentiful supply, that attitude can change quickly and WANDA becomes a more attractive solution.
The company stated that it has a goal of being in 1,000 buildings by the end of the year with an annual subscription fee of $960. That would lead to $960,000 in annual revenue. If it did achieve these numbers, along with the Bunzl revenue, that should be enough to get it to breakeven. However, I have speculated on breakeven status and the company has talked about this as early as the end of 2023 and it still hasn't happened. So I am taking a wait and see approach before making any more statements on the timing of VIS achieving profitability.
Despite the disappointing share price, unlike Sparta where I am bagholding a bunch of shares purchased at higher prices, I have made some profits off of VIS. Due to the repeated private placements, I managed to sell shares on the open market and reload them in the private placements, collecting warrants in addition to profits. As of June 30, 2025, VIS has $300,000 in cash and working capital of $30,000. Based on the burn rate that I expect to be temporarily elevated given the strategy leading into 2026, I think that at least one more raise will be likely. The company tends to finance at $0.02. I have recently picked up some shares that were available on the ask at $0.015 and may continue to do so should the opportunity arise. But I won't go up to $0.02 until I am sure there is not another raise coming. I would rather participate in the raise than buy on the open market. Investors who don't or can't do private placements will have a different decision point, though I really recommend that those investors find ways to start investing in private placements rather than solely buying on the open market. Private placements are how you make the best money on TSXV and CSE listings.
Regarding the significant insider ownership of Monte Goble. I have spoken with him several times, though not recently. He has been very patient and supportive of Visionstate, though having spoken with him on other topics, I get the feeling that there will be a limit to his patience. His position is so ridiculously large that it is essentially a sunk cost. There is no way for him to exit at any price with VIS being in the current state that it is. It's a make or break type of play for him. The good news for other shareholders is that he likely funds any further capital needs until the company stops the cash burn, even if he is disappointed like I am at the slower-than-hoped timing to get to profitable operations. His alternative is to let the company run out of cash and watch the money he already threw at it go up in flames. As long as that path to success exists, I think he keeps VIS afloat. Right now he has been hands off. How long that lasts before he requests some additions or changes to the leadership? I don't know when or if that ever happens. I like VIS management but my first loyalty is to myself as a shareholder so I would support an activist shareholder movement. For now, let's see how the company's aggressive courting of clients by waiving fees impacts the business in early 2026.
One final point - I would like to make a shout out to an associate of mine named Robert Tjandra, who I introduced to Visionstate over a year ago to explore expansion opportunities in ASEAN countries, namely Indonesia. Unfortunately not every business deal works out and tough decisions have to be made when a company has limited resources. That part is totally understandable. But I didn't care for how he was strung along in the process. He's the COO of a company called Nusa Nickel along with two other men I have known for years, Brandon Colwell and Ryan Yanch. I have spoken with them recently about Robert and they were very impressed with his work in Indonesia. He was integral to getting Nusa Nickel up and running as a revenue generating entity so quickly after formation of the enterprise despite its minuscule valuation. I believe that VIS would have seen a similar outcome in the country had it decided to pursue a deal there. Indonesia is a lucrative market in many industries and it's being slept on by Canadians. Robert has demonstrated an ability to create revenue-generating operations there in a short time frame.
Tenet fails to file for the third straight quarter
I first discovered Tenet Finech, named Peak Positioning at the time, back in 2014. I immediately got along well with its CEO Johnson Joseph. I was 100% aligned with his goal of helping small businesses - first in China and then in North America - a big determining factor in why I got involved with Cap Circle today. At the time, his sheer positivity and determination were infectious, so I gave Peak a very long rope while trying to start up a viable business in China.
Wishing to be a supportive and activist investor, I wrote numerous blogs about the company and started a Facebook group for investors in the company to share knowledge. Had I known what a dumpster fire the group and eventually the company would become, I never would have created it. A few months ago, one suffering shareholder chimed in with thoughts about filing a class action suit. While I can understand the desire for it, I said it was going to be a big waste of time. Any lawsuit such as this is like squeezing blood from a turnip and you might get $50 out of the settlement. If you want to make your money back, the best way to do so is to focus your time and energy on finding companies you like and moving on from losses. The market is soulless. Being driven by human emotions like justice and revenge isn't going to pad your bank account.
After saying this, some people were complaining that I'm a promoter or JJ's friend trying to defend him. Understand this. I am not a promoter, and if I once might have considered him a friend, it's no longer the case. I'm a shareholder. A shareholder who has been lied to or disappointed by this management team more than anyone else except for maybe Mike Richardson and Cathy Hume. A promoter only tells you when to buy, never to sell. And I was the one saying to people that I sold most of my shares and suggesting for those who have profits to take some off the table back when it was trading around $10 while Discord promoters and clueless flippers were busy talking about it becoming the next Upstart.
Do I feel bad for my role in bringing PKK to the attention of retail investors? No. Frankly, because the vast majority of shareholders land in two categories:
1. Those who were legacy shareholders like me, who held on for years.
2. The COVID meme trader morons.
For those in the first group - you lived through 2016-17 when the company went from $0 to millions in revenue and back to near-zero again. You lived through JJ's 9-digit revenue targets that did not remotely come true after a period of success. You lived through "TD Seller" Jiang Wang selling with PKK management apparently being the last ones to figure out it was him. In 2021 you had a profit, some as much as 20 times your money. And you thought, nah, this won't happen again? I dumped 90% of my holding understanding that there was a chance that JJ's revenue targets could be bullshit even though I told him not to do that again after the debacle in 2017. And for 2019 and 2020 and part of 2021 it looked like he learned his lesson and was achieving the targets he laid out. The 10% of my shares I held onto was worth more than the value of my entire PKK holding two years prior. That's just sensible portfolio management. If you had a 20-bagger, all you had to do was sell 5% of your holding to be made whole and be playing with house money. Anyone who didn't sell in that position was just plain up greedy. That part is on them, not on JJ.
For the second group. These people did not want to learn the basics of investing and financial analysis. They literally rode the market like a casino. Any type of reasoning and analysis I tried to do was met with terms like FUDster or that I was just jealous I sold at $10 and the stock was $14. So I stopped commenting or limited my comments to basic financial analysis that talked about great revenue growth but to consider the low margins as a potential red flag. PKK just so happened to be the ticker on which these people lost their money. Had it not been that, it would have been something else stupid like MULN or AMC or NKLA. Then David Michery or Adam Aron or Trevor Milton would have been the subject of their scorn instead of Johnson Joseph. It was their destiny to lose their shirt.
Being a vocal and supportive shareholder, I built up a level of trust with the management team. That allowed me the opportunity to participate in a private equity round in Cubeler back in 2018 or 2019. My position as a Cubeler shareholder as well as a PKK one allowed me some insight into the opportunity beyond solely being a PKK shareholder. This is when JJ first introduced me to the Equity Insider concept that was going to make the company billions. I asked JJ if there was plans to roll up Cubeler into PKK, and he gave me a long and convincing explanation why it's better to keep it separate. Cubeler had a handful of shareholders while PKK had many. Keeping it as a separate public entity meant that early Cubeler shareholders reap the profits. PKK was the appetizer while Cubeler was the main course. He was talking like a guy who owned a complete product ready to go to market and quite confident about it. In fact, it was already portrayed as active, having a license fee attached to PKK's operations in China.
That's why I was against Cubeler being rolled into PKK at "only" a $100 million valuation. In retrospect, the fact that he changed his mind so easily should have been a sign. But I was already in house money mode on PKK, focusing my time researching other stocks. I made a nice return on my Cubeler shares so I wasn't really up for fighting the inevitable merger or thinking too much about it. The billion dollar opportunity had been absorbed into the larger company with the billion dollar market cap.
Fast forward to 2025 and Cubeler is still not a complete product. These so-called pillars are more UI based initiatives than powered by any sort of AI engine in the background. In my opinion, they have been a stalling technique. Like slapping a new coat of paint on a house with cracks in the foundation, then painting it again in a different colour. Plus a data scalping method to collect and aggregate the small business data. Back in 2019, Cubeler was a novel and prospective idea that I thought was going to take the market by storm once released. In 2025, not so much. The market has caught up with some other small business solutions. The only conclusion that I can come to knowing that six years later Cubeler is still not a finished product is that JJ lied to me. Whether he was lying out of being a malicious scammer or incompetent buffoon is the question. I lean strongly towards the second one. Someone who was utterly clueless over what they had and how close they were or how easy it would be to launch the Equity Insider business model. I have met face-to-face with JJ several times. I felt that he is a man who truly believed he was going to be interviewed on BNN next to the CEO of Shopify as the kings of Canadian fintech. Delusions of grandeur is ultimately what drives this man, not squeezing pennies from retail shareholders who are naive enough to believe in him.
As for the Chinese revenues, once again they did a disappearing act just like in 2017. But instead of a few million of Jiang Wang's dollars being used to build Gold River, PKK managed to make over $50 million disappear through write-offs of acquisitions, accounts/loans receivable and the money used to fund the low margin supply chain business. Some people consider PKK management to be scam artists. Just like with Cubeler, I don't think that is the case. There is a possibility that they got scammed by their great connections in China, and are "pivoting" to try to cover up the embarrassment. People talk about the AMF and other investigations. I can't rule out the possibility that these entities might also be looking at PKK management as victims rather than perpetrators. But the uncovering of such rope-a-dope news would be beyond embarrassing.
JJ's personality traits that I once found endearing are now annoying and toxic to me. I have compared him to Trump before. Most people don't agree, but I am convinced that he has the same type of narcissism that makes him never apologize when he is wrong, blame others (NASDAQ, slow SEC, Carol Penhale etc.) and drove PKK off the cliff just like Trump did with his various bankruptcies. When Trump came onto the political scene in 2016, the term "toxic positivity" came up a lot, and I think that describes JJ to a tee. It's defined as "excessive and often harmful belief or pressure to maintain a positive mindset and emotions at all times, even when facing difficult situations or negative feelings". I can't think of a better way to describe JJ's handling of PKK's situation since 2021.
Even if PKK somehow gets out of the mess with a viable business model, it's too late for many shareholders unless they throw more money at it and massively average down. He has treated shares certificates like toilet paper, diluting it to the extent that returning to $10 would be nearly impossible unless there was Shopify-like success. The final straw for me was seeing the last set of financials (about a year ago now) which showed hundreds of thousands of dollars being spent on "consultants", likely shares for services. And those shares were likely dumped on the open market. That was callous disrespect of retail shareholders who actually spent good money on shares purchased at higher prices, just to see the company give millions of shares to people who didn't really need them. Either directly or through the issuance of private placements at low prices then immediately spending the cash frivolously while at a low point for revenue.
I could go on for a lot longer, but I think my opinion would echo many others out there, and wouldn't be adding anything new to the conversation. So I will end with this. PKK has lost any serious investor or supporter it has had, myself included. The company used to have serious people backing it, like bookrunners at BMO. It used to have someone like me willing to put my real name behind it. I listened to these Discord town halls, where JJ enthusiastically named the hosts "Hoss" and "Sports". That's how embarrassingly pathetic it's gotten, where the only people willing to back this thing or talk positively about the stock have to hide behind their online monikers. It's like JJ is stuck in a fantasy world with these people and their made up names. Even the lowest of the low CSE listings try to find paid promoters out there who interview them with a host that is a real human being with a real name. He should be ashamed and apologetic to loyal shareholders, but if he is, he hasn't shown it. Startup business are risky by nature. But Peak has been a unique case. Bad decision after bad decision, unapologetically doubling down when cash resources are tight and nothing to show for it. Even if there is something to show for it, the stock has been so diluted that loyal long-term shareholders won't see much of a positive outcome anyways. PKK at one time was a crown jewel. Now it could be in the running as the worst CSE listing.
All that being said, should there come a time that I see value in the stock - if it ever trades again in Canada - I would consider buying shares at the right price. A case of the devil you know I guess. Just adding that in in case some fools try to say I'm trying to manipulate a stock that's been halted for several months and can't even be legally traded in my home country.
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