As the Management Information Circular and Proxies for Sparta Capital Ltd. (SCAXF) (SAY.V) have been posted and are being mailed to shareholders, they may have noticed that my name is on the slate of proposed directors. Assuming I get voted in on May 21, any comment specifically about the stock would be a conflict of interest going forward from that date. So I figured that I would make a (likely) final post on Sparta to expand on my thoughts about this move and penny stock investing in general. Obviously I wouldn't make this move if I wasn't optimistic about the future of the company, so that's all I really need to say past May 21. Sparta is the first company that my name is connected to in my plans, but it certainly won't be the last.
This post is going to be divided into three sections. First, some comments about how I recommend people go about investing in penny stocks. Second, my thoughts about this as a general career move. Third, my thoughts specifically to Sparta in relation to these first two.
If you're investing in penny stocks, be prepared to become an activist investor.
I'll preface this section by linking to my Tipranks profile. For those who don't know, Tipranks is a site that ranks the performance of stock market talking heads. From those who write on Seeking Alpha like myself to professional analysts working at Wall Street firms. The site doesn't capture the calls of all of my articles, but it captures a large enough percentage that I can say that it's reasonably representative of my past performance. With my accuracy being slightly better than a coin flip, it's enough to put me around the top 10% of all so-called Wall Street experts. That should tell you how wrong these experts can be. I used to be in the top 5% as recently as a couple of months ago. But this forever mega-bull run has caused me to drop in ranking while my stats stay about the same as other people pass me. Keep in mind my historical calls are about 2-to-1 long to short, which doesn't stack up well to talking heads who broadly paint every call they make with a bullish brush when the S&P surpasses 7,000 at the same time oil touches $100.
I began this section with a defence of my track record to provide context. While I have done alright on the U.S. side, my stock picking history in the Canadian small cap space is littered with failures. Penny stock investing is not a percentage game. One Abaxx should offset five or ten losers. One PKK - when you sell it at the right time instead of diamond hands-ing it forever - should offset a lifetime of losers. But some people don't seem to get that and whine and complain at every loss. Or banish the asset class forever. As if there aren't enough Enrons or Nortels or GMs or Blockbusters to go around in large cap spaces.
When you buy a penny stock, you need to have a mindset of an activist investor. It would be beneficial to always have this mindset with any stock, but particularly for small caps. You need to be prepared to go as far as I have gone with Sparta. Popular sayings like "if you want something done right, you have to do it yourself" and "put your money where your mouth is" apply here. I complained about Sparta's behaviour in the past. Now it's my chance to personally play a role in rectifying some of the issues I see with the company and helping to improve its image to the investing community. All too often I see people complain about shorts and manipulators when they buy a stock and it doesn't go up then complain about pump and dumpers having given them bad advice after they sell at a loss. Anything to avoid taking responsibility for their own decisions and lack of action.
When I write up a stock, I make it a point to do significant research, talk extensively with management and articulate a coherent and fair thesis. I make my best effort, but if management doesn't execute on its stated plans, then *I* look like a goof. No more. This is my strategy going forward. If a company wants my support as a long-term investor (not just a swing trade), I will only do so if I think I can personally improve the business or impact management decisions in some way.
This move also helps me as an investor in small caps in general. Being involved with Sparta's Board and Executive team will pull back the curtain on how a small cap operates. That type of knowledge can only make me a better investor within the asset class going forward.
My value system and career goals
When it comes to my politics and value system, I feel that I am 75% shameless capitalist pig and 25% anti-elitist "eat the rich" type. While I find many members of the terminally online anti-billionaire, Bernie Sanders-worshipping, NDP-loving movement to be lazy and completely economically illiterate, they do have a point about some of the problems with wealth inequality. Canada is a country where a certain small membership of oligarchs, oligopolies and political class have been ordained by the government (usually slathered in Liberal red) to be the elite at the top. The solution to that isn't more socialism a.k.a. more central planning, even more government control and even more taxation of the economic class who don't have the power to stop or avoid it. It's more and better capitalism. I am very much in favour of SMEs and the "little guy" trying to make it in this world. That's why I gravitated towards the small cap space in the first place.
I see articles and statistics about Canada's declining productivity and entrepreneurship. Well, no wonder when the government has ordained certain businesses to control the economy. When barriers of entry are high, that destroys entrepreneurship. In turn, large companies have no incentive to innovate because they would rather play it safe and keep their already advantaged position. Canada's horrible policies around importing cheap "temporary" foreign labour in order to suppress wages have only hurt the country's long term productivity. For every "mom and pop" restaurant you hear whining about not having enough labour stuffed down our throats by CBC, you have a company like Visionstate - actually innovating something more interesting than recipes - having to compete against cheap custodial labour hired by the corporate real estate operators. If you remove the glut of cheap labour in Canada, you force companies to innovate (as well as pay better wages to actual Canadian citizens). You might lose some business in lower productivity industries like real estate and food service, but you gain much more in productive industries like technology.
I worked for Telus for eight years. It was a perfectly fine job working for a perfectly fine company and with perfectly fine people. I would say Telus is a typical large Canadian organization and there is nothing specifically bad about working there or representing it. But within that organization as well as with other people in my life, all I saw were people working like dogs and putting work over other aspects of life like health and family just to move up the corporate ladder. And for what? To make billionaire and millionaire shareholders 0.0001% richer? That's not me, that's not what I believed in or wanted to do.
I needed to find an organization that did something that I believed in and I could fast forward to the top. I want to be at the top of the capitalist food chain, even if it's in a small pond. Not a cog at the bottom. Get an executive role in an organization, participate in something real and successful, then leverage that success into a career at the top. But I needed to choose my leadoff hitter carefully. I needed to find a Rickey Henderson, not an Adam Dunn (go watch baseball if you don't understand my reference). I need a high percentage play just to get on-base. Thus, the next section...
Why I chose Sparta
Anything I say in this section is going to be career related, not stock related. However, I can't deny that these two things are going to be correlated. So use this information however you want but this isn't meant to be stock advice.
Reason #1: Sparta is profitable: Here is a snapshot of Sparta's income statements for fiscal 2025 (September year-end) and Q1 2026. From income from operations down to the EPS:
While Sparta has issues with the minority interest eating up the bulk or sometimes all of the profits, it's not like it's one of these companies that burns $5 million a quarter to generate $1 million in revenue. Sparta's operations actually have a lot of potential. The company just needs a few tweaks here and there to get it to the next stage. I think I can help with this.
Reason #2: Tony Peticca as President, "face" of the company and a key decision-maker : Being in the penny stock realm for as long as I have, I have met more than my fair share of executives who are emotionally volatile, lazy, arrogant and dumb know-it-alls. Tony is the complete opposite of that. He's pretty chill and a pleasure to work with. He knows his areas of expertise and will defer to the expertise of others when he needs to. He can collaborate with people but also lead. Frankly, Sparta is lucky to have this man, especially at a time when it needed someone to hold down the fort. He made a promise to a dying man in John O'Bireck to keep this company afloat and he did that. Now what Sparta needs is a set of motivated individuals with diverse backgrounds to help him get this company to the next level. I think the company is in the process of doing that, with me being one piece of it.
Reason #3: The remaining slate of directors: Assuming shareholders vote with management, Sparta will be increasing its Board from three to seven. In addition to me, the three other new individuals are Keith Whann, Philip Chen and Ralph Goldsilver. I encourage shareholders to read their bios in the Circular. My thoughts are as follows. Mr. Goldsilver is an experienced professional accountant and is exactly the person Sparta needs as part of its Audit Committee in order to help avoid the long periods of cease trade orders that have plagued the company. Mr. Whann has extensive legal and political experience and connections and is a capable tech entrepreneur. I have personally known Mr. Chen for many years and have my opinions on his ability as a deal-maker and business developer. But instead of getting into that, I refer to the line in his bio as a Director of Loncor Gold, which got purchased for $267 million a few months ago by a Chinese entity. He has a recently demonstrated history of getting deals done that are many multiples in excess of Sparta's current market cap. Working with this team in conjunction with Tony, I feel optimistic about Sparta going forward.
Reason #4: Sparta looks to solve government-related problems that will result in an undeniable benefit to society: Sparta was created from the vision of an optimistic dreamer in John O'Bireck to do good in the world. Most notably in health care and recycling. Two sectors that I see massive problems and opportunities with, particularly within Canadian society.
I see enough complaining online about the sad state of the Canadian health care system, namely the shortage of family doctors, with the blame being set at the feet of the complainer's least preferred politician. Six million Canadians being without a doctor isn't the blame or responsibility of any single politician. It is from the greed and lack of foresight from Canada's medical industry starting decades ago, and generations of politicians of all stripes being too lazy and cowardly to do the right thing and be anything other than enablers of these policies. The end result is a permanent structural shortage of health care personnel and a lack of health care access, particularly in rural areas. This shortage comes despite provincial governments spending more than ever on health care administrative bloat, and racking up debt levels to achieve it. The only way Canada is going to get out of this mess is through artificial intelligence, telehealth and other technologies that make the health care servicing process much more efficient and effective. Not by throwing more money at it. Sparta, with its Doc-in-a-Box initiative, is developing something that can potentially ease the strain on Canada's health care system and make money while doing so. Only time will tell if this or other Sparta Health initiatives gain traction. But I like the opportunity and the goodwill Sparta can generate should it be able to successfully execute on this line of business.
As for the recycling. Something like 90% of plastics in our society are not recycled. This is simply not environmentally sustainable. Most recycling programs are set up to give people a sense of ease, but are mainly just window dressing, especially for plastic. Sparta's operating division, ERS, is working on a solution called Neosort. The hope with this technology is that it will be able to correctly identify and sort plastics by their various chemical differences so that they can be sorted and recycled in an efficient manner. Hopefully this becomes a commercial success.
While Neosort and the health care initiatives are still in the start up or development phases, the e-recycling division has been in full force for years. I see enough investors fawning over the latest gold or silver exploration play. So much excitement generated by digging stuff out of the dirt. Well below is a video of Sparta creating gold nuggets literally from unwanted junk. And it's doing so today. No PEA or NI 43-101 needed. No millions spent on drilling. No tens of millions spent on building a mine. Just gold nuggets created in the ERS plant from electronic waste. I suspect that the increase in commodity prices have been at least part way responsible for Sparta's improved financial performance over the last year.
This video was taken years ago and featured John O'Bireck, who has since passed on. Most penny stock promo videos I see are with a CEO sitting all prim and proper and eloquently speaking the right words while being tossed softball questions. Here is one done by a real media outlet in CP24. It's awkward and John stumbles through his words in his lab jacket while the host interrupts him. That's what makes it real and honest. The contrast between this video and the heavily airbrushed and edited promo ones is a perfect analogy of the contrast between Sparta - a real company - and so many window-dressed companies that never add any value for their shareholders that litter Bay Street today. This is ultimately why I am betting on Sparta. This company is destined to do great things with the right people in place and I want to be a part of it.
Disclosure: I am long Sparta stock and I'm seeking to join the Board of Directors on May 21, 2026.
