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CPE.H - Capital Pro-Egaux Inc.

Discussion in 'Canadian Stocks Message Boards' started by TheDude, Oct 24, 2016.

  1. TheDude

    TheDude Member

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    Capital Pro-Egaux Inc. Due Diligence Report

    Company Overview: Pro-Égaux and its wholly-owned subsidiary, Technique d’Usinage Sinlab Inc. (“Sinlab”), specialize in the licensing of titanium products for the dental implant prosthetics restoration market.

    Price: $0.20
    Common Shares: 4,195,077
    Insider Holdings: 1,636,309 (39% as per the last information circular filed this year)
    Options: 419,508 exercisable at $0.10

    Financials
    Note: Most liabilities mentioned are “deferred revenue” which is actually revenue received, but cannot be posted as income yet. See definition: http://www.accountingcoach.com/blog/deferred-revenue

    Assets
    Cash: $342,289
    Accounts Receivable: $28,839
    Advance to a shareholder: $18,000
    Prepaid Expenses: $1,564
    Intangible Assets: $42,553
    Total Assets: $433,245

    Liabilities
    Payables: $130,881
    Deferred revenue(current): $695,479
    Promissory Note: $670,747
    Deferred Revenue(non current):$231,826
    Total Liabilities: $1,728,933

    2017 Income Statement(6 Months)
    Revenue: $533,207
    Net Income: $266,998 or $0.064 earnings per share

    2016 Yearly Income Statement(Audited Annual)
    Revenue: $1,393,669
    Net Income: $706,595 or $0.17 earnings per shares

    2014 Yearly Income Statement(Audited Annual)
    Revenue: $747,677
    Net Income: $237,922 or $0.057 earnings per shares

    Capital Pro MD&A Highlights from most recent Quarter(ending August 31 2016)
    Note: The MD&A on Sedar is very long, this is a strictly highlights.

    During the first and second quarters of fiscal 2017, the Company main activities were related to the follow up of the malpractice lawsuit as described in the next section of this MD&A. Also the Company concentrates its effort on pursuing smaller but numerous potential counterfeiters in all countries where our various patents have been validated by the signed licenses.

    During the second quarter of fiscal 2017, the Company signed two new licence Agreements. On June 29th, 2016, the subsidiary of the Company, Sinlab entered into a Patent License Agreement with Cybermed Inc. (“Cybermed”). As part of the agreement, Sinlab granted Cybermed and all resellers and users of Cybermed products, a worldwide, irrevocable, non-exclusive, fully paid up, royalty free and transferable license to make, use, sell and offer to sell the inventions of the Guide Patent in the portfolio through Cybermed products and services. The terms and conditions of the Agreement are undisclosed for confidentiality reasons.

    Also on August 5th, 2016 the subsidiary of the Company, Sinlab signed a Patent License Agreement with James R. Glidewell Dental Ceramic Inc. (“Glidewell”). Under this agreement, Sinlab granted Glidewell and its affiliates and all resellers and users of Glidewell’s and its affiliates’ products and services worldwide irrevocable, non-exclusive, fully paid up, royalty free and transferable license to make, use, sell, offer to sell and import to United States the inventions of the Licensed Portfolio. The term of these licenses are for the life of the last expiring Patent in the Licensed Portfolio. The terms and conditions of the Agreement are undisclosed for confidentiality reasons. Many other potential agreements are still under discussion as of the date of this MD&A.

    As of the date of approval of this MD&A on October 21th, 2016 by the board of directors, the status of the various court actions for the protection of our patents has been summarized to reflect the final result of all of our past court actions ending with the yearly MD&A dated February 29th , 2016 and February 28th, 2015 respectively. Only the current activity is covered in the following Current Court Action section:

    Further to a Board of Directors’ resolution dated December 15th, 2013, the Company announced, on December 20th, 2013, that its wholly owned subsidiary, Sinlab, has filed an action for damages it believes are the result of professional malpractice of certain former legal counsels of Sinlab in connection with matters pertaining to the announced settlements involving Delcam USA, Inc. and Delcam Holdings, Inc., Cagenix, Inc., Dentsply International Inc. and the Nobel Entities, comprised of Nobel Biocare AB; Nobel Biocare Italiana S.r.l.; Nobel Biocare Holding AG; Nobel Biocare Deutschland GmbH; Nobel Biocare Canada, Inc.; Biocad Médical Inc.; Nobel Biocare USA, LLC; and Nobel Biocare Procera, LLC.

    As of the date of approval of this MD&A on October 21th, 2016, the above filed action, for damages we believes are the result of professional malpractice of certain former legal counsels of Sinlab, is proceeding as follows with very little activity in this quarter:
    · Initial exchange of discovery documents completed; document discovery ongoing;
    · Written discoveries still ongoing and to date, all request were answered by Sinlab Inc;
    · Discovery dispute concerning Nobel confidential information has been resolved in the first quarter of fiscal 2015;
    · Oral discovery (Deposition) started in February 2016 and most likely to complete by end of August/ September 2016;
    · Experts for most areas have been identified and expert discovery expected to be scheduled for hearing by Court Authorities in last quarter of 2016 or, most likely, in the first half of year 2017;
    · The court has placed the case in the complex litigation division;
    · Defendants Murphy & King and Smith Gambrel Russel have filed counterclaims for their fees from the underlying action plus interest. Defendant SGR served a “Rule 57.105" motion arguing that the case against it is baseless. If they are successful, Sinlab would be liable for their attorneys’ fees in this action from 30 days after the date of the service. For many reasons, Sinlab considers the defendant success on the motion to be unlikely, and their claims for fees unlikely to be successful.
    · Court Authorities will be placing our case on their schedule of court hearing sessions. It is expected to be sometime before the month of June 2017.
     
  2. TheDude

    TheDude Member

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    Capital Pro-Egaux licenses patents to nSequence et al.

    2017-01-10 09:21 MT - News Release

    Mr. Pierre Desormeau reports

    CAPITAL PRO-EGAUX INC. (NEX: CPE.H) ANNOUNCES THE CONCLUSION OF A LICENSE AGREEMENT WITH NSEQUENCE CENTER FOR ADVANCED DENTISTRY AND NATIONAL DENTEX CORPORATION

    Capital Pro-Egaux Inc.'s wholly owned subsidiary, Technique d'usinage Sinlab Inc., has entered into a patent licence agreement with nSequence Center for Advanced Dentistry and National Dentex Corp. As part of the agreement, Sinlab granted licensees a non-exclusive worldwide licence to make, use, sell and offer to sell inventions covered by its patents, including patents relating to its Technobar and Technoguide technologies, under terms undisclosed for confidentiality reasons.

    Unlicensed entities should obtain an appropriate licence from Sinlab by contacting M. Jean Kingsley via e-mail.

    The company previously announced settlement and/or licence agreements that include Biomet 3i LLC (formerly Implant Innovations Inc.), Delcam USA Inc. and Delcam Holdings Inc., Cagenix Inc., Dentsply International Inc., Nobel Biocare AB, Nobel Biocare Italiana SRL, Nobel Biocare Holding AG, Nobel Biocare Deutschland GmbH, Nobel Biocare Canada Inc., Biocad Medical Inc., Nobel Biocare USA LLC, Nobel Biocare Procera LLC, 3Shape A/S, exocad America Inc., MIS Implants Technologies Ltd., SICAT Gmbh & Co. KG, and James R. Glidewell Dental Ceramics Inc. The company is currently pursuing its licensing program with other industry participants. The company cannot predict the outcome of its continuing negotiations or of any legal proceedings it may decide to institute against those entities that fail or refuse to contract a licence. The decision to take legal proceedings will be based on available information and the company's assessment of all relevant facts and circumstances, including costs involved with such proceedings. Such costs are unpredictable and may be substantial.

    We seek Safe Harbor.

    © 2017 Canjex Publishing Ltd. All rights reserved.
     
  3. Epicram

    Epicram Member

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    The above report of this stock looks solid and capable to return good profit.
     
  4. loubastone

    loubastone New Member

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    It will all come down to legal, if they can win against all those companies that stole their patent...this can literally go from 10 cents to dollars over night.

    Low shares outstanding and all that cash if they win would be paid out to shareholders...I am in for 20k shares and will try to buy some more
     
  5. TheDude

    TheDude Member

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    Lawyers have been doing pro bono work for CPE since all these claims were launched back in 2013. They would not do that unless odds of winning were very high. So many companies to go after too, it's absolutely nuts. CPE is like the Wi-Lan of the dental patents, lol.

    2.4 million shares in retail hands too, there's really not much to get. So it would move in the blink of an eye. The fact that they are still forcing companies to pay them for their patent just show the validity of all this. Europe, USA, Canada, they have something real and no matter the size of the company, they all had to pay CPE.
     
  6. loubastone

    loubastone New Member

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    SUrpsied these companies just don't settle for less $ vs involving expensive lawyers
     
  7. TheDude

    TheDude Member

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    CPE isn't licensing deals to small companies, these are all larger companies.

    In the last 12 months, these companies have all signed licensing agreements:

    Jan 2016 - MIS Implants - This company was sold 6 months after the deal with CPE for $375 million to Dentsply Sirona
    April 2016 - Sicat GmbH & Co. KG - can't find revenue, but the company has over 100 employees
    August 2016 - Glidewell Dental Ceramics Inc. - $178 million revenue with around 1,900 employees
    January 2017 - National Dentex Corp - Can't find revenue, but it claims it has the largest network of dental labs http://www.nationaldentex.com/about-ndx/
     
  8. TheDude

    TheDude Member

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    It could end up that way. Settlement sooner than we think, I would be happy with that. But since the lawyers are doing this pro bono, it's really up to them if they think it's better to take the offer or go for the full thing.
     
  9. TheDude

    TheDude Member

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    Capital Pro-Egaux Inc. Quarterly Results

    Price: $0.10
    Common Shares: 4,195,077
    Insider Holdings: 1,636,309 (39% as per the last information circular filed this year)
    Options: 419,508 exercisable at $0.10

    Assets
    Cash: $319,939
    Accounts Receivable: $29,892
    Advance to shareholder: $18,000
    Prepaid Expenses: $2,082
    Intangible Assets: $34,574
    Total Assets: $404,487

    Liabilities
    Accounts Payable: $164,339
    Deferred Revenue: $695,479
    Current Portion Deferred Revenue: $57,956
    Promissory Note: $720,569
    Total Liabilities: $1,638,343

    Note: Deferred revenue will disappear over time. Lawsuit against various parties has commenced. See MD&A highlights below.

    Revenue after 9 months
    Licensing & Royalties: $723,846
    Net Income: $328,830 or $0.078

    MD&A Highlights

    As of the date of approval of this MD&A on January 25th, 2017, the above filed action, for damages we believes are the result of professional malpractice of certain former legal counsels of Sinlab, is proceeding as per the formal Scheduling Order issued by the Hon Judge Tuter on November 18th, 2016:

    · Expert disclosures by plaintiff of their opening experts to be completed by January, 10th , 2017.
    · Defendants shall disclose their experts by February 24th, 2017.
    · Expert deposition schedule shall take place between March 31st, 2017 and June 30th, 2017.
    · Discovery deadlines: Parties shall complete all fact discoveries by March 31st, 2017. All expert discoveries by June 30th, 2017.
    · Trial Witnesses: The parties shall disclose all “Trial Witnesses” (excluding experts) by August 31st, 2017.
    · Trial Exhibits: The parties shall disclose all exhibits to be used at trial by August, 31st , 2017 The remaining of the Scheduling Order will be posted in our Q 4 (February 2017) end of year Management report.

    During all quarters of fiscal 2017, the Company main activities were related to the follow up of the malpractice lawsuit as described in the next section of this MD&A. Also the Company concentrates its effort on pursuing smaller but numerous potential counterfeiters in all countries where our various patents have been validated by the signed licenses.

    The positive resolution with 3i, the agreements signed with many patent infringers may enable us to extend license to end of patent life thus, ensuring minimum revenues. Cash flow will be used for conducting litigations in relation with the Technobar patent against small other infringers and potentially generate an additional revenue stream to our shareholders.

    On December 15th, 2016, the subsidiary of the Company, Sinlab entered into a Patent License Agreement with Nsequence for Advance Dentistry (“Nsequence”) and National Dental Corporation (“National Dental”). As part of the agreement, Sinlab granted Nsequence and National Dental a worldwide, irrevocable, non-exclusive, fully paid up, royalty free and transferable license to make, use, sell and offer to sell the inventions of the Guide and Superstructure Patents in the portfolio through Licensee’s products and services that were offered commercially on or after the Effective Date. The terms and conditions of the Agreement are undisclosed for confidentiality reasons.

    Business Strategy

    Other than managing our malpractice action for damages we believe are the result of professional malpractice of certain former legal counsels of Sinlab, the company main focus and strategy, now that licenses have been signed with Nobel, Dentsply, Cagenix and many others, is to concentrate on pursuing the smaller but numerous potential counterfeiters in all countries where our various patents have been validated by the signed licenses.

    As of January 25th, 2017 the situation is as follows:

    · Patent and technology surveillance has demonstrated that, we believe, various companies have and are building their businesses along the same claim references of our patents;
    · Amicable letters, from our President, proposing licensing arrangements have been forwarded to various companies on August 16th, 2014 and, to date, we have received contact feed-back from 6 companies and discussions are in progress;
    · Follow up letters has been forwarded on August 26th, 2014 to the others to remind them that we have a history of respecting the intellectual property of others and a history for protection Sinlab’s intellectual property rights for the benefit of the shareholders of our public parent company, Capital Pro Égaux Inc.;
    · The Company has entered into licensing discussions with various players in Europe as well as America. Due to the confidential nature of the discussions, update of the discussions will be published once all negotiations are completed;
    · As reported in the “ Company Revenue stream” section, three additional licenses have been executed in the last 8 months
    · The Company expects to conclude a minimum of 2 additional licenses in its next 6 months

    The Company is actively looking for opportunities to conclude a business association that will create added value to our shareholders. Various business plans are being evaluated with the objective of executing a business agreement that will maximize our PUBLIC COMPANY value. Should the Company enter into such an agreement, a letter of intent will be duly signed and, a Press Release will be issued accordingly.
     

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