On August 26th Gatekeeper Systems Inc. (TSXV: GSI) announced their intentions to complete a non-brokered private placement of $5 million at a price of $1.00 per share with a full 2 year warrant at $1.10. The warrant will have an accelerator should the stock trade above $1.35 for 10 consecutive days.
The announcement was significant because it represented a 58.7% premium to the closing price that same day of 63c.
In the news release, the company stated they received unsolicited interest for the full raise. They intend to use the proceeds to fund growth initiatives and for general corporate purposes. In simple terms, who says ‘no’ to a financing at that kind of a premium?
Keeping School Buses Safe
Gatekeeper provides video solutions with the goal of creating a safer transportation environment for children, passengers, and public safety personnel on multiple transportation modes. The Company uses AI, video analytics and mobile data collectors to inter-connect public transit assets as part of intelligent transportation systems for Smart City initiatives.
The company offers a PaaS Solution (Platform-as-a-Service) for school buses which includes the following features:
- Video Analytics Software – records time, location, audio, and video, enabling quick and easy assembly of video evidence needed to deal with school bus problems such as bullying, grazing, vaping, or verbal abuse.
- Stop Arm Camera – records license plate information day or night, of vehicles that illegally pass a school bus when the stop arm is deployed. Gatekeeper’s optional proprietary software also automates the ticketing process of stop-arm infractions.
- 360° Camera – provides the driver with 360° real-time imaging, automatically activated at pre-programmed parameters. The 360° view is displayed within the vehicle’s specialized rear-view mirror system allowing drivers to monitor school children all around the bus.
- Interior Camera – records the video and audio activity on the bus interior using adjustable vandal-resistant cameras.
- Tactical Ready Kit – is a portable unit that allows law enforcement personnel to obtain quick and easy display of the internal video and audio of a school bus in close proximity, even while in motion.
This allows for easier law enforcement of violations surrounding school buses; keeping communities safer with technology.
A Microcap That Makes Money
The company, an anomaly in the Canadian junior markets, has managed to demonstrate profitability in the last 9 months. In the first three quarters of their fiscal year they have reached approximately $12.6M in top line sales with a gross margin of 43.5%, posting a comprehensive net income of $1.4M.
Now Offering Temperature Monitoring For School Buses
In August, the company announced their intelligent infrared body temperature sensor system which incorporates a smart panel, thermal imaging and artificial intelligence to quickly and accurately measure the body temperature of passengers who board school buses and public transportation vehicles. Three days later, the company announced their first order with a US school district to equip approximately 40 of their schools with the system.
More to Come with the COVID Solution?
The recent financing begs the questions, does the unsolicited group have an NDA with completed diligence giving them confidence the COVID solution is about to fly off the shelves? To do a financing at that kind of a premium is extremely rare. Clearly this group wants a larger position and doesn’t mind paying up for it. Time will tell. We met with management three years ago and at the time we thought Gatekeeper looked like another promote talking about ‘big data,’ ‘artificial intelligence,’ and ‘the internet of things.’ Chief Executive Officer Douglas Dyment has proven to be a great operator who has unlocked tremendous value for shareholders since that meeting.
Gatekeeper Systems last traded at 79c on the TSXV.
Information for this briefing was found via Sedar, Gatekeep Systems Inc, YCharts, and YouTube. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
SmallCapSteve started blogging in the Winter of 2009. During that time, he was able to spot many take over candidates and pick a variety of stocks that generated returns in excess of 200%. Today he consults with microcap companies helping them with capital markets strategy and focuses on industries including cannabis, tech, and junior mining.