DALLAS, TX -- September 12, 2022 -- ProStar Holdings Inc. (TSXV:MAPS): Stonegate Capital Partners updates coverage on ProStar Holdings Inc. (TSXV:MAPS). The full report can be accessed by clicking on the following link: https://stonegateinc.com/reports/MAPPF_Q2F22.pdf
ProStar® Holdings Inc is a digital mapping company that offers survey grade measurements in the field on a mobile phone/device. The Company enables Fortune 500 companies in construction, utilities, railways, engineering, and surveying firms to map out their underground (and above ground) assets with the goal of eliminating utility strikes (i.e. avoiding accidental damage to underground utility assets). The flagship product is PointMan®, a patented cloud and mobile data management system that saves customers costs, increases productivity, and leaves them with an asset: a survey grade digital map of assets below surface. Prostar is headquartered in Grand Junction, CO.
- Patented mapping software - The Company’s precision mapping solutions deliver the underground location with 1 cm accuracy of critical utility and infrastructure data. This prevents damage to critical underground infrastructure from accidental damage during construction and maintenance. The technology enables up to 1 cm accuracy and is seamlessly integrated with receivers and pipe locators including Trimble, 3M, Juniper, Bad Elf, Emlid, RadioDetection, and Vivax.
- Robust intellectual property rights portfolio - The Company has built a solid patent portfolio with 21 patents issued so far in the U.S and Canada that cover system and method for integration, methods of collection, and calculation of geographical data, utility assets, digital identification, capture, mapping, and visualization of underground utilities on a mobile device.
- Significant market opportunity - The passing of the $1.2 trillion Infrastructure Investment and Jobs Act is likely to provide an impetus for growth in the construction industry. Per the September 2019 DIRT report, nearly 500,000 accidental strikes on critical sub-surface infrastructure like fiber optic cables cost the economy over $61 billion in damages and repairs. ProStar® is positioned to capitalize on opportunities in the construction, oil and gas, and with regulators.
- Growing customer base - ProStar®’s marquee customers include Colorado Department of Transportation, which mandated the use of ProStar®’s™ PointMan® software effective January 14, 2021. Prominent customers include Kiewit, T2, Water Works, Landmark, Utility Mapping, Kokosing, KCI, Scout Energy and numerous others with more to come as the company’s sales force matures.
- Regulatory Environment - The American Society of Civil Engineers published ASCE 38-22 which effectively says that surveyed paint marks are no longer acceptable as survey grade data. This paper was worked on for 3 years before being published a month ago and it outlines the guidelines for legislators to adopt with the goal of minimizing utility strikes to zero over the coming years. PointMan gives survey grade measurements in the field on a mobile phone. This drastically cuts down costs, increases productivity and eliminates waste. It is only a matter of time before local, state, and federal legislatures enact legislation similar to Colorado that mandates survey grade measurements on a digital platform.
- What’s next? Expect another state DOT to sign up in the next 12 months, significant expansion of the customer base, and more visibility of the product as Pointman gets adopted as the solution to map out infrastructure.
- Valuation – We use a comparative analysis to frame valuation. Using an EV/Sales range of 2.0x to 4.0x with a midpoint of 3.0x, on the Company’s F24 revenue projection, we arrive at our valuation range of US$0.25 to US$0.45 with a mid-point of US$0.35
Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high-quality investment opportunities.