Hello 2023! So long and good riddance to 2022. From a personal investment perspective, I’m more than happy to look at 2022 in the rear-view mirror. My year-end portfolio review was a sobering reminder of what I already knew, another lesson in humility that hopefully I will continue to learn from to become a better investor. Now it’s a time for renewal and the look ahead to what might be in store for us in the weeks and months to come. What investment themes will emerge that will help soften the blow of the damage done in 2022. A healthy share of fossil fuel exposure in the first half of last year would have gone a long way to mitigating the carnage inflicted by big tech and crypto. Uranium and lithium stocks also started out the year strong but seemed to lose momentum as the year came to a close. Everyone seems to think we’ll all be driving EV’s in short order, but the stock price of many of those companies have been crushed of late. Are these buy the dip opportunities or is the market coming to the realization that we might be a little early for some of these trades?

I’m not sure that I have any useful insights for you based on my 2022 portfolio performance, but over the next couple of weeks I will take a stab at a few themes that might start to gain traction as 2023 progresses. With that said, there are several enormous macro issues (China/Taiwan, Russia/Ukraine, resurgent Covid to name just a few) out there that could completely trash any ideas I have and put them far from the focus of investors. Nevertheless, we have to start somewhere, so today we’ll explore a broad theme of food security, sustainability and food waste reduction as inflation takes its toll on consumers world wide.

Food waste and spoilage statistics are quite alarming. According to the UN Environment Programme, about one-third of food produced globally for human consumption each year is lost or wasted. That is approximately 1.3 billion tonnes of edible food. Saving just a quarter of food lost or wasted globally each year would feed 870 million people. Not only does this result in financial losses but it also increases greenhouse gas emissions (another key theme and global focus). Are there ways to fix this? Yes. But similar to reducing our global carbon footprint it’s going to take time and a concerted effort. However, I would argue that there is a much greater economic incentive today to reduce food waste given everyone’s concern about food prices relative to opinions even as recent as a year ago.

One group at the forefront of trying to remedy this situation is TrustBIX Inc. (TSXV: TBIX | OTCQB: TBIXF). As an innovative leader, TrustBIX provides agri-food traceability and chain of custody value solutions. The Company’s goal is to create a world where we trust more, waste less and reward sustainable behaviour by addressing consumer and agri-food business demands. The proprietary platform, BIX (Business InfoXchange system), is designed to create trust without compromising privacy through innovative, blockchain-derived use of technology and data.

Source: TrustBIX Fact Sheet

The existing customer base includes hundreds of producers, auction markets, and feedlots. TrustBIX has a market presence in Canada, the USA, China, Mexico, and a healthy baseline of one-time and recurring revenue. Some notable customers include two of the largest beef companies in Canada, JBS Canada and Cargill, as well as household names such as McDonald’s and Loblaw’s (Real Canadian Superstore). Additionally, the Company will be presenting at this year’s CES (Consumer Electronic Show) in Las Vegas where they will be exposed to plenty of industry heavyweights. Even more exciting for the company is that they will be on a panel discussing “Cross-Industry Opportunities for Consumer Tech” along with John Sheehan, a Strategy and BD executive with Amazon Web Services’ Aerospace & Satellite group. That seems like someone worthwhile getting to know, especially for a Company with a market cap of only C$3 million.

Will TrustBIX be a good way to play the food security and waste prevention theme in 2023? Only time will tell. But I dare say that the food theme will at least start the year at or near the top of everyone’s list of concerns.

One of the biggest trends today is ESG investing. That is investors now demand companies operate in a sustainable way with a focus on Environment, Social, and Governance (ESG). Both customers and investors want to know the details of a company’s ESG practices. A key part of this is examining the supply chain.

Security of supply chains and traceability of products has become essential in today’s world. Look at the current sanctions on Russia and the need to trace products supply to be sure it is not coming from dictators, such as the Putin regime.

Today’s company is focused on supporting companies with the right tools to help meet their ESG obligations. Their initial focus has been on the agri-food industry but there is potential to expand across many other sectors.

TrustBIX Inc. (TSXV: TBIX | OTCQB: TBIXF) offers a blockchain based platform to trace food supply and reward sustainability. TrustBIX has two platforms – BIX which stands for ‘Business InfoXchange’, and the other platform is called ‘ViewTrak’. The Company has also recently acquired a company (Insight) that tracks and manages high-value agricultural and other equipment.

BIX – Traces food from farm ‘Gate to Plate®’ to ensure that the food is sustainably produced. The BIX platform has over 1,500 producers registered who track cattle as part of Strategic Sourcing through Cargill for McDonald’s Canada and other restaurants.

ViewTrak – Provides a suite of hardware and software solutions to the livestock industry in Canada, United States, Mexico and China. TrustBIX says that ViewTrak has an 80% and 30% share respectively in the Canadian and US Live Cattle Auction Market software automation space.

TrustBIX continues to work with Cargill and acquires Insight Global Technology Inc.

In February the Company announced an “innovation agreement” to continue working with Cargill in Canada. The agreement will see TrustBIX provide strategic advisory and technology innovation services. The report states: “This next phase of partnership will explore how to create more efficiencies in the delivery of the program to further advance Cargill’s commitments to sustainable sourcing of Canadian beef.”

In March TrustBIX announced the signing of Definitive Agreement to acquire 100% of Insight Global Technology Inc. (Insight) for up to 30,000,000 common shares of TrustBIX priced at $0.18 per share. The deal closed successfully as announced on March 7, 2022.

Insight is an early stage company providing solutions to track, protect and identify the movement of high value moveable equipment used in agriculture and other industries. This is quite the expansion for TrustBIX from their core area of food traceability.

TrustBIX CEO Hubert Lau stated: “I am very excited about the acquisition of Insight, which is a major milestone for TrustBIX. We are confident that the acquisition will help us expand our BIX platform, enhance our value in supply chains, and enable us to better serve our clients with a more diversified set of products and services. We believe Insight will assist us to drive growth and shareholder value in the months and years ahead.”

Insight is essentially an asset tracking platform that tracks, identifies, and reports a client’s assets with self-reporting asset trackers.

Insight is a system of record and visualization service for asset tracking and management

Source: Insight website

TrustBIX achieved record annual revenue in 2021

As reported on February 2022, TrustBIX posted first quarter revenue of $422,261 for the last 3 calendar months of 2021. That compares to all of 2021 revenue of C$2.17 million, which was up from C$1.63 million in 2021. You can view here for details on the recent capital raise.

Next steps

TrustBIX states their business strategy is to continue to expand organically and by acquisition. The Company also plans to combine the BIX technology and incentive solutions with Insight’s edge-to-enterprise supply chain solutions.

Alex Barendregt, founder of Insight, stated: “We are more than excited for this great opportunity to bring together our technology platforms to be deployed as a unified solution within TrustBIX. We look forward to closely working with the TrustBIX team in implementing this complimentary line of business.”

Closing remarks

TrustBIX is still relatively small but is growing both organically and via smart acquisitions. The Company now effectively has three platforms – BIX, ViewTrak and Insight. These can be combined to create an ever greater ESG package for companies to trace, track, and manage their supply chain and assets.

TrustBIX trades on a market cap of C$6.6 million. It is still early days for TrustBIX but so far management is doing everything right. One to watch in 2022.

Sustainable food systems (also known as ‘ethical food supply’) are those that deliver food security and nutrition for all without compromising economic, social, and environmental issues. This means farmers, processors, retailers, and consumers all play a part to ensure food becomes a sustainable resource. The goal is to ensure sustainable food is produced using methods that protect the environment and the welfare of the people producing them.

The global ethical food market is expected to grow from $542.84 billion in 2020 to $727.86 billion in 2025, at a CAGR of 6%.

Today’s company has developed a blockchain-based platform to monitor and encourage food to be sustainably produced and to bring trust and transparency into the agri-food industry supply chain.

The company is TrustBIX Inc. (TSXV: TBIX | OTCQB: TBIXF). TrustBIX has two platforms – One is called BIX which stands for ‘Business InfoXchange’, and the other platform is called ‘ViewTrak’.

BIX

BIX is designed to create trust without compromising privacy through innovative, blockchain-derived use of technology and data. Essentially it traces food from farm ‘Gate to Plate®’ to ensure that the food is sustainably produced.

TrustBIX describes some examples of their business by stating:

“TrustBIX provides information services via the BIX platform to Cargill as part of their ongoing
sustainable–sourcing program for their customers like McDonald’s Canada. ….. The BIX platform has over 1,500 producers registered and who track cattle as part of Strategic Sourcing through Cargill for McDonald’s Canada and other restaurants. Since 2014, over 6 million animals worth an estimated $21 billion at retail have been tracked in the system.”

Food retailers and quality producers both benefit as the public is informed that their product is verified to come from operations that meet sustainable standards. Consumers and the environment also benefit by receiving a sustainable food product with a traceable source.

ViewTrak

TrustBIX’s other platform is ViewTrak. It is operated by TrustBIX’s 100% owned subsidiary, ViewTrak Technologies Inc. ViewTrak provides a suite of hardware and software solutions to the livestock industry in Canada, the United States, Mexico, and China. TrustBIX says that ViewTrak has an 80% and 30% share respectively in the Canadian and US Live Cattle Auction Market software automation space. TrustBIX states: “Through our Pork Probes business, we have customers in Canada, Mexico, and China, including the WH Group, the world’s largest pork processor. Millions of pig carcasses have been quality graded using our probes.”

TrustBIX’s business model derives revenue from four sources

TrustBIX’s vision/business model is described as “a world where we trust more, waste less, and reward sustainable behavior, and we deliver on this vision through a business model that combines hardware, professional services, and software solutions, from Gate to Plate ®.”

Source: TrustBIX company presentation

Latest news

TrustBIX’s latest news involves enhancements to the BIX Platform for multiple agricultural sectors, ViewTrak Technologies commercialization success with three new modules for auction software, positive feedback from its test-market exports of traceable authentic Angus beef to Hong Kong, and signing of a contract to develop traceability protocol with the Biomass Quality Network of Canada.

Added to the above was the recent approval for trading on the OTCQB in the United States, under the ticker “TBIXF”.

TrustBIX’s blockchain technology is working to create trust and sustainability in the food supply chain

Source: TrustBIX company presentation

Closing remarks

TrustBIX’s business of ensuring food sustainability and trustworthy labeling is set to grow strongly in the decade ahead as more consumers demand a more sustainable, ethical, and traceable food supply chain.

In 2020 TrustBIX’s revenue grew to ~C$2 million and looks likely to grow with the trend in the years ahead. TrustBIX trades on a market cap of C$5.4 million, so it is still very early days if investors would like to get on board this new trend. Stay tuned.

In September 2021, the UN Food Systems Summit was held to highlight one of the building blocks needed to reach the UN’s Sustainable Development Goals (SDGs) by 2030. The main idea of this Food Systems’ Summit was that we all must work together to bring about positive changes to the management of global food systems. Presently the UN has defined 17 SDGs, although right now it appears that the world is somewhat fixated on the “Climate Action” SDG  that, however, is really only one aspect of sustainability. Others such as eliminating hunger and building sustainable communities rely on healthy and sustainable food systems. When it comes to the definition of a sustainable food system, added are the concepts of economic profitability, benefits for society, positive impacts on the environment and animal welfare. In other words, sustainable food systems must deliver food security and nutrition for all without compromising economic, social and environmental bases.

Why should we care about defining food systems as sustainable? Because all of the SDGs the world is working towards call for deep transformation in agriculture and food systems to make them more resilient, sustainable, and productive. Action must be taken on all levels, from local to global. Good food begins with farmers who grow produce in a way that doesn’t harm the planet, continues with governments and businesses that work together to provide affordable and accessible food, and finishes with consumers who make conscious choices about what, where, and when they buy.

Arguably food is a human right, not a privilege. Today we are going to look at a company that believes in creating a world where we trust more, waste less, and reward sustainable behavior in the food chain. TrustBIX Inc. (TSXV: TBIX | OTCQB: TBIXF) is an innovative data management system that provides chain-of-custody solutions, which allows food processors, retailers, and consumers to have confidence that the claims made around important food attributes are true. This is delivered through a business model that combines hardware, professional services and software solutions. The proprietary BIX (Business InfoXchange System) platform, is designed to create trust and transparency without compromising privacy through innovative, blockchain-derived use of technology and data. TrustBIX delivers independent validation of food provenance and of sustainable production practices within the supply chain. Gate to Plate®, the TrustBIX system is called.

With all that said, let’s take a closer look at the sustainability verification business today. While TrustBix management’s efforts and the Company’s focus is primarily on the development of BIX products and markets, current revenue is generated largely from ViewTrak’s products. ViewTrak has developed solutions for many agricultural technology process verification challenges, with an emphasis on feedlots, auctions and meat processors, and its proprietary technology now includes:

• Auction Master Pro and Market Master – livestock auction market software solutions to help build and operate auction activities,
• Feedlot Solutions – livestock feedlot management software,
• Electronic Pork Grader – pork probe technology to help producers price pork carcasses by evaluating carcasses for fat thickness, lean meat thickness, meat percentage and carcass class.

ViewTrak’s pork probe technology is now used by the largest pork processor in China and by major pork processors in Canada and Mexico to grade and price pork carcasses.

But the future of the Company belongs to the strategic expansion of the BIX solution, customers for which already include Cargill, which uses BIX as part of its ongoing sustainable-sourcing program for its customers such as McDonald’s Canada. Along with enhancing and expanding the capabilities and functionality of TrustBIX’s technology and BIX platform to ensure that the Company continues to be innovative and drives value within agri-food supply chains, TrustBIX’s stated objective is to expand revenue streams, including ESG and cleantech initiatives. Just last week the Company announced it had signed a contract to develop a Traceability Protocol for the Biomass Quality Network of Canada (“BQNC”). BQNC is facilitating the commercialization of agricultural biomass for industrial applications through the development and adoption of quality standards and methods. This falls in line with a previously announced contract with All West Demolition Ltd. to track biomass and waste streams to divert material from landfills and to create new products for agricultural and industrial markets. Other ESG initiatives include signing up the Sunterra Group as its first client for the BuildSense® suite of energy management solutions. The BuildSense suite of solutions is offered in three discrete solutions as Build Aware, Build Sight, and Build Sense, and gives customers progressively deeper insight into energy consumption and sustainability management in their business operations.

Talk about ticking a lot of boxes for an ESG investor. With only 38.4 million shares outstanding, TrustBIX has a market cap of $6.1 million based on its most recent closing price of $0.16 making this a relatively inexpensive option for some quality ESG exposure in your portfolio. Albeit with a burn rate of roughly $500k per quarter and only $900k in cash at the end of Jun/21 TrustBix could be getting close to needing to raise capital, depending on how things have progressed over the last 3 months. The good news is that the company is generating revenue and has made a concerted effort to limit expenses, so perhaps the burn rate may subside and the need for capital will be pushed out past year end. In the meantime, who do you trust and who do you value to verify that? I like to choose TrustBIX.