Editing Arctic Shores
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|key_people=Robert Newry}} | |key_people=Robert Newry}} | ||
Employing the right people is one of the best ways to maximise the profitability of any business | Employing the right people is one of the best ways to maximise the profitability of any business, and Arctic Shores is a company that's on a mission to provide more objective, engaging, and fair ways to assess potential employees. | ||
At the heart of Arctic Shores' offerings is its psychometric platform, UNA, engineered to assess key personality traits or competencies that are indicative of success in a given job role. | At the heart of Arctic Shores' offerings is its psychometric platform, UNA, engineered to assess key personality traits or competencies that are indicative of success in a given job role. Currently, there doesn't seem to be a material uniqueness and benefit of the UNA offering. | ||
Assuming that Arctic Shores increases its share of the HR tech market by 741x to 0.5% (from 0.00068%) and other assumptions, the expected return of an investment in the company over the next five years is 12x, which equates to an annual return of 67%. In other words, an £100,000 investment in the company is expected to return £1,302,058 in five years time. | Assuming that Arctic Shores increases its share of the HR tech market by 741x to 0.5% (from 0.00068%) and other assumptions, the expected return of an investment in the company over the next five years is 12x, which equates to an annual return of 67%. In other words, an £100,000 investment in the company is expected to return £1,302,058 in five years time. | ||
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The degree of risk associated with an investment in Arctic Shores is 'high', with the shares having an adjusted beta that is 7x above the market (6.93 vs. 1). | The degree of risk associated with an investment in Arctic Shores is 'high', with the shares having an adjusted beta that is 7x above the market (6.93 vs. 1). | ||
Accordingly, if your desired annual rate of return is | Accordingly, if your desired annual rate of return is 50% or less and/or one of your goals is to provide more objective, engaging, and fair ways to assess potential employees (i.e. you share in the mission of the Arctic Shores company), and you are both willing and able to accept the possibility of losing your entire investment amount, then an investment in the company is considered to be a 'suitable' one. | ||
'''Fun fact:''' the company misspelled its name as "Artic Shores Limited" on the official incorporation filing documents, but realised and corrected the error to "Arctic Shores Limited" within four days.<ref name=":15">https://find-and-update.company-information.service.gov.uk/company/08589048</ref> | '''Fun fact:''' the company misspelled its name as "Artic Shores Limited" on the official incorporation filing documents, but realised and corrected the error to "Arctic Shores Limited" within four days.<ref name=":15">https://find-and-update.company-information.service.gov.uk/company/08589048</ref> | ||
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Arctic Shores' mission is to provide more objective, engaging, and fair ways to assess potential employees, going beyond the traditional CV to give every candidate a chance to showcase their true potential. | Arctic Shores' mission is to provide more objective, engaging, and fair ways to assess potential employees, going beyond the traditional CV to give every candidate a chance to showcase their true potential. | ||
The game-based assessments | The game-based assessments they developed are designed to measure cognitive and emotional abilities, as well as personality traits, in a more engaging way than traditional psychometric tests. By doing so, they aim to reduce biases in hiring decisions and improve the diversity and quality of hires. | ||
=== What are the main offering(s) of the company? === | === What are the main offering(s) of the company? === | ||
[[File:Illustration of the UNA platform interface on a computer screen..png|thumb|An illustration of the UNA platform interface showcasing its various features.]] | [[File:Illustration of the UNA platform interface on a computer screen..png|thumb|An illustration of the UNA platform interface showcasing its various features.]] | ||
Arctic Shores Limited specialises in innovative talent assessment solutions, leveraging psychometric games and Artificial Intelligence (AI) technology to revolutionise recruitment processes<ref>https://dotcommagazine.com/2023/07/arctic-shores-a-fascinating-comprehensive-guide/#:~:text=A%20rctic%20Shores%20is%20a,insights%20into%20candidates%E2%80%99%20cognitive</ref>. | Arctic Shores Limited specialises in innovative talent assessment solutions, leveraging psychometric games and Artificial Intelligence (AI) technology to revolutionise recruitment processes<ref>https://dotcommagazine.com/2023/07/arctic-shores-a-fascinating-comprehensive-guide/#:~:text=A%20rctic%20Shores%20is%20a,insights%20into%20candidates%E2%80%99%20cognitive</ref>. Their primary offering is a Talent Discovery Platform known as UNA, which embodies a myriad of features designed to optimise recruitment outcomes: | ||
# '''Games-Based Assessments (GBA):''' | # '''Games-Based Assessments (GBA):''' | ||
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#* Unlike conventional questioning, UNA employs tasks to assess candidates, which enables a more practical understanding of a candidate’s abilities and behaviors. The tasks score every step a candidate takes, akin to how scoring would be done in interviews or exams, which can increase the size of the talent pool by up to 20%.<ref name=":18">https://www.arcticshores.com/una</ref> | #* Unlike conventional questioning, UNA employs tasks to assess candidates, which enables a more practical understanding of a candidate’s abilities and behaviors. The tasks score every step a candidate takes, akin to how scoring would be done in interviews or exams, which can increase the size of the talent pool by up to 20%.<ref name=":18">https://www.arcticshores.com/una</ref> | ||
# '''Personality and Workplace Intelligence Assessment:''' | # '''Personality and Workplace Intelligence Assessment:''' | ||
#* Arctic Shores assesses both | #* Arctic Shores assesses both Personality and what they term as Workplace Intelligence (akin to Aptitude). These can be measured separately or combined to provide a holistic, accurate picture of someone’s ability to succeed in a role.<ref name=":18" /> | ||
# '''Exceptional Candidate Experience:''' | # '''Exceptional Candidate Experience:''' | ||
#* The platform focuses on delivering an interactive, engaging assessment experience for candidates, supported by instant feedback reports and round-the-clock user support.<ref name=":18" /> | #* The platform focuses on delivering an interactive, engaging assessment experience for candidates, supported by instant feedback reports and round-the-clock user support.<ref name=":18" /> | ||
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=== What is the price of the offering? === | === What is the price of the offering? === | ||
[[File:Illustration of a laptop screen displaying the Arctic Shores website's pricing page with the words 'Flexible pricing for all your recruitment needs'..png|thumb|An illustration of the Arctic Shores website's pricing page on a laptop with a padlock | [[File:Illustration of a laptop screen displaying the Arctic Shores website's pricing page with the words 'Flexible pricing for all your recruitment needs'..png|thumb|An illustration of the Arctic Shores website's pricing page on a laptop with a padlock symbolizing undisclosed pricing.]] | ||
The pricing for the offerings by Arctic Shores Limited is not publicly disclosed on | The pricing for the offerings by Arctic Shores Limited is not publicly disclosed on their official website or other platforms. They offer a flexible pricing model based on the recruitment needs of the client. The pricing page on their official website mentions "Flexible pricing for all your recruitment needs" but does not provide specific pricing details<ref>https://www.arcticshores.com/pricing#:~:text=Flexible%20pricing%20for%20all%20your,Start%20hiring%20for%20potential%20today</ref>. Additionally, on a software review platform, there's a mention of discovering Arctic Shores pricing by requesting a free demo, suggesting that pricing might be shared on a case-by-case basis with interested parties<ref>https://www.softwaresuggest.com/arctic-shores#:~:text=Discover%20Arctic%20Shores%20pricing%2C%20features%2C,By%20submitting</ref>. | ||
Arctic Shores offers two main subscription models: UNA Access and UNA Pro. However, the specific pricing for these subscriptions is not provided on the website. | Arctic Shores offers two main subscription models: UNA Access and UNA Pro. However, the specific pricing for these subscriptions is not provided on the website. | ||
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[[File:Illustration of a global map with pinpoint markers on countries like Indonesia, Greater China, Italy, Spain, The Netherlands, South Africa, and Chile.png|thumb|An illustration of a global map highlighting the locations of Arctic Shores' resellers.]] | [[File:Illustration of a global map with pinpoint markers on countries like Indonesia, Greater China, Italy, Spain, The Netherlands, South Africa, and Chile.png|thumb|An illustration of a global map highlighting the locations of Arctic Shores' resellers.]] | ||
The offerings of Arctic Shores Limited, specifically | The offerings of Arctic Shores Limited, specifically their Talent Discovery Platform UNA, can be purchased or accessed through various avenues: | ||
# '''Direct Purchase:''' | # '''Direct Purchase:''' | ||
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# '''Online Platforms:''' | # '''Online Platforms:''' | ||
#* Official Website: Arctic Shores promotes its offerings on its official website, where potential customers can learn about the products and services, view subscription options, and get in touch for more details.<ref>https://www.arcticshores.com/pricing#:~:text=,Start%20hiring%20for%20potential%20today</ref><ref>https://www.arcticshores.com/#:~:text=Get%20Started,the%20business%20as%20a%20whole</ref><ref>https://www.arcticshores.com/pricing</ref> | #* Official Website: Arctic Shores promotes its offerings on its official website, where potential customers can learn about the products and services, view subscription options, and get in touch for more details.<ref>https://www.arcticshores.com/pricing#:~:text=,Start%20hiring%20for%20potential%20today</ref><ref>https://www.arcticshores.com/#:~:text=Get%20Started,the%20business%20as%20a%20whole</ref><ref>https://www.arcticshores.com/pricing</ref> | ||
#* YouTube Channel: There is a YouTube channel dedicated to Arctic Shores where | #* YouTube Channel: There is a YouTube channel dedicated to Arctic Shores where they have posted content about their behavior-based assessment, potentially among other offerings.<ref>https://www.youtube.com/channel/UCdoDJCAGYCw_1ewEvrDol1A#:~:text=Channels%20About%20Stones%20Sessions%20promo,BBA%3A%20Three%20little%20letters%2C%20three</ref> | ||
# '''Partnerships:''' | # '''Partnerships:''' | ||
#* Arctic Shores has formed partnerships to promote its offerings. For example, a partnership with Wiser is mentioned, which is based on a shared mission rather than just synergies or complementary offerings.<ref>https://landing.arcticshores.com/wiser#:~:text=The%20partnership%20between%20Arctic%20Shores,is%20that%20human%20potential</ref> | #* Arctic Shores has formed partnerships to promote its offerings. For example, a partnership with Wiser is mentioned, which is based on a shared mission rather than just synergies or complementary offerings.<ref>https://landing.arcticshores.com/wiser#:~:text=The%20partnership%20between%20Arctic%20Shores,is%20that%20human%20potential</ref> | ||
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#* Arctic Shores is committed to contributing towards a work environment that’s truly fair and inclusive, with one of its founding principles being that everyone deserves a fair shot.<ref>https://www.arcticshores.com/our-story#:~:text=Explore%2C%20always%20We%20can%E2%80%99t%20change,everyone%20deserves%20a%20fair%20shot</ref> | #* Arctic Shores is committed to contributing towards a work environment that’s truly fair and inclusive, with one of its founding principles being that everyone deserves a fair shot.<ref>https://www.arcticshores.com/our-story#:~:text=Explore%2C%20always%20We%20can%E2%80%99t%20change,everyone%20deserves%20a%20fair%20shot</ref> | ||
# '''Technological Innovation and Product Development:''' | # '''Technological Innovation and Product Development:''' | ||
#* Continuation of the innovative blend of game technology, behavioral science, cognitive neuroscience, and data analytics in | #* Continuation of the innovative blend of game technology, behavioral science, cognitive neuroscience, and data analytics in their platform to help organisations and individuals make better people and career choices, likely reflecting a long-term strategy of technological innovation and product enhancement.<ref>https://www.arcticshores.com/our-story#:~:text=Explore%2C%20always%20We%20can%E2%80%99t%20change,everyone%20deserves%20a%20fair%20shot</ref> | ||
# '''Customer Acquisition and Retention:''' | # '''Customer Acquisition and Retention:''' | ||
#* Building on a robust client base including global entities like PwC and Siemens, the company may focus on customer acquisition and retention to further its revenue and market share. | #* Building on a robust client base including global entities like PwC and Siemens, the company may focus on customer acquisition and retention to further its revenue and market share. | ||
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A key way to determine a product's closest competitors is by looking at other offerings that are targeting the same or similar target audience (i.e. recruiters) and aiming to provide the same core benefit (i.e. more efficient recruiting, and, ultimately, maximising profits), and then ranking the offerings in terms of the total amount of time spent using and/or money spent purchasing the offerings relative to other similar offerings. With that said, according to Stockhub users, the closest competitor of the Arctic Shores offering is Pymetrics. | A key way to determine a product's closest competitors is by looking at other offerings that are targeting the same or similar target audience (i.e. recruiters) and aiming to provide the same core benefit (i.e. more efficient recruiting, and, ultimately, maximising profits), and then ranking the offerings in terms of the total amount of time spent using and/or money spent purchasing the offerings relative to other similar offerings. With that said, according to Stockhub users, the closest competitor of the Arctic Shores offering is Pymetrics. | ||
Arctic Shores operates in the talent assessment and HR tech space, offering game-based assessments for recruitment. In this domain, | Arctic Shores operates in the talent assessment and HR tech space, offering game-based assessments for recruitment. In this domain, they face competition from both traditional psychometric test providers and other innovative assessment tool providers. A detailed comparison between Arctic Shores and some of its main competitors are shown in the table below. | ||
{| class="wikitable" | {| class="wikitable" | ||
|+ | |+ | ||
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|Uses neuroscience-based games and artificial intelligence to match candidates' emotional and cognitive abilities with company profiles. | |Uses neuroscience-based games and artificial intelligence to match candidates' emotional and cognitive abilities with company profiles. | ||
|Offers video interviewing software and also uses AI-driven assessments to evaluate video interviews. | |Offers video interviewing software and also uses AI-driven assessments to evaluate video interviews. | ||
|While primarily focused on the tech recruitment space, | |While primarily focused on the tech recruitment space, they offer gamified coding challenges and assessments for programmers. | ||
|Offers a range of assessment tools, including game-based assessments that evaluate cognitive ability and emotional intelligence. | |Offers a range of assessment tools, including game-based assessments that evaluate cognitive ability and emotional intelligence. | ||
|Provides more traditional forms of cognitive and personality testing. | |Provides more traditional forms of cognitive and personality testing. | ||
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=== SOM (Serviceable Obtainable Market): === | === SOM (Serviceable Obtainable Market): === | ||
Arctic Shores' SOM would be a subset of | Arctic Shores' SOM would be a subset of their SAM, and would depend on their competitive positioning, product efficacy, marketing efforts, and other factors. Without specific data on their market share and the adoption rate of game-based assessment tools, it's challenging to provide a numeric estimate. It could be anywhere from several million to several billion, depending on the aforementioned factors. | ||
== Financials == | == Financials == | ||
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|N/A | |N/A | ||
|N/A<ref name=":20">The company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime. To be considered a small company, the company must have any 2 of the following: a turnover of £10.2 million or less; £5.1 million or less on its balance sheet; and/or 50 employees or less. The company has 77 companies, and therefore must have: a turnover of £10.2 million or less (and £5.1 million or less on its balance sheet).</ref> | |N/A<ref name=":20">The company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime. To be considered a small company, the company must have any 2 of the following: a turnover of £10.2 million or less; £5.1 million or less on its balance sheet; and/or 50 employees or less. The company has 77 companies, and therefore must have: a turnover of £10.2 million or less (and £5.1 million or less on its balance sheet).</ref> | ||
|N/A | |N/A<ref name=":21">The company has incorrectly used the small companies' regime provision. Accordingly, once made aware of the error, the company is expected to file its comprehensive income statement for the year ending 31st December 2022.</ref> | ||
|1,679,215 | |1,679,215 | ||
|4,280,780 | |4,280,780 | ||
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|N/A | |N/A | ||
|N/A | |N/A | ||
|N/A | |N/A<ref name=":21" /> | ||
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The beta value in a future period has been found to be on average closer to the mean value of 1.0, and because valuation is forward-looking, it is logical to adjust the raw beta so it more accurately predicts a future beta. In addition, here, we have assumed that for an investment to be considered 'high' risk, it must have a beta value of 1.5 or more. Further information about the beta ratings can be found in the appendix section of this report. | The beta value in a future period has been found to be on average closer to the mean value of 1.0, and because valuation is forward-looking, it is logical to adjust the raw beta so it more accurately predicts a future beta. In addition, here, we have assumed that for an investment to be considered 'high' risk, it must have a beta value of 1.5 or more. Further information about the beta ratings can be found in the appendix section of this report. | ||
=== Early-stage investment === | |||
Arctic Shores is at one of the earliest stages of the business lifecycle, and the failure rate of companies at that stage is usually much higher than those at a later stage. As of 2022, 57% of companies that are incorporated in the United Kingdom fail within the first five years of the companies incorporation, according to the Office for National Statistics.<ref>https://www.ons.gov.uk/businessindustryandtrade/business/activitysizeandlocation/bulletins/businessdemography/2020#the-south-west-continued-to-have-the-highest-five-year-survival-rate</ref> We note that Arctic Shores is 10 years old as of 24th October 2023. | |||
=== Illiquid investment === | |||
The number of transactions in shares of private companies is usually significantly lower than in public companies, typically resulting in it taking longer to sell shares in private companies at a price that is at least equal to the price that the shares were bought at. Accordingly, the Arctic Shores investment opportunity is considered to be higher risk than more liquid companies. | |||
=== Financial Risk === | |||
The details of the financial health, including the valuation, revenue, and profitability of Arctic Shores Limited, are not publicly disclosed, making it challenging for investors to assess the financial risk fully. Moreover, the small uplift in funding between two rounds and a debt financing round might indicate financial constraints or cautious growth strategies.<ref>https://www.enterprisetimes.co.uk/2023/01/16/arctic-shores-raises-5-75-million-in-series-b-funding-round/</ref> | |||
=== Market Competition === | |||
As a provider of psychometric assessments, Arctic Shores operates in a competitive market with several other established players. The competition might affect the company's market share and profitability. | |||
=== Technological Changes === | |||
The company's operations heavily rely on game technology, behavioral science, and potentially AI. Rapid technological changes or inability to keep up with such changes could pose a risk. | |||
=== Regulatory Risks === | |||
Being in the recruitment and assessment sector, Arctic Shores might face regulatory challenges, especially when expanding internationally. Different regions have varying regulations concerning recruitment, data privacy, and assessments which could affect the company’s operations. | |||
=== Customer Acquisition and Retention === | |||
# | The success of Arctic Shores in acquiring and retaining customers, especially large organisations, is crucial for its revenue generation and growth. | ||
=== Reputation Risk === | |||
The company’s reputation among its clients and within the industry is vital for its success. Any negative publicity or failure to deliver as promised could adversely affect its reputation and, subsequently, its financial performance. | |||
=== Investor Relations === | |||
The investor relations and the ability to secure further funding for growth or operations is also a critical aspect. The company has had several funding rounds, and the continuation of this support is vital for its sustainability and expansion.<ref>https://www.cbinsights.com/company/arctic-shores/financials</ref><ref>https://www.crunchbase.com/organization/arctic-shores/company_financials#:~:text=%23%20%E3%80%903%E2%80%A0Arctic%20Shores%20,Log%20in%20to%20view%20data</ref> | |||
== Valuation == | == Valuation == | ||
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The Stockhub users estimate that the expected return of an investment in the company over the next five years is 12x, which equates to an annual return of 67%. In other words, an £100,000 investment in the company is expected to return £1,302,058 in five years time. The assumptions used to estimate the return figure can be found in the table below. | The Stockhub users estimate that the expected return of an investment in the company over the next five years is 12x, which equates to an annual return of 67%. In other words, an £100,000 investment in the company is expected to return £1,302,058 in five years time. The assumptions used to estimate the return figure can be found in the table below. | ||
Assuming that a suitable return level over five years is | Assuming that a suitable return level over five years is 50% per year or less, and Arctic Shores achieves its expected return level (of 67%), then an investment in the company is considered to be an 'suitable' one. | ||
===What are the assumptions used to estimate the return?=== | ===What are the assumptions used to estimate the return?=== | ||
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|What's the current value of the company? | |What's the current value of the company? | ||
|£21.98 million | |£21.98 million | ||
|The Stockhub users calculate the valuation as of £21.98 million (for the calculation, see the 'Arctic Shores Series B valuation calculation' table in this report | |The Stockhub users calculate the valuation as of £21.98 million (for the calculation, see the 'Arctic Shores Series B valuation calculation' table in this report. However, according to Dealroom.co estimates, the firm valuation is between $30m and $46m ($38 million mean) as of January 2023.<ref name=":2" /> The valuation is based on either of: the publicly disclosed value, or an estimate that is based on the last funding round amount, using similar rounds as benchmarks. | ||
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|Which time period do you want to use to estimate the expected return? | |Which time period do you want to use to estimate the expected return? | ||
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|Preferred stock, $0.001 par value; 10 million shares | |Preferred stock, $0.001 par value; 10 million shares authorized; no shares issued or outstanding as of January 31, 2023, and 2022 | ||
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|Class A common stock, $0.001 par value; 750 million shares | |Class A common stock, $0.001 par value; 750 million shares authorized; 204 million and 196 million shares issued and outstanding as of January 31, 2023, and 2022, respectively | ||
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|Class B common stock, $0.001 par value; 240 million shares | |Class B common stock, $0.001 par value; 240 million shares authorized; 55 million and 55 million shares issued and outstanding as of January 31, 2023, and 2022, respectively | ||
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|Depreciation and | |Depreciation and amortization | ||
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| | |Amortization of deferred costs | ||
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| | |Amortization and writeoff of debt discount and issuance costs | ||
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|Receivables from brokers, dealers, and clearing | |Receivables from brokers, dealers, and clearing organizations | ||
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|Deposits with clearing | |Deposits with clearing organizations | ||
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| colspan="6" |Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | | colspan="6" |Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
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|Depreciation and | |Depreciation and amortization | ||
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| | |Capitalization of internally developed software | ||
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|340 | |340 | ||
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| | |Amortization | ||
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|Preferred shares: | |Preferred shares: authorized unlimited number of non-voting, cumulative, redeemable and retractable | ||
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|0 | |0 | ||
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|Common shares: | |Common shares: authorized unlimited number of non-voting, redeemable, retractable Class A common shares and unlimited number of voting common shares | ||
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| | |Amortization | ||
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