SSC SEC Services Corp. (SECUF)

[Belek]

Fair value of Input Capital increased

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As mentioned last week, Input Capital (TSX-V: INP) reported their Q1 -2015 earnings. The following gives a
brief overview of our recent update. The full update can be found on our website.
The company reported $2.26 million in revenue from canola sales. This canola was due from the previous
growing season, and Input expects to recognize a further 7,810 tonnes of canola in 2015 that was due from the
FY 2014 harvest year. Input noted that they are due 38,338 tonnes of canola for FY2015, and we estimate that
41,000 tonnes of canola will be received. Our higher amount accounts for canola that may be received from
additional streams signed in FY2015. Due to the significant financing, and high amount of cash on hand for
Input, we raised our FY2016 capital deployment and revenue estimates.

We have lowered our estimate of the price received per tonne of canola to $450 from $475 for FY2014. This is
due to an anticipated bumper year for soy beans. Soy beans and canola have similar uses and pricing is highly
correlated. The below shows the January 2015 futures price of soy beans and Canola.



We estimate that expenses will rise as the company continues to grow. In their earnings call, management noted
that they had hired additional staff.
Given the lower canola prices and higher expenses, our net income estimate declined in FY2015 to $6.06 million
(EPS: $0.08) from $7.56 million (EPS: $0.12). Despite the short term decreases in revenue, our discounted cash
flow estimated increased. Due to the capital available, we anticipate Input can increase their rate of capital
deployment, which resulted in a higher valuation. Our fair value for the stock increased to $3.50 per share from
$3.30 per share.