Triterras Inc

Triterras Inc (Nasdaq: TRIT) is a fintech entity that provides a commodity trading platform. It also provides logistics and credit insurance solutions.

Investment Highlights – AVOID at USD 6.03

• On 6 July 2021, Triterras received a notice from the Listing Qualifications Department of the Nasdaq Stock Market LLC for not complying with Nasdaq Listing Rule 5250(c)(1) and inability to file its Annual Report on Form 20-F for the year ended 28 February 2021.
• In the last financial update, Triterras reiterated its financial guidance for FY21 and expected -
  • Revenues to be around US$56.6 million.
  • Net income to be around US$32.9 million.
• The last financial update is quite old to rely on, while the Company is operating as a penny stock with small market capitalization.
• From a technical standpoint, the current market price is sustaining below the 20-day EMA (USD 6.25), reflecting a bearish price momentum.
• In the last year, TRIT' s price has fallen ~43.45%, reflecting significant underperformance against the Nasdaq index benchmark.

Share Price Chart

 (Data Source: REFINITIV, Analysis done by Kalkine Group)

Conclusion

Based on the delayed financial update, irregular filings, substantial downtrend in prices, unfavourable technical stance, and macroeconomic uncertainty, we have given an “AVOID” stance on Triterras Inc at the closing price of USD 6.03 (as on 9 July 2021), while we look forward to reviewing the FY21 results.  

Neptune Wellness Solutions Inc

Neptune Wellness Solutions Inc (Nasdaq: NEPT) deals in nutraceutical manufacturing and cannabis extraction and provides several consumer brands across multiple verticals.

Investment Rationale – AVOID at USD 1.15

• On 5 July 2021, NEPT received the notification of deficiency from the Listing Qualifications Department of the Nasdaq Stock Market regarding the delayed filing of Form-40. The Company expects to file the report on or about 15 July 2021.
• In terms of financials
  • During Q3 FY21, NEPT reported a decline in revenue, while the gross margin plunged to a loss of 268.3% versus Q3 FY20.
  • The Company further reported a net loss of US$73,799 in Q3 FY21 against a net income of US$5,603 in Q3 FY20.
  • The net loss also included accelerated amortization (pertaining to SugarLeaf acquisition).
• There is significant uncertainty regarding the commercial viability of the SugarLeaf, while there are uncertainties related to the resurgence in Covid-19 cases and volatility in oil prices.
• From a technical standpoint, the current market price is sustaining below the 20-day EMA (USD 1.19), reflecting a bearish price momentum.
• In the last one year, NEPT’s s price has fallen ~61.51%, reflecting significant underperformance against the benchmark, Nasdaq index.

Share Price Chart

 (Data Source: REFINITIV, Analysis done by Kalkine Group)

Conclusion

Based on the delayed filling of the FY21’s financial report, significant losses, bearish price momentum, and macroeconomic uncertainties, we have given an “AVOID” stance on Neptune Wellness Solutions Inc at the closing price of USD 1.15 (as on 9 July 2021), while we look forward to reviewing the FY21 results.

Elys Game Technology Corp

Elys Game Technology Corp (NYSE: ELYS) provides gaming technology solutions worldwide. It has wide portfolio of leisure gaming products and services, including e-sports, sports betting, online casino, bingo, poker, virtual sports, among others.

Investment Rationale – WATCH at USD 4.22

• On 7 July 2021, ELYS announced the acquisition of Bookmakers Company US LLC (USB), whereby Elys will pay $12 million on 15 July 2021, as 50% transaction value in cash.
• In terms of financials,
  • Elys Game Technology reported 39% revenue growth in Q1 FY21 versus Q1 FY20.
  • It also reported strong cash generation with US$21.5 million in cash and cash equivalents (as of 31 March 2021), and no long-term debt.
  • However, the Company reported a net loss of US$0.6 million in Q1 FY21, compared to a net income of US$0.2 million in Q1 FY20.
• As of 31 March 2021, ELYS had accumulated deficit of US$33,788,096, against US$33,178,517 on 31 December 2020.
• From a technical standpoint, the MACD line is trading below the centerline, and has given a negative crossover against the signal line.
• In the past six months, ELYS’ s price has fallen ~26.76%, reflecting significant underperformance against the benchmark, Nasdaq index.

Share Price Chart

 (Data Source: REFINITIV, Analysis done by Kalkine Group)

Conclusion

The acquisition of USD can provide a compelling growth opportunity. Due to high investments to accelerate US expansion, the Company reported a net loss in Q1 FY21 from the last profit position in the same period the previous year. The Company has a streamlined capital structure with no long-term and has ability to report cash flow and profitability. However, intensity and longevity of the Covid-19 pandemic is keeping the outlook gloomy in the short-term as reintroduced restriction can hamper sporting events. Therefore, we look forwarding to revaluating its stance once we have clarity regarding financial guidance or macroeconomic stability.

Based on the uncertain outlook, history of losses, challenging market conditions, we have given a “WATCH” stance on Elys Game Technology Corp at the closing price of USD 4.22 (as on 9 July 2021).

*The reference data in this report has been partly sourced from REFINITIV.