Baylin has been receiving some chatter within the Wolf Den discord as of late. Not by me, but requests have come in for a review so here we sit. I tend to review a lot of companies and sometimes I forget that I’ve covered them previously, as is the case with Baylin.

I think this image speaks for itself as to how it went the last time.

The stock is down about 50% in the eighteen months since that review, but it is actually up 20% over the past twelve, trading in the 22 to 30 cent range for most of that time.

Not today doesn’t mean forever. The company has been on the small cap conference trail promoting the company of late. That timing is not coincidental - they are coming off of a large acquisition announced a couple of weeks after their recent Q1 in mid May.

Therefore this review will need to dig a little deeper than just their recent financials.

Not today but….

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There is the odd occasion when I sit down to write a review and think to myself, “Is anyone going to give a shit about this one?” This is one of those times.

Not a great lede for a 2026 Wolf Pick, but after some initial fan fare after making it a selection in mid December sending the stock up by 130% over the next two weeks, there hasn’t been very much to get excited about since. That includes a mediocre 2.75 star review back at the end of January for their Q3. The stock has now come back to reality sitting up just 3.5% from the pick, well off the average of 42%.

Now that I’ve adequately lubed up your sensory glands with anticipation, let’s get into the review.

Balance Sheet:

Pudo finds themself in a similar position as they did at the end of their third quarter. A current ratio of 1.9, but light on cash with receivables making up 70% of their current assets. Since these are annual financials for a stock on the junior exchange we must also account for the fact these numbers are 3.5 months old - the end of February in this case and the first quarter of 2027 ended in May.

So as of Feb 28th, Pudo had $242k in cash, $905k in receivables and $142k in other short term assets against just $675k in short term liabilities. The company also maintains no debt OR long term liabilities.

Their aging report was a little worrisome last quarter but has improved slightly with only very minor amount over 60 days and the total amount is down by $180k over their last three months.

Cash Flow:

The bad news is Pudo burned through $505k in operational cash flow during their fiscal year. The slightly less bad news is they only burned $7k in Q4 after their worst quarter of the year in Q3 when the burn rate was $300k. 80% of that burn was due to working capital adjustments, mainly from the increase in accounts receivables. Therefore it isn’t as bad as it looks, but it’s still far from good.

They invested $35k and had a raise of $101k during the year. Sadly, overall they burned through two thirds of the cash on hand they had to begin the year.

With less than a quarter million in cash to end the year, this burn rate is unsustainable, and will need a big turnaround in the first half of the year to avoid a raise of capital.

Share Capital:

• 33.3M shares outstanding, 22% dilution over the past year due to a raise and debt settlements

• 3.6M options outstanding, with 350k expiring unexercised in Q4. 1.7M are ITM but do not expire until Jan 2030. With the treasury being light, will insiders early exercise some of these options with the stock price currently double the $0.14 option price?

• Approximately 50% insider ownership with the top two shareholders being private companies - Palm Holding and Cardinal Couriers

• Insiders were major participants in their March 2025 raise and debt settlements

• No Sedi filings since March of 2025

Income Statement:

A relatively successful top line performance on the year with a 35% increase in revenue to $5.6M and that came with a slight drop in margin of 100 basis points to 33.4%. Gross profit dollars as a result grew by 31%.

Unfortunately the company did not gain any operational leverage last year as Admin expenses rose by 52%, a significantly higher rate than their revenue or GP dollar gains. Their top two expense buckets, payroll and G&A rose by 71% and 30% respectively. Salaries and benefits to related parties grew by 3.5x. Really?

This all results in a quadrupling of their losses from a year ago, $332k vs $82k.

Q4 results were not more encouraging. Revenues came in at $1.38M, down by 5.6% and the worst performing top line quarter of their last five. While margin was above their annual total at 35.5%, it was off last year by 450 basis points, leaving gross profit dollars off by 14%. To add insult to injury, admin expenses grew by 63% leading to a reversal of profitability of $167k last year to a loss of $85k this year.

This is a clear definition of a reverse Wolf Trifecta. This makes Wolf unhappy.

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Summary:

There is no putting lipstick on this pig of a quarter and a terrible back half of the year after what was a rather encouraging first half.

The thesis of the Wolf Pick was a growth story that could turn them into an acquisition target, as has happened with their competitors. Management is aligned with this thinking as well - they have a goal of moving on and cashing out.

Unfortunately that thesis starts to fall apart when you stop growing, have margin slippage and spend a shit ton more on in expenses. The comments in their deck for Q1 are not exactly encouraging either, particularly given their cash position and risk of burn, setting up a potential need for a raise.

They go back into the watchlist pile here as we see where their Los Angeles expansion takes them. Q2 may be the tell if this growth story can still remain intact.

Downgrading from 2.75 to 2.0. But hey, at least I’m not deleting the channel like some other discords have with their annual picks.

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Disclaimer:

My intent is for my reviews to be a bolt on to due diligence that you have already completed. I receive dozens of review requests a week, therefore my own DD may be great or none whatsoever. Unless otherwise stated or implied, my opinions are on the financial performance of the company based on their most recent filings. I conduct these reviews to assist other retail investors whose research skills are limited when it comes to reviewing financial statements. I do not accept compensation of any kind from companies I review.

Wolf FINS Reviews are intended to be informational and are based on personal opinion. They are not intended to be financial advice, and all readers are encouraged to perform their own due diligence prior to their investment decisions, including discussions with their investment advisor.

Well it took about three years worth of reviews for someone to finally tell me that I have been using the wrong corporate logo for this 2025 Wolf Pick. Awkward.

Minutes ago ADF Group release their first quarter of 2026, and the highlights look quite impressive.

Four months after my 2025 Wolf Pick came Trump’s “Liberation Day” tariffs sending the stock market reeling and to a much larger extent Canadian companies dealing with aluminum and steel. Due to some excellent managerial decisions a year ago and their deft acquisition of LAR group last September, the company has clawed all the way back and then some with the share price appreciating by over 52% since they released their Q1 a year ago.

A year ago tomorrow I ended a tough review with this.

Guess what, they’re back.

I did not have a chance to review their annuals presented in mid April, my last coming in December after their Q3 which received 3.25 stars. The highlights in the news release suggest upgrade potential. Let’s do the work to find out.

Balance Sheet:

We begin with a solid current ratio of 2.2 that consists of $62.1M in cash, $80.5M in receivables, $18.6M worth of inventory and $81M in other short term assets overtop of $93.2M in liabilities due over the next twelve months. Liquidity is pretty good as well with a quick ratio of 1.5 that includes their cash + A/R against their one year commitments.

I’ve mentioned my disappointment in only disclosing an aging report on an annual basis, but the good news is their A/R is down from the last time we looked at it in December while revenue has increased significantly.

DRX has $37.5M of debt as of these statement, about $1M less than our last review. Post financials the company added $12.5M worth of debt through the Liberal government’s Strategic Response Fund. 50% of which comes in the form of a grant and the other half interest free over eight years beginning in 2029. You don’t turn down this type of opportunity. Free money Homey.

Cash Flow:

ADF Group had $10.1M of operational cash flow in the quarter, which on the surface may look like a huge miss compared to the $25.3M they generated in the comparable quarter. I’m here to tell you it’s not, as there is a $28M reversal in working capital changes from last year. Prior to working capital adjustments, cash flow from operations totaled $20.2M vs $7.1M.

The company made $8.9M worth of investments in the quarter and paid down nearly $1.8M of debt including interest payments. Overall, they maintained a very similar cash position as they began their fiscal year worth.

Share Capital:

• 28.6M shares outstanding made up of 16.5M subordinate and 12.1M multiple voting shares

• 1.05M subordinate shares repurchased last year. NCIB not renewed from December.

• 450k shares issued in Sept as part of the LAR acquisition

• 51% ownership between insiders, institutions and private companies

Income Statement:

Revenues exploded out of the gate with $99.3M compared to just $55.5M, an increase of 78%. Not only is that exciting from a YoY perspective, but it is also their best top line performance of the last eight quarters, and at a time when they are facing significant tariff headwinds. Equally impressive was their margin which rose by 220 basis points from 22% to 24.2%, nearly doubling their gross margin dollars which increased by 97%.

They did not however have great conversion within their operational expenses as Selling and Admin expenses rose by 125%, higher than the rate of both their revenue and GP gains. They also came in at 7.7% of revenue vs 6.1%. Acquisition costs related to LAR and SBC costs were the cause. Therefore they miss out on a Wolf Trifecta in Q1.

But even after paying 49% additional income taxes in the quarter, they were still able to deliver $12M of net income, 37% more than a year ago. This was also achieved while experiencing a $2.6M bogey to last year in foreign exchange gains.

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Summary:

A pretty fantastic quarter out of the gate, but you have to feel that management sandbagged here as their commentary in April after their somewhat disappointing Q4 didn’t sound this bullish. Post “Liberation Day” the company has become much more conservative on their conference calls, and quite frankly who the hell can blame them. I don’t think Trump knows what he is going to do on a day to day basis, so how can they?

I don’t expect the company’s tone to change much in today’s call so I won’t be waiting for it to complete the review.

What the company did say last time which has changed should be the impact of capex in their fiscal 2027. That is due to the $12.5M in funding from the feds, which essential comes in the form of a half grant, and half interest free loan for which payments will occur in 2029-2037. We are still about one year away from that capex to pay dividends with the completion expected late Q1 of their fiscal 2028 (May/June of 2027).

While I expect their quarterly revenue numbers to be lumpy, their short-mid term outlook is very positive as evidenced by their backlog. That number is up by 95% from one year ago and 15% better than announced after their Q4. That does not include a $200M potential extension with their energy sector customer in Quebec. With the government’s aggressive infrastructure plans, the company is also positioned very well to take advantage of those opportunities.

Better yet, that backlog is 74% Canadian. In Q1 of last year, Canadian revenues only amounted to 13% of their business (30% this quarter). This really shows the value of the LAR acquisition and managements ability to diversify and manage the business under very challenging conditions.

With TTM revenue now at $303M and Net Income at $30M, the company now trades at sub 1.0 P/S, a 9.9 P/E and about 5.5 EV/EBITDA ratio. This easily looks to have a 50% upside over the next twelve months.

Upgrade to 3.75 stars and likely poised for another shortly. They are back in a big way.

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My intent is for my reviews to be a bolt on to due diligence that you have already completed. I receive dozens of review requests a week, therefore my own DD may be great or none whatsoever. Unless otherwise stated or implied, my opinions are on the financial performance of the company based on their most recent filings. I conduct these reviews to assist other retail investors whose research skills are limited when it comes to reviewing financial statements. I do not accept compensation of any kind from companies I review.

Wolf FINS Reviews are intended to be informational and are based on personal opinion. They are not intended to be financial advice, and all readers are encouraged to perform their own due diligence prior to their investment decisions, including discussions with their investment advisor.

What a great story D-Box has been over the last five quarters. In February of last year, I gave the company my Wolf Seal of Approval, my first in what would become a new way of announcing my mid-year Wolf Picks. The stock traded at $0.145 then and yesterday leading into these financials, the stock closed at $0.90 for a 521% return.

My conviction has only grown since then with multiple buy zones along the way, including in my recent May What’s Wolf Watching article. Within that piece I noted that DBO would be up against a very soft comp setting them up for a pretty good top and bottom line beat, also noting I would be a buyer at any dip into the 80-85 cent area. That opportunity arose last week touching the bottom of that buy zone at 80 cents and I and others within the Wolf Den Discord acted upon it.

You may have noticed many of my reviews of late have been a bit of a bummer with many of those covered missing expectations. Therefore I was very much looking forward to after hours yesterday. The highlights look excellent, supporting my thesis of a great quarter to close out the year on both ends of the P&L. Revenue was up 70% with net income up by 162%.

Let’s get into the weeds to ensure we do not come across any landmines. Grab yourself a comfy D-Box seat, and come along for a ride to see if we can determine where D-Box goes next.

* Free subscriber release on June 9th.

Balance Sheet:

DBO boasts a very clean and healthy balance sheet. They have a current ratio of over 4.1 consisting of $17.6M in cash, $8.4M in receivables, $6.2M worth of inventory and $1M in other short term assets. All of that is overtop of just $8M in short term liability commitments (deferred revenue removed).

They are very liquid with just their current cash position covering their next year’s financial commitments by a factor of more than 2x.

D-Box’s A/R appears healthy but I will note that they do not provide a traditional aging report. In note 17.2 they do add that three clients make up 43% of all money’s owed, and receivables over 90 days stood at 8%. About half of that amount ($324k) is booked as an allowance for doubtful accounts. The company has only written off $68k in the last two year.

They are also virtually debt free with a small Canada Economic Development loan at 4% with $323k remaining and will be extinguished by December of 2027.

This is about as solid of a start that one could hope for.

Cash Flow:

DBO generated $12M of operational cash flow during their fiscal 2026, 61% more than they generated a year ago. Q4, due to working capital adjustments came in at a similar $2M of OCF on a YoY basis.

Through the year they invested $1M in assets, paid down $900k of debt and had $100k flow into the treasury from exercised options.

Overall the company improved their cash position by 125% from the start of their fiscal year.

A short cash flow section is typically a good cash flow section. That is the case here.

Share Capital:

• 222.8M shares outstanding with just 0.3% dilution over the past year

• NCIB to buy back up to 10% of shares announced a week before year end, with 173k re-purchased and cancelled. Approximately 580k bought back and scheduled to be cancelled since year end

• 13M all ITM options outstanding under the company’s 10% plan - none expire for another 2.5 years

• 425k SAR’s (Share Appreciation Rights) and 1.4M RSU’s

• 6% insider ownership with 16% owned by institutions. Top five per SimplyWallSt shown below

  

• Mixture of insider buying and selling with the audit chair and largest insider, reducing his holdings by 38% over the past year

Income Statement:

Total revenues for 2026 totaled $57.6M, up 35% over last year. Gross margin improved on the year by 60 basis points to 52.8% and gross profit dollars improved by 36%.

Controllable operating expenses (forex losses removed) only grew by 8.3% while generating 35% more revenue showing exceptional operating leverage. This included a reduction in marketing spend by 11.7%. Admin and R&D costs rose by 21% and 20% respectively.

On the year, that awards them the Wolf Trifecta, for generating significant revenue wins, improving margin, and excellent expense control.

Wolf Trifecta’s add up to improvements in profitability. After also reducing financing expenses by 98% YoY, profit before income tax nearly tripled from $3.88M to $11.36M.

D-Box also had the luxury of carrying forward some tax losses in 2026, adding an additional $6.1M to the net income line and increasing their total profitability by over 350% YoY.

On a YoY comparison basis, Q4 revenues were the best performing quarter of 2026, rising to $14.65M, up 70%. That did however come at the expense of some gross margin with the rate eroding by nearly 600 basis points to 48.3%, and the only quarter of the year to slip under the 50% mark.

That was driven by revenue mix with much softer Sim revenue which carries higher margins. Theatrical revenue on the other hand was up by nearly 8x, but it also carries a lower rate. Despite this, gross profit dollars were still up by over 50% in Q4.

While not as strong as the total year, DBO still converted well on operating expenses with their three main buckets increasing by 31%, R&D spending rose by 12%, Sales & Marketing costs rose by 21%, and due to $500k of additional SBC costs, Admin expenses rose by 57%.

That all combined to drive $1.89M in net income vs $0.72M last year and increase of 162%. They fall shy of a Wolf Trifecta in the quarter, but more than made up for it during the rest of the year.

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Summary:

Overall this was a very transformational year or past five quarters for the company. They increased their net number of screens by 18% during the year while growing their royalty revenue by 36% and theatrical system sales by 133%.

Their sim racing and sim training businesses were both down by double digits and still make up 28% of total revenues. While this segment will be much lumpier than the others, it’s still large enough a factor to sway quarterly results.

But the future of DBO will rest with their theatrical business driving installs and the very important royalty revenue that generates going forward. With 66 net new screens added in Q4, that sets up their royalty revenues very well for next few quarters. They are also only present in less than 2% of North American screens and under 1% globally, giving them huge potential for the next number of years. Even on a comp basis, theatres are expecting solid growth over the next year with greater emphasis on premium experiences which sets D-Box up well.

So how do we price D-Box, particularly considering the $6M+ birdie in income taxes this year?

At $0.90, DBO sits at a $200M market cap with their valuation ratios as follows - an 11.5 P/E, 13x Adjusted EBITDA and 16.6x Cash flow. It’s unusual to see a P/E ratio lower than the others and that is due to the tax benefits experienced in 2026.

This past year won’t be the only time the company recognizes some deferred tax benefits as they have $6.4M and additional federal and provincial R&D expenditures to recognize for years to come.

Even with that I don’t think the 11.5 P/E is a great metric here. Without the tax benefits in ‘26 their P/E would stand at 17.6. That feels fair for what they are doing today, and then investors need to price in all of that white space potential. Can they get 2% global screen penetration in the next few years? That would be 4,000 screens and they have 1,200 today. That would be 3.5x their performance today. Feels doable.

Is DBO dollar bound today? I think they should be. Let’s see what transpires. Maintaining 4.5 stars.

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Disclaimer:

My intent is for my reviews to be a bolt on to due diligence that you have already completed. I receive dozens of review requests a week, therefore my own DD may be great or none whatsoever. Unless otherwise stated or implied, my opinions are on the financial performance of the company based on their most recent filings. I conduct these reviews to assist other retail investors whose research skills are limited when it comes to reviewing financial statements. I do not accept compensation of any kind from company’s I review.

Wolf FINS Reviews are intended to be informational and are based on personal opinion. They are not intended to be financial advice, and all readers are encouraged to perform their own due diligence prior to their investment decisions, including discussions with their investment advisor.

I’m making the assumption before we dig into these Q1 financials that it will be brief since I recently covered them in my Mother of All Reviews for their Q4.

PCRX is part of the batch of my 2026 Wolf Picks, currently up 20%, peaking at 29% recently after announcing their big acquisition plans at the end of April.

Let’s check in on their Q1 progress.

Balance Sheet:

The balance sheet looks incredible with a current ratio of 9.4 consisting of $23.4M in cash, $1.2M in A/R, $3.1M worth of inventory and $93k in prepaids overtop of just $2.9M in liabilities due over their next twelve months.

But that cash will not be in the treasury for very long with their announced plans to acquire eight pharmacies in Eastern Canada for an announced price tag of $24.2M. In that same announcement they also revealed four other pharmacies under LOI. Just last week one of those letters of intent turned into a definitive agreement to acquire an Ontario location for $8.2M.

Doing the simple math (24.2+8.2) is $32.4M. They ended Q1 $9M shy of that figure in order to close those two deals. Where will that shortfall come from?

Pharmacorp’s A/R looks healthy with 84% current and no other issues arising from their balance sheet that look problematic.

PCRX has $3.2M of debt, all borrowed against a $20.5M credit facility which has a $10M accordion feature at a monthly variable CORRA rate (currently 2.25%). I think that leads one to believe where those additional funds are going to come from - tapping much deeper into this credit facility.

Cash Flow:

Pharmacorp burned $2.67M of operational cash flow during Q1, but I wouldn’t get concerned with that number as the company had $3.2M of negative impact from working capital adjustments, almost all arising from paying down their A/P by more than half. It sat at $5.2M at year end three months ago, and $2.4M today.

I’m much more encouraged that their operational cash flow was $521k to the positive prior to working capital adjustments, and that figure is up 24% YoY.

Minor activities within the financing and investing side during Q1. Overall their cash position depleted by 10% in their first quarter, but we know both their cash flow and balance sheet will look significantly different when they produce their Q2 in August.

Share Capital:

• 174M shares outstanding, with 48% dilution during the past five quarters

• 28.4M warrants outstanding, all just ITM at $0.50 expiring in Nov of 2027 from last November’s raise

• 9.3M options, all ITM but none expiring for 6 years plus

• 11% insider ownership with institutions making up 6%

  

• No recent insider buying in the open market, but five different insiders did participate in the November raise for a total of over $1.5M

Income Statement:

Revenues came in at $7.2M, up 79% over a non comparable $4M a year ago due to new pharmacies added to the mix. Gross margins slipped by 170 basis points from 40.5% to 38.7%, and that drove an additional 72% gross profit dollars.

Operating expenses doubled to $2.8M, with cash burning expenses rising by a similar figure, both well above the rate of revenue and margin gains. While a portion of these expenses are from additional legal costs and fees stemming from their acquisitions, their G&A and payroll expenses are up about double as well, but they are not getting double the amount of revenue at the top. Something to monitor going forward.

After $205k in other income, mainly from interest received on their large cash position, PCRX delivered $127k of net income in the quarter, 50% less than the comparable period.

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Summary:

Nothing earth shattering within these numbers, nor did I expect it. The company is trending towards a $30M run rate with their current six locations, and with seven new ones announced and another three under LOI, it looks quite likely they will triple their current pharmacy count to at least eighteen by the end of 2026.

While the majority of their growth is from new locations, they are growing organically. This is one of the things that attracted me most to Pharmacorp - their ability to quickly turn around well established pharmacies and integrate new merchandising strategies for the front of the store while also driving additional prescription revenue.

The risks with Pharmacorp are the same as when I first talked about the company in my 2026 Wolf Pick article. PCRX will have substantial growth for the foreseeable future, but it will come at the cost of dilutionary measures, or debt. You need to fully understand that, expect that it will occur and be ok with it.

I am, and I’ll be looking to add to my position above the 49 cent range as those opportunities happen. Three stars.

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Disclaimer:

My intent is for my reviews to be a bolt on to due diligence that you have already completed. I receive dozens of review requests a week, therefore my own DD may be great or none whatsoever. Unless otherwise stated or implied, my opinions are on the financial performance of the company based on their most recent filings. I conduct these reviews to assist other retail investors whose research skills are limited when it comes to reviewing financial statements. I do not accept compensation of any kind from companies I review.

Wolf FINS Reviews are intended to be informational and are based on personal opinion. They are not intended to be financial advice, and all readers are encouraged to perform their own due diligence prior to their investment decisions, including discussions with their investment advisor.

Wednesday and Thursday of last week had quite a few smallcaps that I usually cover release their financials. I made a last minute decision on Tuesday to drive six hours to see the Canadiens/Hurricanes game, only to see le Bleu-Blanc et Rouge suffer the type of abuse usually reserved for red-headed stepchildren (sorry gingers).

I absolutely “wolfed” down a giant smoked meat sandwich which was a near sexual experience, so I do apologize to any patrons who were within viewing distance of that display. We also brought home some bagels so the journey wasn’t a total loss.

I missed a lot during the 36 hour trek, so let’s catch up. Three of these four stocks declined on earnings, two of which I warned you about in May’s WWW - What’s Wolf Watching article.

ZoomD Technologies was listed as a Danger Zone stock in back to back WWW articles, dropping 37% on their Q4 earnings, 16% on their recent Q1 for a total of 49% since April 29th. The “momentum” has officially ceased continuing.

They were put in the second Danger Zone after their Q4 experienced a 51% drop in revenue with 93% less net income. In Q1 they faced the daunting task of tougher comps, and with the knowledge of little to no progress on their two largest customers, the writing was clearly on the wall for a disastrous quarter. Anyone telling you differently (some indeed were) simply was just not paying attention.

I did not think it was possible for the company to come up short of my lowly expectations, but that is indeed what occurred in Q1. Not only were they down year over year by 64%, but down sequentially by 9% too. They lost $640k on the bottom line which was their first net loss in the last nine quarters. After their Q3 of 2025, they had generated $24.7M of TTM net income and they have now lost $350k in their last six months.

The one positive to come of of the quarter despite everything, was they produced nearly $900k of operational cash flow. That is of course down 83% from the comparable period, but at least they are not burning cash.

The company may have softened the blow, or at least attempted to by announcing an NCIB for up to 10% of buybacks the day before they dropped these vomit inducing financials. Investors have been clamoring for this for sometime, and the $31M sitting in cash supports such a move. I’m on record as saying that an NCIB would not occur until positive news happened with their two largest customers. I guess now we wait to see how quickly they action it.

With these poor results largely known (again at least to knowledgeable investors), the biggest information to come from these results was going to be the commentary on the call. More specifically, WTF is happening with their two largest customers (Shien and insert your best guess for #2)?

I’m not sure the transcript provides a lot of encouragement, nor clarity. It sounds, at least to me, a strikingly similar message that investors heard during the last two quarters. The sequential decline QoQ further supports this.

Even without these top two customers coming back fully on board, customer concentration of their top five customers remains high. It was 85% at this time last year, but their top five (with last years top two removed) still remains at 66%. As much as we have heard about customer diversification and growth outside the top two, $6.3M of their $9.5M came from their new top five without Shien and last years #2. If you were thinking at these price levels that customer concentration was risk off, I’m not so sure it is. Who’s the new number 1 customer and how much of that 66% do they make up? What if they decide to implement changes to THEIR operating models and KPI’s? Or tweak their software? What then? I think these are fair questions to ask.

In the past two years ZoomD has done an incredible job gaining operational leverage, which I’ve discussed many times. In my five years of performing reviews, they may be the best I’ve seen. But that isn’t what the below portion of the conference call sounds like. This sounds like preparedness for future softness on the top line. Limited visibility is starting to sound like a breakdown in the relationship. We’re talking six plus months here. It feels like someone is getting dicked around. Is it ZOMD, or is it us retail investors?

Of course it’s not all doom and gloom for Zoom. They have over $30M in cash and a current ratio over 4.6. Even while having two disastrous top line quarters, they still remain operationally cash flow positive and are one of the most operationally prudent company’s on the Venture.

They have instituted a buy back program, so we will see how aggressive they are over the next couple of months. I’d much rather see insider buying which has not occurred in the entire slide from $2.75 to under 50 cents. I do know what they did last summer, and that is to take lots of profit off the table. If they ain’t buyin, I ain’t buyin.

Stocks don’t trade on a strong balance sheet or high cash balance. They typically trade on meaningful progress. In the last six months, revenue is down 58% and went from $11M of net income to a $400k net loss. The bad news is the comps get even tougher in Q2 which we will see at the end of August. They are up against their highest revenue ($27.1M) and highest net income ($8.4M) quarter in their history.

I still see things getting worse here before they get better.

NTG Clarity is another stock that was put into back to back Danger Zone’s in my April and May WWW articles. They are down 28% from my April piece and are down 8% since last week’s earnings, decreasing by as much as 14% post Q1.

Unlike ZOMD, they are not hemorrhaging on the top line - in fact they were up 7.5% over the comparable quarter. But they were off by 11% sequentially, a seasonal impact we did not see at this time last year when they grew by 14%. Backlog also fell by $15M or 17% since the end of Q4.

NCI has a host of other issues, but in my view two major ones. The first is their investments in people during 2025 has not paid dividends, partially causing a 100 basis point reduction in gross margin, but more concerning is the 88% increase in G&A spend over the comparable quarter. A 7.5% increase in revenues while receiving lower margin with 88% more operational spending is a terrible combination. As a result, net income was down by more than 50%. But the pure comparable numbers are actually worse than that. They received a $1.6M birdie in income taxes compared to last year and a $260k birdie in forex. Prior to income taxes, net income was $134k vs $3.18M, plummeting by 96%. On an AEBITDA basis (a terrible metric to begin with) they came in at 4% vs their annual guidance of 13-16%.

The good news on that front is despite the above weakness the company did not back off their annual guidance. The company did face some holiday challenges and the current Middle East situation is not doing the company any favours. But let’s remember the annual guidance was pretty soft in most retail investors eyes and they have come out of the gate extremely slowly in Q1.

NTG’s biggest problem remains their cash generation, or lack thereof. They broke even from an operational cash flow standpoint in Q1, but still have burned $3.2M on a TTM basis.

While their current ratio is strong at over 3.1, their liquidity remains highly questionable with their A/R accounting for 78% of their current assets and current cash position not covering their one year liability commitments. If this were a one quarter glimpse, investors would be able to shrug it off. But it is far from that and in my view a systemic problem. Last month I said I felt their announced initiatives surrounding cash flow improvement were not enough and could in fact make things worse through delayed billings and offering extended terms and early payment discounts to top customers.

In Q1, early indications are I was accurate in that assessment as receivables grew by $1M and their aging report worsened.

Perhaps the most troubling part of this is statements like below. Calling it “working capital drag” minimizes what their biggest problem is, and no, they have not shown good results as Adam claims.

In the past two years the company delivered $15M in net income and created zero operational cash flow generation. What they did do in the last two years is raise $14M of capital through dilutive measures during that time. Investors participating in the 2024 raise are down by 45%, and those who participated in 2025 are down 65%. When I see statements like I highlighted below it angers me, as it implies that Adam thinks his investors are stupid.

Harsh? Absolutely, but I don’t feel its without merit. A current or former Wolf Pick is always going to generate more scrutiny. Below is what I said about their balance sheet and receivables TWO YEARS ago and even then it wasn’t the first time I raised these concerns.

Are they a better company than two and a half years ago when they were a 2024 Wolf Pick? Yes. But there are many reasons why they are not as attractive a company as they were at the end of 2024 when they produced $10M of net income on $56M in revenue. TTM revenue may be up by over 50%, but net income has declined by 57%.

2026 growth is now expected to be in the single digits and they are spending nearly double on operating expenses. We are not yet seeing the improved gross margins we were told would happen with the expansion of things like NTG apps, and the all important profitability to cash conversion is one of the worst you will find on the Venture.

I’m more than ready to give them credit when any of that changes, but until they do, I’m just watching.

For further reading I’ve attached Atrium Research’s report update to the image below. Note the downward revisions in their estimates below the revenue line. I think their profitability estimates are still too high.

This one will not be nearly as long as the last two.

Kraken Robotics has tripled in value over the past year and they are a twelve bagger since their 2024 Wolf Pick selection at $0.61, achieving as high as 17x from their 52 week high of $10.74 in March.

The stock is down by 11% since they released their earnings last week however.

Kraken hasn’t traded on traditional fundamentals for a long time and I don’t expect that to change anytime soon. It has traded on a cyclically strong sector, some “goonery” and pump on the OTC side, and most recently an extremely large acquisition.

It’s a good thing for PNG that they do not trade on traditional multiples or fundamentals as their Q1 results were quite poor. Outside of a 35% revenue increase, margins decreased by nearly 600 basis points and operating costs rose by 64%. This caused them to go from $519k of net income last year to nearly a $4M loss this year, and they did so while burning $4.7M of cash vs generating $3.1M last year.

Therefore I’m not about to make an argument in favour of their current $2.3B market cap.

Their $615M acquisition of Covelya is expected to close sometime in June, therefore their Q2 will be about as meaningless as these latest financials. The more important financials will be in Q3 when they report amalgamated numbers, as well as updated guidance from the newly combined entity.

Until the end of Q3 expect to see continued volatility making it attractive to swing traders. I will continue to hold the 20-25% of my initial cheap shares.

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Emerge bucked the trend, at least of the stocks covered in this article, as they leaped by 18% on the release of their earnings.

I bought some ECOM at the end of last summer, added on a dip and sold for a near 100% profit in December. I also retook a position within the Buy Zone listed above from my April WWW article that has yet to bear the same fruit the second time around.

No offense to Emerge, but while journeying back and forth to Montreal last week, they were lower on my priority list. So when I witnessed the 18% bounce on earnings I assumed they would be excellent. But upon further review, I have some questions.

In my Q3 review I cited balance sheet concerns with both their current and quick ratio’s. Those have worsened in the past two quarters with a current ratio of .84 (deferred’s removed) and increasing liquidity concerns with a quick ratio of just .48, as their cash plus receivables total less than half of their one year liability commitments. Even if the $1.2M in convertible debt goes to equity their cash plus A/R still falls about $4.4M short of their twelve month needs. Note this all takes place AFTER the company renegotiated their debt moving it from current to long term liabilities.

They can of course make that up with positive operational cash flow but they burned over $300k operationally during Q1. On the positive side that is half of their burn rate from last year but it does not put a dent in their near term liquidity needs.

On the P&L revenues improved to $5.9M, up 17% from the comparable period with gross margin slipping by nearly 400 basis points from 38.6% to 34.8%. Expenses converted modestly well with 4% additional spending with big savings in Marketing (30%) but offset by much higher SG&A which was up by 15%.

After experiencing 44% higher finance costs on their debt and a $330k bogey to LY in foreign exchange, Emerge suffered a $125k loss compared to a $400k gain.

Based on everything above, the bounce following their earnings I do find somewhat surprising.

The new CFO stated in the call that organic growth was up.

But that doesn’t totally jive with their segmented breakdown which shows declines in both E-commerce segments. Perhaps this is to do with backing out the $405k in other revenue from last year which is non-comparable. Total revenue grew by $879k, and their retail revenue from T2G of $1.33M was not completed until Q2 of last year, therefore I’m showing their organic number shy by $46k YoY.

Next quarter both their E-commerce and retail revenue from T2G will be essentially apples to apples. They will have a new stream of revenue for almost a full quarter for Viral Loops. They did a little over $100k/month in 2025 so the numbers will be small, but are expected to be profitable, cash flow positive and present some potential synergies with taking some marketing costs out of their e-commerce business. The next two quarters are also very big for the golf industry so the organic growth of T2G in their first comparable quarter will be key to watch.

The balance sheet may be just as important to watch going back to their weak liquidity situation. Their $8.15M of payables are all due within the next twelve months in addition to minor debt and lease payments. Their current cash & A/R leaves over a $4M shortfall and $4M of operational cash flow in the next twelve months seems very unachievable. I fully suspect a raise is on the table. This comes after raising $2.6M (net) for the Viral Loops acquisition which had an initial outlay of $2.1M, with $200k additional next March.

Overall, I feel Emerge is priced pretty appropriately here at a $17M market cap being slightly unprofitable on the net income line with a 28 EV/EBITDA ratio and a very real risk of a near to medium term raise. Q2 does present a big opportunity with the Viral Loops synergies and organic growth potential of T2G. Probably a three star performance at best.

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Disclaimer:

My intent is for my reviews to be a bolt on to due diligence that you have already completed. I receive dozens of review requests a week, therefore my own DD may be great or none whatsoever. Unless otherwise stated or implied, my opinions are on the financial performance of the company based on their most recent filings. I conduct these reviews to assist other retail investors whose research skills are limited when it comes to reviewing financial statements. I do not accept compensation of any kind from companies I review.

Wolf FINS Reviews are intended to be informational and are based on personal opinion. They are not intended to be financial advice, and all readers are encouraged to perform their own due diligence prior to their investment decisions, including discussions with their investment advisor.

The cannabis/nutraceutical hybrid. The big swing that hasn’t swung. The nickel humper.

My first review of Glow Lifetech was exactly one year ago after their Q1 of 2025. Then, they were a year removed from a cease trade order for three months for failure to file their annual financials. They have come a long way in that two year span going from some dreadful float management and next to no revenue, to a little over $2M in 2025 via posting 200% revenue increases for five straight quarters. That streak came to an end in Q4 when they posted a measly 53% revenue increase (read that with sarcasm).

A year ago the stock traded at six cents. I awarded them an unimpressive two stars in my first look, in large part due to their warrant overhang. They had 170M shares outstanding with over 70M warrants, 60M of which were ITM at the time. Over this past year the stock is down 17% off that review and currently trading at, you guessed it, a nickel.

November of last year is when I first began talking about a potential swing opportunity, but calling them “dead money” until the March/April timeframe, and the stock has largely traded in the 4.5 - 5.5 cent range since.

I cited three potential catalysts in the April/May timeframe for a potential swing. I felt so good about it that I listed it as a bonus opportunity in my 2026 Wolf Pick article, and yes took an eventual position too. The first catalyst was the last large batch of ITM warrants (40M) from last year, and the last two would be their annual financials and then their Q1 of 2026.

Two of those catalysts have now come and gone. About three quarters of those warrants expired unexercised and while their April year end financials received nearly a full star upgrade to 2.75 stars, the share price has been anchored to that nickel area once again.

While Glow did have some much improved financials and less warrant overhang at the end of 2025, their QoQ financials were very soft for the first time, down 19% despite being better by 53% on a YoY basis. That gave the market some pause, and when you combine that with the fact that most of the sector has been stuck in a quagmire, the nickel hump continued.

Last night the last of those three potential catalysts I’ve been discussing for sometime were released to the market. Are these financials the catalyst to complete that swing, or is it a three strikes and you’re out scenario here?

Balance Sheet:

Some small overall numbers here as one would expect from a $9.6M market cap, but impressive nonetheless with a current ratio of 2.7.

At quarter end they had $1.6M in cash, $570k in A/R, $470k worth of inventory, $150k of prepaids and $160k in loan receivables overtop of just $1.1M in current liabilities. That’s also their total liabilities as the company holds zero debt or long term financial commitments.

It’s both a healthy and liquid balance sheet as just their cash position alone is over 1.5x this years current needs.

Unfortunately the company discloses no aging report to gauge the health of their receivables. The loan receivable mentioned refers to a loan agreement with a subsidiary of one of their largest shareholders (Swiss PharmaCan). The loan is satisfied through royalty payments for MyCell™ products. In addition to the $160k listed in short term assets, an additional $380k sits in long term assets.

Solid start and an improvement YoY from my initial review.

Cash Flow:

Glow was operationally cash flow neutral in 2025 with just $15k of OCF burn in their recent fiscal year. Here in Q1 of ‘26 they experienced operational burn of $317k, approximately double the burn from the comparable quarter.

That burn however is due to working capital adjustments all going the wrong way, increases in A/R and inventory investments, and paying down payables and increasing prepaids.

Prior to working capital adjustments they performed better by $80k. I’m still willing to call them operationally cash flow neutral, as this is more than likely going to balance out in a quarter or two. With that said, I’d still like to see that aging report.

Share Capital:

• 192.2M shares outstanding, representing 13% dilution over the past year and 6% in just Q1 due to the near 11M warrants recently exercised

• 11.3M options outstanding with over 5M expiring unexercised in Q1, unsurprising at 30 cents. 4.5M sit on the bubble at five cents but do not expire until Sept 2029

• 8.9M warrants expiring this week at seven cents, most likely expiring unexercised unless something crazy happens this week

• Insider ownership listed at 28% per the company investor deck

• Modest insider buying in the open market but both insiders and their top shareholder (UK based Nova Capital) have been exercising warrants at the current share price)

Income Statement:

Glow Lifetech set a new quarterly revenue record with $643k in Q1, 35% better than a year ago. Gross margins declined by 230 basis points from 66.5% to 64.2%, but still a very healthy margin in this sector and that resulted in 30% more gross profit on those 35% more sales.

Glow achieved some very healthy operational leverage in the quarter with total expenses rising by only 4%, well under the rate of revenue and GP improvements.

That all translates to cutting their operational losses by more than half. After a few minor birdies to last year below the operational income line, their total net loss was $59k, a 60% improvement over a year ago.

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Summary:

Some solid improvement, and a much improved company from when I looked at them first one year ago. Revenue is moving in the right direction again after a hiccup last quarter, they have very sexy margins, run operationally lean and their cap table is cleaned up and more attractive than it has ever been.

The CEO also bats above his weight relative to the company’s market cap. For more on him, here is a recent interview from last week hosted by Smallcap Discoveries Paul Andreola.

But did Glow Lifetech do enough in this quarter (my last of three spring catalysts) to move the stock away from a nickel and give them a re-rate above their current $9.6M market cap?

I hate to say it as someone who has been holding a swing position for the last few months, but I don’t think so.

If you have been following Glow for sometime, you are aware of this chart that they have been using quarterly for sometime. It shows the number of distribution points (sku’s x locations) along side their quarterly revenue totals. The comparison of their distribution points vs their revenue may be starting to show some stagnation. That previous Q3 revenue record still looms large as this recent quarter only exceeded it by 2% with over 1000 more “distribution points”.

(The full investor deck is attached to the image below)

While Glow isn’t your typical cannabis play as they expand into nutraceutical verticals, the best comps we have are in the Canadian cannabis sector. When you look at those comparables, I think it is hard to make the case that Glow should be valued significantly higher than the multiples it trades at today.

Glow trades around 4.5x revenue, but on a TTM basis has yet to turn a profit on the Net Income or EBITDA lines. Looking at three other sector plays I’ve covered heavily in the past (LOVE/ROMJ/XLY), none trade higher than a 1.5x P/S ratio.

Auxly Cannabis (XLY), who’s management team I couldn’t trust as far as I could throw them are one of those that trade at 1.5x revenue. They also put over 20% of each revenue dollar on the net income line and trade at under a 7 P/E ratio. If they have traded flat over the last eleven months, it’s hard to make the case for significant share appreciation here.

So despite an upgrade to three stars to these financials, when it comes to my three spring catalysts for a great swing opportunity - I’m ringing them up on a called strike three. Get that nickel some KY jelly for some additional humping.

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Disclaimer:

My intent is for my reviews to be a bolt on to due diligence that you have already completed. I receive dozens of review requests a week, therefore my own DD may be great or none whatsoever. Unless otherwise stated or implied, my opinions are on the financial performance of the company based on their most recent filings. I conduct these reviews to assist other retail investors whose research skills are limited when it comes to reviewing financial statements. I do not accept compensation of any kind from companies I review.

Wolf FINS Reviews are intended to be informational and are based on personal opinion. They are not intended to be financial advice, and all readers are encouraged to perform their own due diligence prior to their investment decisions, including discussions with their investment advisor.

The dreaded quiet, un-announced Friday after hours earnings drop. When I saw the alert around 5 pm on Friday, my first thought was “uh-oh”.

The 2026 Wolf Pick had been up 16% leading into today’s trading session but these results do bring into question whether the stock can hold those gains.

No need for a long preamble, as it will be a busy earnings week. Let’s get into the review.

Balance Sheet:

Atlas’ current ratio remains solid at 1.6 but that doesn’t tell the whole liquidity story. The company has dipped into their LOC leaving them cashless at the end of Q1 with $6M in receivables, another $4M in federal grants receivable, $10.2M worth of inventory and $1.8M in other short term assets over top of $14.1M in liabilities due over the next twelve months.

The company has $19.1M of debt with $5.1M current. $3.1M of which is from their TD term loans and mortgages with $2M additional on the pre mentioned line of credit.

We will see more of the impact of this on the cash flow statement but the company appears to have pushed through an amount of spending required in order to be eligible for that $4M federal grant.

Cash Flow:

Despite the poor results elsewhere, Atlas generated $1.4M of operational cash flow in the quarter while ending the period with a donut on the balance sheet. This was highly influenced by working capital changes including a good collections quarter.

They utilized $4.7M in investments to meet that federal grant threshold. In order to fund that they dipped into their LOC for $2M thereby increasing their net debt burden in Q1 by $1.3M. Unsurprisingly the buybacks under their NCIB did not continue.

The quicker they receive those federal funds, the better their liquidity can recover.

Share Capital:

• 70.3M shares outstanding - company has had zero dilution over the past two years due to buying back approximately 300k

• 3.2M options outstanding. 250k exercised at 29 cents post financials. 2.5M remain out of the money.

• 15% insider ownership with BMO asset management as the largest institutional and overall shareholder at 10.1%

• Insider buying in the fall of 2025 with options exercised post financials.

Income Statement:

There is not a lot of positivity within this P&L. Revenue was down over the comparable period by 15.5% and margins were almost non existent, coming in very skinny at just 3% compared to 16% last year. Gross profit dollars only amounted to $273k, down by 84%.

Operating expenses were down 1.5% but not nearly enough to recoup the terrible numbers above.

The company did have a $400k birdie in tax recoveries which limited their net loss to $1.73M in the quarter, just about double the $846k they suffered in the first quarter of last year.

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Summary:

I cited anything near 56 cent support as a buy zone opportunity in my May WWW and that dip never happened, instead the stock shot up 13%.

An hour into today’s trading session the stock is only down a penny, or 1.5% which is not as big of a decline as I was expecting on these numbers.

The news release this morning accompanying the Friday results lists a whole host of rationale for the poorer than expected (mine) results.

Severe winter weather in the largest markets of BC and Ontario were listed among the biggest contributors. Unlike previous years where I headed south for the winter I can vouch for how bad it was. For the revenue they did receive, it appears they bought given it came in just above cost.

Their outlook remains quite positive and orders were up over 90% in the quarter with bidding continuing to be quite strong which may speak to potentially better overall macro conditions. The new robotics facility in Ontario is very near completion and should be operational early in Q3. While their balance sheet does not currently support obvious M&A activity, they are continuing exploring opportunities as the industry deals with historically low EBITDA multiples, and they do have a history of acquiring businesses at attractive multiples. Doing so in the near term appears it would have to occur through dilutionary measures or debt.

Aside from the poor numbers, they listed another faux pas in their news release listing their earnings call date from their April annual filings. Therefore I do not know if they will be holding one for later this week. I’ve reached out to the CEO for clarification.

Have to downgrade them to 2.75 here, but I feel pretty good about awarding them something higher in future quarters.

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Disclaimer:

My intent is for my reviews to be a bolt on to due diligence that you have already completed. I receive dozens of review requests a week, therefore my own DD may be great or none whatsoever. Unless otherwise stated or implied, my opinions are on the financial performance of the company based on their most recent filings. I conduct these reviews to assist other retail investors whose research skills are limited when it comes to reviewing financial statements. I do not accept compensation of any kind from company’s I review.

Wolf FINS Reviews are intended to be informational and are based on personal opinion. They are not intended to be financial advice, and all readers are encouraged to perform their own due diligence prior to their investment decisions, including discussions with their investment advisor.

How time flies! It’s been over two years since my review of Grey Wolf, and you’d think it would have been a more regular occurrence given their ticker.

I first reviewed WOLF back in Jan of 2024 and gave them an encouraging 3.5 stars. The market liked it too sending the stock up 33% within a few trading sessions. A quarter later in April I downgraded them and by August they had lost 40% of their value.

As a result of that downgrade they went into my ignore pile. The Wolf ignoring WOLF has turned out to be a bad idea as the company is up 170% since those August 2024 lows and 74% over the past twelve months.

Looking at their 2025 overall numbers that appears to make sense with a 33% revenue increase and 135% growth in net income. Their $56M valuation has them trading at a 32 P/E, 10.5 EV/EBITDA, 13.5x cash flow but a rather unimpressive 3.3% return on invested capital.

Grey Wolf released their financials after close on Thursday and Friday the stock traded a little better than flat, up a penny or .61% to close at a buck sixty five.

In addition to operating two pharmacies, a 25k sq ft facility in Manitoba and another in Ontario set to expand in 2027 from 10k to 28k square feet, the company also sells, markets and distributes products to veterinary clinics across the country. I’ve linked the entire presentation to the image below to learn more about them. As you can see both of their segments deliver very healthy margins and both had Q1 growth with the pharmacy business up by 5.6% and Animal Health revenue by 13.8%.

Grey Wolf Animal Health has a proposed name change in the works to become Grey Wolf Health as it better recognizes their pharmacy services to both animals and humans.

Let’s dive into their financials and other information to see if there is anything to howl about.

(Free version will be delivered to free subscribers on May 29th)

Balance Sheet:

Grey Wolf possesses a very solid current ratio of over 2.6 that consists of $8.8M in cash, $2M of receivables, $5.3M worth of inventory and $550k in prepaids overtop of just $6.3M of liabilities due over their next twelve months.

Their cash position covers all of those liabilities showing excellent short term liquidity. The company does not provide any detail on their receivables including an aging report but it is down from the end of the year and I couldn’t find any history of large write downs.

Grey Wolf does have some debt, $24.6M in fact which is a bit of an eye opener given that figure is about 44% of their total market cap.

Unfortunately you have to go back to their annual financials to obtain the details on the above loans. From left to right the first loan is what remains on a $11.5M loan at an attractive 4%. Next is what remains on a $14.3M loan which occurred in November of 2024 to partially fund the CPM acquisition. This loan carries a rate of 7.09% and ends in 2030. The last is a $4.4M five year mortgage used for the land and buildings of the CPM acquisition and carries the same 7.09% rate.

In addition, the company has a $750k untapped line of credit with RBC, and $4.5M in deferred tax liabilities.

Cash Flow:

Grey Wolf achieved $1.53M of operational cash flow in their first quarter of 2026, 45% more than what they achieved in the comparable quarter, notable with very minimal working capital adjustment assistance.

They utilized $127k in the quarter on hard assets, received $249k from option exercises and paid half million worth of debt payments.

Overall, they improved their cash position in the first three months of the year by 14% or $1.1M.

Encouraging so far.

Share Capital:

• 34.5M shares with under 1% dilution in the past year from options being exercised

• 192k broker warrants expiring in three weeks. They just sit out of the money by two cents at $1.67

• 2M options outstanding. 1.57M are ITM with none expiring within the next year

• Insider and Employee ownership of 24% (per investor deck). Bloom Burton & Co is the largest shareholder owning 10.5%.

• Small open market buying by four different insiders last June, but totaling just 58k shares

• It’s notable that the company adopted a RSU plan for the first time in May of 2025 (a 10% SBC plan) but gave out their first RSUs last month - a rather negligible amount.

Income Statement:

Revenue grew in Q1 to $8.75M, a 10.5% increase over the comparable period. Gross margin improved by 150 basis points to 54.1% which drove higher gross profit dollars by 13.5%.

Total operating expenses grew by 11% at a slightly higher rate than revenue with their two main cash burning buckets, Sales and Marketing and G&A growing by 25% and 13% respectively. That will leave them one segment shy of achieving a Wolf Trifecta in Q1.

Operations Income grew by 31% to $683k or a ratio of 7.8%. Below that line is where their debt becomes a factor as the $438k in interest expense in Q1 makes up 64% of their operating income. After paying 133% more taxes YoY, their net income was $145k, 1.7% of revenue, but over 5x what they achieved in Q1 of last year.

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Summary:

I think the 170% increase in valuation over the past twenty or so months has been deserved. But how much upside remains is the big question.

Their pharmacy segment has been the driver of their growth story going over 10x since 2021 on a TTM basis, and 58% since 2024 while the Animal Health segment grew by 11%. Their new Ontario facility will nearly triple that facilities footprint next year which should support further growth.

The company is very quiet in the press release department, only putting out five news releases in the last nine months - three of them earnings calls, therefore it is challenging to be up to speed on what the company is up to.

One of their press releases was in regards to their participation at Smallcap Discoveries last year. I’ve included the presentation below, and maybe that will assist it getting more than the sub 200 views it has currently.

Animal Health and pharmaceutical compounding do not seem like seasonal types of businesses, but it’s notable that WOLF’s revenue and profitability have declined for three straight quarters. They will be up against much more challenging numbers in the quarters ahead without the benefit of their big acquisition they had at the end of 2024 which drove 30%+ growth for four earnings straight.

Their next two quarters represent nearly 75% of their profitability comps, so with a 32 P/E, it feels like a risky time to give Wolf a swing here. They will also be facing some increased costs without the benefit of revenue due to the new buildout of their Ontario facility.

There is some small regret for putting them on my ignore list, perhaps too abruptly a couple of years ago. But these comparables do not make me want to make up for lost time with a position here just yet.

Very watchlist worthy. 3.25 stars.

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Disclaimer:

My intent is for my reviews to be a bolt on to due diligence that you have already completed. I receive dozens of review requests a week, therefore my own DD may be great or none whatsoever. Unless otherwise stated or implied, my opinions are on the financial performance of the company based on their most recent filings. I conduct these reviews to assist other retail investors whose research skills are limited when it comes to reviewing financial statements. I do not accept compensation of any kind from companies I review.

Wolf FINS Reviews are intended to be informational and are based on personal opinion. They are not intended to be financial advice, and all readers are encouraged to perform their own due diligence prior to their investment decisions, including discussions with their investment advisor.

We are less than a month from my upgraded Q4 FINS review as the company is already out with their first quarter of 2026.

Back in February, I announced Biorem as my first mid-year pick of 2026 and it was certainly one of my higher conviction plays recently. I identified an important six week window between their Q4 and Q1 releases where their would be an opportunity for some rather significant share price appreciation. With this early FINS release, that window has shrunk to four.

As of this morning, Biorem is up 38% from the February Seal of Approval pick, and just 17 cents shy of the $3.73 price target I set at the time.

What I had wondered back in February is if their Q1 financials would turn into a “sell the news” event. I felt that depended on if they could re-fill that backlog along with the anticipated revenue increases they would have over their first three quarters.

Their earnings headlines do indeed suggest a new record backlog, so does this now turn into a longer term hold? Let’s dive in.

(Free release scheduled for May 21st)

Balance Sheet:

Biorem has improved their current ratio over their last two quarters, now sitting at 3.3 with deferred’s removed. That is made up of $10M in cash, $9.3M of receivables, $2.9M of revenue to be billed, $2.4M worth of inventory and $4.3M in prepaid expenses. All of that overtop of just $8.7M of liability commitments due over the course of the next twelve months. Those commitments are easily covered by their cash balance alone, therefore showing very good liquidity.

BRM has $1.1 M in debt at an attractive 4% interest rate and an unused $3M line of credit.

Cash Flow:

A slight hiccup here with $1.13M of operational cash burn during their first quarter, which compares to $4.7M of positive cash flow last year.

Given the large working capital swings I have zero concerns with the burn or variance to last year. They reduced their A/P by 43% in the quarter and had a significant 73% increase in their prepaids during their historical softest revenue quarter. I would anticipate this will reverse next quarter.

They made minor asset investments of $271k and paid down their debt by $147k in the quarter. Overall their cash depleted by 10% in their first three months but I would anticipate a rebound in Q2.

Share Capital:

• A very tight float of just 16.1M shares outstanding, with virtually no dilution last year

• 3.3M options outstanding, all well ITM with 2.3M expiring in early 2027. Only 50k new options were granted in 2025

• Announced an NCIB in June. Bought back a limited number of shares over a few week period in September. Not much of a commitment here - more like a game of just the tip to see how it feels.

• Limited insider ownership of just 2%. Minor insider buying last May

Income Statement:

Revenues in Q1 came in at $6.8M, an impressive 44% jump over the same period last year, although well shy of their eye popping record Q4 of just under $17M. Gross margins were 300 basis lower at 20.4% vs 23.4% which generated 26% more gross profit dollars than last year.

Total operating expenses were just 6.7% higher on 44% more revenues, but with 34% more spending on Sales and Marketing. Overall some very good conversion which carries down to the Net Income line which delivered $201k of profitability which is more than 5x than last year.

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Summary:

A pretty short review but Biorem has some relatively simple financials and they contain zero red flags or major concerns to highlight.

The biggest question to answer is what’s next and do they have additional upside from the 51% appreciation in share price since their low in mid January. First let’s look back on what I said back in February when I listed a price target of $3.73.

TTM revenue has fallen short of my $50M target, coming in at $44.4M, but the good news is I nailed their net income figure which came in at $4.94M. But given that the company had order intake of $18.7M increasing their backlog to a record $77M offsets that prediction miss from the top line IMO.

When I issued the mid year pick, the company had $71M of backlog which now sits at $77M. At the time, the CEO anticipated that 75% of that number ($53.3M) was expected to be achieved in the next four quarters. At the halfway point of that prediction they achieved $23.8M, leaving $29.5M to potentially be recognized over the next six months. Using the comps above (up against $21.7M in Q2 = Q3), that suggests the potential to beat the next two quarters by 36%.

Biorem has now produced 11 straight quarters of positive net income. That certainly helps to withstand some of the lumpiness of their revenue. When a company can produce profitability whether their revenue is as low as $4.7M, as we saw last year in Q1, or as high as $16.9M as we did in Q4, it really speaks to the operational excellence of the leadership team. My biggest question leading into this quarter was could their sales team refill that backlog. They did that and then some achieving another record of $77M and that is 1.5x of my anticipated Q3 TTM estimate. That supports the additional marketing spend this quarter as well.

For me they answered my biggest questions coming into these numbers. For me, it’s changed from a sell the news event in May to a longer term hold.

I’m also upgrading them for the second consecutive review to 4 stars.

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Disclaimer:

My intent is for my reviews to be a bolt on to due diligence that you have already completed. I receive dozens of review requests a week, therefore my own DD may be great or none whatsoever. Unless otherwise stated or implied, my opinions are on the financial performance of the company based on their most recent filings. I conduct these reviews to assist other retail investors whose research skills are limited when it comes to reviewing financial statements. I do not accept compensation of any kind from company’s I review.

Wolf FINS Reviews are intended to be informational and are based on personal opinion. They are not intended to be financial advice, and all readers are encouraged to perform their own due diligence prior to their investment decisions, including discussions with their investment advisor.

After years of doing this, you think I would know better by now than to comment immediately on socials and bulletin boards when financials drop. The argument can be made that I should probably refrain from doing so all together. Will I ever change? Not a chance.

If you read my “Mother of Reviews” article released on Mother’s Day, than you’re aware that I had some concerns regarding the QoQ Q4 revenue numbers for Happy Belly. My initial glance Tuesday night at the Q1 financials had a similar feel and that seemed to have set off a bit of permabulls - one of my favourite pastimes.

I’m almost 100% certain that I have written more reviews on Happy Belly than any other stock, reviewing every quarter since early 2022. In November of that year, they received my first upgrade when the stock traded at 8 cents and was under a $9M market cap. A month later they were included in my first ever batch of Wolf Picks when the stock traded at a dime.

So much time has passed that showing a five year weekly chart is now a relevant endeavour. Today they sit 20x higher from that upgrade and more than a 15 bagger from the Wolf Pick with a market cap approaching a quarter billion dollars.

A large part of the bull case back then remains the same - the bet on the jockey, and the team striving to do something they had done with some degree of success before. That stir the other night resulted in some chatting with that lead jockey, Sean Black yesterday morning.

Many likely don’t realize that I’ve been in a similar chair as Sean is today in taking a brand from zero dealer/franchise businesses to over 250 within a decade. I know what it’s like to have accountability for revenue and profitability numbers and having someone with only macro visibility into the business slice and dice my numbers. Let’s just say Sean handles this better now than I did back then.

At the same time that isn’t going to change the critical lens that I review all financials with. Wolf Picks, and those I hold larger positions in will always get an extra dose of scrutiny. If my neighbours kid received a “C” in Social Studies, I’d say “Way to go little buddy”. If it’s my kid, they’d get grounded for a week.

If you’re a reader of mine, I would hope you would want it that way. If not, I have bad news for you.

Let’s get more granular into Happy Belly’s Q1.

Balance Sheet:

A big improvement in the company’s balance sheet Q1 over Q4, now sporting a current ratio of 2.2 consisting of $6.2M in cash, $2.4M of receivables and $700k in other short term assets overtop of just $4.3M in liability commitments (deferred revenue removed) over the next twelve months.

The biggest difference QoQ is their strengthened cash position and I’ll touch on the why in the next section. The end result is much improved liquidity with just the company’s cash position at 1.4x current liabilities compared to only .65x a quarter ago.

I have been keeping an eye on their A/R over time and I don’t feel I’ve addressed it in a review yet, but it does appear to have the beginnings of something to be mildly concerned about. Less than half of their receivables are current with a third over 90 days past due. A quarter of the 90 days plus is booked as potential losses. In this model I would expect the bulk of their A/R to be from franchise fees and royalties. So, this certainly is something to monitor as it is very important to cash flow and franchisee health. The company also mentions “other receivables” from investors but those amounts do not appear to be broken down in the financials or MD&A. If those are material amounts, disclosure needs to be better.

HBFG has $1.4M of debt in the form of convertible debentures. The remaining debentures all stem from Feb 2024. The holder of the debentures has the option of cash or shares and since the conversion price is $0.50 look for them to be converted to shares in Feb of 2027 or earlier. Since that is less than 12 months from the end date of this quarter, I believe these amounts are incorrectly stated under long term liabilities.

Cash Flow:

For the second straight quarter we have operational cash flow comparisons going the wrong way with $940k of cash burn vs $156k last year. Much of that variance is due to working capital adjustments. Most of those adjustments are from the previously mentioned accounts receivable, making that aging report more important to review in future quarters.

The influx in cash in Q1 came both through investing and financing activities. In February, Happy Belly sold their Holy Crap cereal CPG brand. It was an excellent brand but I think exiting their CPG segment to focus on QSR was the appropriate step in their growth journey. Getting $1M for it feels like a good return as well.

The company also received over $3.7M into the treasury through warrant and option exercises. That is a nice segue into the next section.

Share Capital:

• 148.2M shares outstanding representing 10% dilution this quarter and 15% dilution over the past five quarters.

• All of Q1 dilution stemmed from exercising warrants and options

• 31.9M warrants outstanding with 14M well ITM at 20 cents and expiring in just over a month. All remaining warrants are at $2 and will be vested on future share price targets. See their news release from November or one of my previous reviews for more details

• 16.9M options. The most recent 12.1M have similar vesting triggers as the recently mentioned warrants

• 3.2M options also expire next month ranging from 40 cents to $1.14.

• With all of the options and warrants exercised I have insider ownership around 27% but with all of the recent activity that may not be 100% accurate. Let’s call it ballpark

Insiders have also been regular buyers in the open market for years, more so than any other stock I have ever covered. Insiders have however been performing some cross trades to sell shares in order to exercise their numerous performance warrants and options. I anticipate we will see a lot more of this in the next month with a staggering 14M warrants and 3.2M options expiring in less than five weeks. This would bring approximately $5.4M into the treasury increasing their cash position by 87% from where it is today - it’s significant. The value of these shares is worth well over $25M so there is a lot of profitability on the table for the holders of those warrants and options. Therefore expect some insider selling on the horizon.

That will take the float to approximately 165.5M shares by the time we see the company’s second quarter. That’s an additional 12% dilution from today giving an implied market cap of about $260M.

Let me say if you have issues with the dilution you haven’t been paying attention to this story. Insiders were rewarded for share price performance, and the influx’s of capital will largely come from them to support future growth. I’d much rather have it this way than your typical private placement. Given that big push to get the stock to $2 is why I sold some and above that number and re-purchased them at $1.50.

Income Statement:

There are a lot of YoY and QoQ numbers to get through. There is no question the YoY numbers are tremendous. Firstly is purely the number of units up by 74% from where they ended Q1 a year ago, going from 50 QSR locations to 87 at the end of March. I’m sorry to say the company did get a couple of figures (percentages) wrong in their MD&A and news release.

Product Sales rose by 70%, not the 101% as stated in the MD&A, and Royalties and Fees rose by 151%, not the 118% as stated in their earnings news release. QSR system sales rose by 76% to $19.25M. That is a 14% increase on a QoQ basis but just better than flat when compared to Q3 of 2025 on 19% more restaurants. Total revenues rose by 82% over the comparable quarter.

Gross margins, while not a specific P&L line, took a rather substantial hit for the second straight quarter coming in at 45%. There are some seasonality impacts with additional costs (Uber Eats), but I think it’s a large miss by not addressing the margin line whatsoever within the MD&A. Gross margin dollars rose by less than 40% on 70% more product sales and 74% more stores and that was the biggest contributor for the quarter’s weak cash flow.

I’m overall aligned with the company’s SBC strategy that rewards insiders based on share price as it sets up a win/win situation with shareholders, therefore I’m not concerned with the high costs seen this quarter. Firstly, it was expected. Secondly, they are non cash burning.

With SBC costs and depreciation stripped out of operating expenses, cash burning expenses rose by 97%, and that is a bad combination when only 40% more gross profit dollars were generated. Again with SBC removed, net losses amounted to $681k in the quarter, and that is about 3.8x worse than a year ago.

Summary:

Did the quarter live up to my expectations? No. Is it a disaster? Also, no.

Seasonality variances within Heal given their products they sell and the fact make up the largest portions of total restaurants are a huge factor here. I was surprised to learn from Sean about the seasonality impacts of brands like Rosie’s and Yolks. The fact the company announced and delivered Q1 well before the deadline also factored into not meeting what I had expected.

So, if you are willing to accept the above rationale for only matching off 2025 Q3 in this most recent quarter, that just amplifies investor expectations for seasonably better quarters of Q2 and Q3.

What the company is doing exceptionally well is expansion, and by the time we review their Q2 financials, their store count will almost certainly exceed 100 locations. That justifies some of the additional costs we have seen in the last two quarters. By the end of next quarter with the warrants and options earlier, they should be well capitalized to support continued growth.

The concerns and things to watch out for are just as numerous as their strengths however.

If we accept the new seasonality situation, that is going to present cash flow challenges. That requires discipline and execution, and those concerns increase with mentions in the MD&A about understaffing in the accounting department. The unfortunate passing of their CFO last year had to have been a major contributing factor. They have done some recent hiring to help fill the gap with their new CFO still coming up to speed. That understaffing may be showing given the rather simple errors mentioned earlier, and could be contributing to their growing A/R and poor aging report.

Those seasonality challenges also extend to the franchise network - probably more so. To be a successful franchisor, you need healthy franchisees. I can tell you from experience that many franchisee’s weaknesses come on the operations side, and managing their own cash flow is a big part of that. I could do an entire article on this topic.

Given the above, operational support to that growing network is key. Given they are currently operating more than ten brands, that makes that challenges larger. Maintaining brand standards, marketing and operating support and infrastructure across ten brands with a massive geographical footprint is much more daunting than I think the average retail investor realizes. The number of brands and those geography challenges will grow this quarter with the acquisition of Ghost Taco scheduled to close shortly, as well as the first Heal location in Texas.

Then there are the brands that have been slow out of the gate. Lettuce Love, Pirho and Joey Turks really haven’t been part of any news flow in a very long time. I discussed this in more length in my Q3 review.

Lastly is the $260M valuation (including upcoming dilution at today’s share price). They still need to grow into that figure as one would be hard pressed to justify that number today. Can they do it? I believe they can, but it will not be without a number of challenges and obstacles.

Sticking with my three star rating from last week. Cue up David Bowie and Freddie Mercury. Pressure is on for Q2.

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Disclaimer:

My intent is for my reviews to be a bolt on to due diligence that you have already completed. I receive dozens of review requests a week, therefore my own DD may be great or none whatsoever. Unless otherwise stated or implied, my opinions are on the financial performance of the company based on their most recent filings. I conduct these reviews to assist other retail investors whose research skills are limited when it comes to reviewing financial statements. I do not accept compensation of any kind from company’s I review.

Wolf FINS Reviews are intended to be informational and are based on personal opinion. They are not intended to be financial advice, and all readers are encouraged to perform their own due diligence prior to their investment decisions, including discussions with their investment advisor.

That sent the stock soaring, resulting in the 10th Wolf Pick in the last three years to hit three bagger status. The stock had a significant pull back yesterday leading into these numbers, nearly by 12%. There wasn’t any detail provided below the revenue line so it’s likely some jittery investors took some profits in case the rest of the numbers didn’t live up to the high expectations.

Up against some time constraints today, so let’s dive right into the numbers.

Balance Sheet:

iFabric maintained a current ratio of 1.8 after Q1 consisting of just $1.8M in cash, $25.5M worth of receivables, $16.8M worth of inventory and $1.3M in other short term assets overtop of $25.3M in liabilities due over the next twelve months.

As you would expect with a nearly 300% revenue increase, A/R grew substantially and we will likely see a negative looking cash flow statement as a result. The company apparently only issues an aging report with their annual filings, but I can say when that was reviewed less than two months ago, it was one of the most impeccable ones I’ve reviewed.

Inventory values only depleted by 20% on all of that revenue and I expected that number to be greater. The company did however increase their scrubs program in Walmart to 1,000 additional stores later in the quarter, so that is likely related.

Liquidity therefore does not look very strong with their cash plus receivables just covering their one year financials commitments, with the A/R portion of that totaling 94%.

iFabric has $12.9M worth of debt, all classified as short term. A good portion of this debt was used to front the significant inventory ramp up in order to support their new programs in Walmart and Costco.

They also have a $3.6M bank loan which I made an incorrect statement on in my last review. I suggested the loan was listed as current due to a covenant of the loan being missed which was later resolved. While that was true the reasoning for the loan being listed that way was due to a “payable on demand” feature in the loan despite it being a long term mortgage. Thanks to the company reps for reaching out to me to clarify.

Cash Flow:

As expected, their Q1 operational cash flow does not look great showing $4.7M worth of operational cash burn compared with generating $3.4M in the comparable quarter.

This is all due to their accounts receivables growth of $15.6M within working capital adjustments. As you can see, prior to working capital changes, their OCF was $4.5M vs just $300k a year ago.

Had this been another scenario where the company was selling to unknown clients, it could be cause for some concern. Since the vast majority of their receivables are with highly reputable retailers, and given their A/R management has been excellent in the past, I feel this will reverse rather quickly with a large stream of cash in the next couple of quarters.

The company increased debt by $2.6M in the quarter to support their growth. Overall their cash depleted rather sharply in the quarter by 58%. Look for a big rebound here in Q2.

Share Capital:

• 30.3M shares outstanding. identical number from one year ago in a historically well managed float

• 1.9M options outstanding, all ITM

• Zero warrants with all 2.9M outstanding last year, expiring unexercised.

• 66% insider ownership including 63% from President & CEO Hylton Karon although historically allergic to transactions on the open market

Income Statement:

These financials are the equivalent of an NBA player getting posterized. They slam dunked these financials on the market, while tea-bagging their competitions faces.

Clearly the statement I was looking to review most to ensure the company delivered underneath those record revenue numbers.

Those Q1 revenues came in at $27.5M, a half million more than the high end of their upped estimate of $27M at the end of March. That compares to just $7.1M last year for a 288% increase. Those revenues did come at the expense of some margin due to product mix and entering into big agreement with one of the world most cutthroat buying groups - Walmart. Their margin rate slipped by over 600 basis points to 32.5%. Gross profit dollars increased by 227%.

They gained a lot of operational leverage in the quarter which was what I wanted to see. G&A expense rose by 20%, while selling costs (highly commission based) rose by 135%.

Earnings from operations rose to $4.9M in the quarter against just $115k last year. Even after an expected much higher tax burden they still drove $3.7M to the net income line, 41x more than the $88k last year.

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Summary:

That $3.7M in profitability in just their first quarter is higher than any YEAR in the company’s history, and the quarterly revenue figure is 84% of what they achieved all of last year, two huge reasons why the stock is up by 150% since my 2026 Wolf Pick and 275% up from a year ago.

While investors were counting on huge numbers from their intelligent fabrics division, it shouldn’t be overlooked that the Coconut Grove (or intimates) division also achieved massive numbers of a 212% increase.

I guess the big question now is what the company does now for an encore, and how the rest of the year will shape up.

I’ve attached Atrium Research’s initiation report to the image above. It is a very good basis to start your research for anyone new to iFabric, but I will say I think they did a terrible job on the numbers portion which I pointed out in the Wolf Den discord upon it’s release. They really missed the boat on the expense lines, particularly their G&A costs estimating $5M in Q1 which came in under $1.9M. The selling costs numbers for the balance of the year also look light. All of that translated to the bottom line beating their estimates by $3.1M on the Net income line. This actually could have translated into investors selling into the news for today IMO.

To extend your due diligence the company has also updated their investor deck for 2026. Attached below

To better understand how the rest of the year might shake out, the company will be hosting a webinar with Adelaide Capital on Thursday. You can register by clicking the link below.

Until we know whether the company will continue to provide guidance or if Q1 was a one time deal, it is really hard to peg a potential valuation. I think $70M in revenue with $8M in net income is achievable which would put them at a 14 forward P/E with tremendous growth potential. I reserve the right to adjust that thinking on Thursday.

Upgrading iFabric to 3.5 stars with the potential room for a lot more once their cash flow flips, and I am expecting it will.

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Disclaimer:

My intent is for my reviews to be a bolt on to due diligence that you have already completed. I receive dozens of review requests a week, therefore my own DD may be great or none whatsoever. Unless otherwise stated or implied, my opinions are on the financial performance of the company based on their most recent filings. I conduct these reviews to assist other retail investors whose research skills are limited when it comes to reviewing financial statements. I do not accept compensation of any kind from companies I review.

Wolf FINS Reviews are intended to be informational and are based on personal opinion. They are not intended to be financial advice, and all readers are encouraged to perform their own due diligence prior to their investment decisions, including discussions with their investment advisor.

Rather than do seven separate deep dives, it feels appropriate as six of the seven of these companies reported their Q4 and annual filings in the past two weeks. They will therefore be reporting their first quarter within just a few weeks. Watch for my more typically formatted reviews when those are released.

As a group, with two exceptions, I would contest their results similar to words you wouldn’t want to hear on your wedding night - soft and disappointing. I will go in order from what I perceive to be the worst to best.

After going over 6x in share price between last May to October of last year, the stock is now up a measly 15% over the past year and down 81% over the past seven months.

This all occurred with annual revenues up by 15% and net income up by 70%. Those annual revenues of nearly $86M with $20.7M in net income has the stock trading at valuation multiples of under 3 P/E, 2.25x cash flow and 1.2 EV/EBITDA. They are currently at a market cap of $53M while having over $30M of cash on hand.

While the back half of the year was considerably softer than last year including a disastrous 50% decline in top line revenue, it feels like a good portion of the decline in valuation has been self inflicted through very mixed messages to the market. For months those that followed the company knew there were concerns with the companies top two customers. The sequencing of events was very well explained in this Valuation Desk piece published shortly after their earnings.

The Valuation Desk

Zoomd Technologies (TSXV: ZOMD) - Q4 2025 Earnings Review

Zoomd trades on the TSXV but reports in U.S. dollars. All figures in this piece are in USD unless otherwise noted…

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2 months ago · 11 likes · 5 comments · The Valuation Desk

I think if the company was more forthright in their comments after Q3 and even in their subsequent interview with Small Cap Discoveries, the stock would be in a better position than it is in today. Investors went to “fixed” and “back to business” with these two clients, to “limited visibility” with one and “signs of realignment” with the other. Those aren’t exactly comforting statements, particularly when you look at the monster comps the company is up against, starting with their Q1 scheduled to report by the end of May, followed by the best top and bottom line quarter in the companies history in Q2.

Until we know where those two customers stand, it’s really impossible to assign a realistic valuation here. If they return to their former glory, than ZOMD is vastly undervalued. The market currently has them priced as lost causes. I feel that is likely unfair, but with the varying comments that some could (and have) perceive as dishonest or misleading, the market is currently pricing in all of the risk. It’s not the first time I have questioned the amount of ZoomD’s disclosures - their interim financial statements typically total only eight pages and that includes the title and table of contents.

Is it all doom and gloom? No, and far from it. When you parse out the impact of their two largest customers, they have been able to grow the rest of their business by around 30%. They also stand to gain some substantial wins from this years World Cup. They have also shown themselves to be excellent operators with their operational costs, spending the same amount in operational expenses as they did two years ago while virtually doubling revenue.

They also possess an immaculate balance sheet with a current ratio of over 5.4 while sitting on over $30M in cash which is 4.4x their entire 2026 liability commitments. There has been lots of speculation on what the company should do with that cash windfall, with the overwhelming consensus that it should contain a healthy level of share buybacks.

The fact they haven’t pulled the trigger on an NCIB is very telling. If they felt these two customers were going to come back in full force within a short time frame it would have happened already. It’s also notable that insiders don’t feel these valuations have hit bottom either, as their wallets have been firmly entrenched in their pants throughout that 80% share price free fall.

My gut instinct is if there is good news on the horizon with these two customers, buy backs will commence AFTER their Q1 is released. Why do it now knowing Q1 is shaping up to be a massive dud as well? That quarter was completed over five weeks ago, and the commentary in their MD&A is more recent. That sets up for an absolute disaster for their first quarter earnings, likely worse than the ones we just witnessed.

The bottom line is just as important as winning back those two customers, is winning back investors trust. I’m not sure they can fully win back mine. One of my biggest downgrades on record - 4.25 stars down to 3.

Believe it or not, I had a difficult time determining who should go first in my worst to best ranking - ZoomD Technologies or NTG Clarity.

NTG Clarity is still up over 6x from my 2024 Wolf Pick, but let’s not forget they were only three cents shy of becoming a 20 bagger from 15 cents to their all time high of $2.97. They are currently off 69% since that ATH eleven months ago.

NTG’s stock price is down 13% from their earnings released on April 27th. While the company had a solid year on the revenue line, up 49% on the year and 39% in Q4, profitability suffered heavily with net income down 46% in 2025 and 68% in Q4. Unlike some of the communication issues with ZoomD, NTG did telegraph much of this abnormal balance between their top and bottom lines over a year ago with their 2024 annual filings.

At that time they gave guidance of $75M in revenue with AEBITDA margins (eww) of between 16-20%. In fairness to NTG they did cite lower profitability targets due to increased taxation and investments in staff to go after new business. They beat revenue coming in at over $83M but missed the low end of their profitability target, achieving only 14%. That was a pretty significant announcement at the time. In 2024 the company achieved over 17% net income, and they changed their guidance from an N.I figure to a dreaded AEBITDA one. Then they missed it, and rather significantly at that.

NTG now trades around a $48M market cap, giving them valuations of less that .6x of revenue, 8.5 P.E and just 3.6 EV/EBITDA. By all normal standards these would appear very cheap, but due to their historical cash flow woes which I’ve discussed on several occassions, investors have no choice I believe to discount it. My problem with reading their Q4 financials is that cash flow situation has the potential to get even worse.

If you listened to their conference call you may have a different impression. Here is the portion of the transcript which speaks to this.

While Adam is correct that receivables went down this quarter, the problem is that is the first time that can be said in their last ten quarters. Their A/R aging reported also improved as noted. Here’s the problem with that - your aging will of course look better if you don’t bill your customers to begin with. That is not only what happened but it appears to be part of a bigger strategy when Adam mentions they are giving preferred payment schedules to certain clients. While that isn’t completely abnormal business practice, it is poor for cash flow and they already have more than generous payment terms to begin with. To top it off, Adam discusses early payment incentives which will impact profit margins.

In summary, they already have a lag built into their billing cycle and have seemingly added to this by the increase in contract assets YoY and QoQ. They have very generous payment terms compared to business norms and giving preferential treatment and discounts on top of the above to some. A company with $15M of net income over two years should not have negative cash flow over that same time frame and I just don’t feel management gets it based on their comments.

Last thing I will touch on is their seemingly weak guidance for 2026 of $90M in revenue with 13%-16% of AEBITDA. That is mid single digits on the top line with soft guidance on the bottom, particularly given the tax situation which they supposedly worked around with a Saudi Arabian LLC. Maybe it’s an under promise, over deliver type situation given missing 2025 profit guidance but I’ve decided to move on from the stock, selling bits and pieces over the last couple of weeks and totally closing my position on Friday.

Maintaining my 3 star review from November.

We’re moving from the very poor financials from the past couple of weeks into the more moderately disappointing ones, and that’s what we have here with Happy Belly Food Group. I probably could have ranked them anywhere from 3rd to 5th, but since I have more skin in the game with HBFG, I’m ranking them here.

The stock is off 3.5% since releasing their financials on May 1st, despite getting some positive acquisition news. Assuming it closes they will add a new brand in the Mexican fast casual arena in Ghost Taco with six existing locations in Ontario.

The year over year results for both the full year and Q4 were impressive as we have come to expect. QSR system sales were up by 108% on the year and 90% on the final quarter. I say as expected as they ended with 77 locations open by the end of 2025 vs 43 at the end of 2024.

QoQ figures were much less impressive coming in 12% lower in Q4 vs Q3 from $19.2M down to $16.9M. Costs on the other hand went completely the other way, with direct operating costs up by 47%, Payroll up by 5% and flat G&A costs.

Happy Belly also received a substantial hit to SBC expenses, but even if we remove that non-cash item, their operational loss in Q4 was $2.4M, compared to being profitable on that line through their first nine months.

Operational cash flow also suffered in Q4, although an overall glance at the cash flow statement doesn’t look problematic. Prior to working capital adjustments, HBFG burned $1.7M, but working capital adjustments thanks mainly to a growth in Accounts Payables makes their overall OCF look better than I suggest it should.

I’m sure seasonality plays a factor in here, particularly when Heal Wellness is the company’s largest brand. But at the end of Q3, Heal had 27 restaurant locations open representing just 37% of their 73 total locations. All of those 73 (plus 4 new locations in Q4) were open for the full quarter, yet total system sales lagged by 12%. I think completely writing that off to seasonality of smoothie bowls doesn’t cut it.

There are not a lot of pure comparisons in the Canadian market place, but for what we do have is MTY, down 2.8% sequentially (likely worse due to an added week in Q4), Tim Hortons was down 6% on a QoQ basis, but A&W was up a staggering 24% in Q4 vs Q3.

I’m not suggesting by any means that investors hit the panic button, but I think there is enough here to put extra focus and a larger magnifying glass on future quarters. That means investors demanding greater detail within their quarterly MD&A’s - a better breakdown of how each brand is performing, and SSS figures as is customary within the sector. I also feel it is time for management to step up and start setting up quarterly earnings calls. The first two stocks I mentioned (NCI and ZOMD) have a combined market cap of under $100M and they produce regular earnings calls. At a $240M market cap and with some analyst coverage, it’s time to expand beyond discussions within a discord full of cheerleaders (don’t be insulted, I include myself in that statement). Sean has the personality and outgoing demeanor that would perform extremely well in that type of format, so I hope he does.

A typical review here likely would have received a 1/4 star downgrade to 3 stars - the company’s first downgrade in the four or so years I’ve been covering them.

As has been the trend thus far, Atlas Engineered Products is down from their earnings release, but modestly to the tune of 4.5%. It still remains up however by 10.3% from their selection as a 2026 Wolf Pick. That happens to be the worst performing Wolf Pick of this year’s batch with the average up 50.3% (cheap self-promotional plug).

My expectations for the first set of financials after my annual pick were mild as the company continues to integrate their two recent acquisitions and get their Ontario robotics plant up and operational. The fact the company received $4M in federal grant funds as the plant upgrade is near completion was a big welcome bonus and strengthens what was already a pretty decent balance sheet.

Aside from seeing how Atlas will be taking advantage of the seemingly improving macro conditions surrounding construction and home building (not to be confused with the poor macro real estate situation), gross margin seems to be the most central thing to watch in terms of how the company will perform in 2026.

Margins dipped to under 20 points in 2025, a decrease of nearly 500 basis points compared to 2024. So despite a 12% revenue increase during the year they brought 10% less dollars to the gross profit line. The encouraging offset is their two largest cash burning operating expense lines (Admin and Payroll) only grew by 1% in 2025, despite the fact that they added two acquisitions in the middle of the year. That continues to prove to me what I have believed for a long time - they are very good operators.

Although Atlas suffered a small $375k net income loss, they did deliver $6.25M of EBITDA, and $7.35M of operational cash flow in 2025. That leaves them trading at around a 10 EV/EBITDA, and just over 6x cash flow. They also reduced their long term debt by 17% during the year.

As we get into the first couple of quarters of 2026, my mild expectations begin to grow. They are up against two soft quarters in the first half of the year with their two non-comp acquisitions in play. The company has battled very soft macro conditions in the past couple of years. While some may not be as optimistic as I am as to that turning - when it does, I want to have a piece of one of the best operators in the sector. I believe I have that with Atlas.

Holding my 3 star rating from their November third quarter review.

We now move to a 2024 Wolf Pick and very likely the one I played the worst in the past four years - selling my stake for a modest gain just prior to their very newsworthy fall of 2025 that sent the stock from $1.30 to $3.15 in about a six week window. Unfortunately the stock has come almost all the way back closing at $1.37 on Friday. That is down about 1.5% from their most recent earnings release after an initial gap up.

I did get a little revenge recently trading the stock from $1.27 to $1.60, but as I mentioned in my April WWW, my preference would have been to be on the outside looking in when earnings came around, and that worked out to be a successful trade.

Unlike the other six in this article, Gatekeeper was the only one not delivering their 2025 annuals, ahead of the group with their Q2 of their 2026 fiscal year.

Gatekeeper killed it on the top line in Q2 with 75% more revenue, but none of that translated to the bottom line with a net loss of $315k. This compares to a net loss of $1.06M in the comparable quarter - sadly this is misstated in Gatekeepers financials as someone forgot to add parenthesis so it appears incorrectly as a net income gain.

Gatekeeper got crushed on foreign exchange with a $406k loss compared to a gain of $403k last year. An $810k bogey in this account is hard to make up for elsewhere. When you take that impact out it was a very successful quarter. Gross margin grew from 38.8% to 42.5% which delivered 92% more gross profit dollars, and the company only spent 15% more in cash burning operation expenses while driving revenue by 75%. It was a Wolf Trifecta quarter ruined by forex.

Their YTD numbers are not quite as good despite achieving 23% more revenue and improving margins by 230 basis points. Operating expenses grew by slightly more than their revenue growth (25%), but that foreign exchange bogey remains growing to more than $900k YTD. That combined to grow their net loss by 177% YTD to $1.44M.

Gatekeeper’s cash flow statement looks like it is out of a horror movie with nearly $13.8M of cash burn through six months. Now this is due to significantly reducing payables while receivables grew, so I don’t anticipate this trend to continue. It is still concerning that they are still burning cash before taking into consideration working capital adjustments. Thankfully, they have an immaculate balance sheet with a current ratio of nearly 10 and possess excellent liquidity.

Pricing Gatekeeper currently is a challenge as they have negative net income, negative $3.3M TTM EBITDA and are no longer generating operational cash flow. From a pure fundamental metrics standpoint they are way behind when I selected them as a 2024 Wolf Pick when they had a P/E of 11, an EV/EBITDA ratio of under 9 and traded at under 5x cash flow.

The outlook is potentially better than is was at the end of 2023 as the company is well positioned in a sector with a lot of growth potential. Their MDC count could get near 100,000 by year end and while that is a nice source of recurring revenue I feel this is something most retail investors do overstate the importance of.

That profitability trend line which has taken a significant hit in the past six quarters needs to turn around through better execution. I think Q2 is a decent start when the forex impact is removed. Can they continue? We’ll see.

I feel a full review would have gotten them 2.75-3 stars, which is an upgrade from the 2.5 for their 2025 annuals.

The trend of the article now begins to change, as Pharmacorp RX (PCRX.V) is up by 17% after their Q4 and 2025 annual earnings release, finally breaking out of that long buy zone I identified in my annual Wolf Pick article.

That positive share price performance was not really related to their earnings, but the news release the day after when they announced an agreement to acquire eight additional pharmacies and a pipeline of four more under LOI. The initial eight are expected to close by end the end of Q2, with the remaining four potentially by the end of Q3.

Pharmacorp only had six pharmacies to end 2025, and by the end of Q3 that number could triple to 18.

The financials they released didn’t exactly jump off the page, losing $1.42M on $20.9M in revenues, but they were operationally cash flow positive while integrating all of these new acquisitions.

They ended 2025 with a run rate of about $31M in annual revenue, so by the end of Q3 we could see this number increase dramatically to potentially $75M or more. Unfortunately the company does not include a lot of metrics for the acquired businesses, so take my Wolf math with a grain of salt.

One of the factors that attracted me initially to Pharmacorp was their ability to improve the overall operational effectiveness of the businesses they acquire and do it in a rather short time frame. Same store sales were up by 6% in Q4, and they are able to do so in both the front (retail) and back (prescriptions) of the house. The fact they can also do this while not burning cash operationally is also very attractive.

PCRX is after all a rollup story, and if we go back to one of my 2023 Wolf Picks, NowVertical, they don’t all turn out well. I’ve always maintained the easy part of a roll-up focused businesses is the acquisitions themselves - essential buying the revenue. Where most rollups fail is in the operational and synergistic integration - this is what separates the good stories from the bad ones. This among other things is why NowVertical has suffered, or arguably failed. Pharmacorp is already showing signs of doing this much better, and pretty much immediately. While PCRX is producing some operational cash flow, they aren’t producing enough to continue on this acquisition pace without dilutive measures occurring or taking on debt. That is certainly one thing retail investors interested in this company need to fully understand, and expect. Management is aggressive and I don’t anticipate they are about to slow down.

By the time NowVertical released their Q1 in 2024, a mere five months after making it an annual pick, warning signs were very evident and I exited with a profit before the bottom fell out of the stock price. I do not see any indication of those warnings signs with Pharmacorp, so I will look to add to my position when the chart dictates.

3.25 stars.

The largest logo also had the largest success story, up 36% after earnings and 41% since selecting them as my first 2026 mid year Seal of Approval pick back in February. How is that buy zone looking now?

Back in February, Biorem was one of my higher conviction plays, citing a 54% upside ($3.73) by the end of May, and we are more than three quarters of the way there.

Unlike the others, this one occurred before I left on vacation, so I’ll leave my full review below.

Thanks for taking the time to read all of that. I need to plan my European holidays a little better.

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Disclaimer:

My intent is for my reviews to be a bolt on to due diligence that you have already completed. I receive dozens of review requests a week, therefore my own DD may be great or none whatsoever. Unless otherwise stated or implied, my opinions are on the financial performance of the company based on their most recent filings. I conduct these reviews to assist other retail investors whose research skills are limited when it comes to reviewing financial statements. I do not accept compensation of any kind from company’s I review.

Wolf FINS Reviews are intended to be informational and are based on personal opinion. They are not intended to be financial advice, and all readers are encouraged to perform their own due diligence prior to their investment decisions, including discussions with their investment advisor.

First look at this $90M market cap that was receiving a lot of chatter around this time last year in microcap circles as they were doing the convention circuit. The company went 9x in the six month stretch of January to June last year, but then lost 48% of their value over the last three months.

ALUULA is a next-generation composite materials company manufacturing the world’s lightest, strongest, and fully recyclable composite fabric, embedded as the premium ingredient inside the world’s leading performance brands.

Their Q1 financials are about a month old now and the share price has stabilized over the past six weeks. Is this a good time to take another look at Aluula or do the financials suggest there is more downside ahead. Let’s find out.

This article will be re-released without a paywall on May 1st.

Aluula’s current ratio is (was) decent at 1.70 consisting of $2M in cash, $1.2M in receivables, $2.8M worth of inventory and $370k in other short term assets against $3.8M in liability commitments due over the next twelve months.

I always like to give a positive shoutout when a person is managing their A/R as well as this with 91% of their receivables listed as current.

The company has (had) $1.4M worth of debt, $400k with WD Canada, interest free with payments ending in March 2029, and a $1M related party loan through a numbered company at 12 points. The loan has been amended twice, most recently at the start of the year. Twelve points doesn’t sound like a great deal between friends.

While the current ratio is decent, the quick ratio is (was) a little lacking as their cash + A/R doesn’t (didn’t) offset their one year liability commitments.

Post financials they took advantage of all of that share appreciation and raised a whopping $14.1M through a LIFE offering at $3.30/share with a half warrant exercisable at $4.29 over two years. Those PP investors are currently down 12.1% however.

Aluula plans to utilize about $6.6M of that raised capital on expanding their manufacturing capacity.

That significantly changes the look of their balance sheet and liquidity. They also paid off that related party loan, and considering the twelve points, a wise decision.

Cash Flow:

Aluula burned just shy of $100k through their first quarter of ‘26, but that is a 36% improvement over the comparable quarter. They have not had a positive OCF quarter in their last six. Inventory levels rose by 37% in Q1 and that investment seems to be the biggest culprit contributing to their Q1 burn.

The company utilized $82k in asset purchases and added $164k of debt in the quarter which has now been fully extinguished.

That $2M in cash at the end of the quarter quickly increased to over $14M after commissions on the raise and debt payments.

Given their relatively small burn rate and $8M in additional general working capital available, they seem well positioned moving forward.

Share Capital:

• As of Jan 31, 26.3M shares outstanding with 5% dilution in the past year.

• Post financials the raise added 4.3M, bringing the total to 30.9M outstanding and dilution rate to 22% over the past five quarters.

• Goofy structured warrants. Stated amount of warrants outstanding is 26.25M outstanding which almost made me stop doing the review all together. The actual potential dilution on these should actually be 26.25/20 which is 1.3M. Some of these were exercised post financials

  

• 2.5M options, all ITM with the exception of 295k granted in the quarter at $3.30 under the company’s 10% rolling option plan

• Insider ownership of approximately 34% per investor deck

• Minor slaps on the open market in the past twelve months by insiders

Income Statement:

Very strong revenue headlines achieving $2.33M on the top line which is 85% more than they achieved last quarter. Margins did slip by 300 basis points in the quarter to 42%, and as a result delivered 73% more gross profit dollars.

Expenses jumped by 51% mainly via G&A expenses which exploded by 193%. That resulted in a slightly larger operational loss of $260k vs $251k. Not much worth noting below that so their net loss was also slightly up at $384k in the quarter vs $374k.

The margin decline is related to onboarding of staff, and the rationale for their G&A costs (highlighted below) is definitely on the weak side, as there is nothing to assure me that these near tripling of G&A costs are just a one time pain point.

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Overall:

On the surface it looks like a disappointment, having 85% more revenue turn into a slightly higher loss at the bottom of the P&L. I certainly would have liked to see a more detailed explanation within the MD&A on where the misses were to be able to forecast their spending moving forward.

On the other hand they went from a pre-revenue company in 2022, achieving $4M in 2023 with a now TTM number approaching $9M. Some growing pains and not all numbers making sense are to be somewhat expected.

They have a long list of partnerships with key brands in the sports and outdoors segment, and I would think this is a company that should be on people’s radar’s, even if you missed out on shares in the 50 cent range one year ago.

There is no better deep dive (very bullish case) than the following piece by Domum Capital. It’s six months old now but I suggest you start here if you are interested in learning more about them.

Domum Capital

The Fabric of the Future: How Aluula Turns Light into Strength

Written in collaboration with MBB (@LockStockBarrl…

Read more

8 months ago · 18 likes · 9 comments · JB

The biggest question for me is the valuation sitting around $90M. That is about 10x TTM revenues for a non profitable company on the EBITDA or Net Income lines with six straight quarters of operational cash burn and a negative ROIC of -13%.

Their float management history is also questionable. They went from 150M shares in 2022, which ballooned to over 500M shares a little more than a year ago. They did a 1:20 reverse split in February 2025 and have experienced 23% dilution since.

They are definitely going to need to show me a little more to get interested at these levels. Now that their treasury is near full, let’s see how they manage that better looking balance sheet. The fact that their first move post financing closing was to hire an investor relations company makes me wonder.

Three star financials, less a quarter star for the 10x revenue valuation. 2.75 for those who can’t math.

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Disclaimer:

My intent is for my reviews to be a bolt on to due diligence that you have already completed. I receive dozens of review requests a week, therefore my own DD may be great or none whatsoever. Unless otherwise stated or implied, my opinions are on the financial performance of the company based on their most recent filings. I conduct these reviews to assist other retail investors whose research skills are limited when it comes to reviewing financial statements. I do not accept compensation of any kind from company’s I review.

Wolf FINS Reviews are intended to be informational and are based on personal opinion. They are not intended to be financial advice, and all readers are encouraged to perform their own due diligence prior to their investment decisions, including discussions with their investment advisor.

I feel like I set this one up on a tee for everyone. Back in February I gave Biorem the Wolf Seal of Approval citing big opportunities for some upward share price moves early in 2026. Many within the Wolf Den discord took note.

Biorem reported their annuals yesterday morning and the market rewarded them with a 16% increase, now giving them a 21% increase from the bottom of my February buy zone.

Let’s dive into the numbers.

Balance Sheet:

With deferred revenue removed, Biorem has a solid 2.6 current ratio consisting of $11.5M in cash, $12M of receivables, $1.4M worth of inventory and $5.7M in other short term assets against just $11.9M in liability commitments over their 2026 fiscal year.

To be polite, Biorem’s aging report is messy. We don’t know their terms, but one would assume their past due receivables to be at least 24%, and have $660k in allowances for doubtful accounts already booked.

Biorem has $1.85M in debt at an attractive 4% interest rate. They also have an unutilized $3M LOC at prime + .75%

Cash Flow:

Significant cash flow improvements in 2026 with $7.6M of operational cash flow, more than double (107%) the $3.7M achieved in 2025.

While very impressive it also may be slightly inflated, Payables grew by nearly $4M in Q4 alone and those bills will be coming due. Inventory levels were also significantly depleted in the back half of the year, so re investment there will be expected. Do not be surprised to see a bit of a hiccup in their OCF when the company reports their Q1 in four to five weeks.

The company made minor investments in equipment of $367k during the year, paid down $570k worth of debt and bought back a small amount of stock for $100k.

Overall, their cash position grew by 120% during 2025.

Share Capital:

• A very tight float of just 16.1M shares outstanding, with virtually no dilution last year

• 3.3M options outstanding, all well ITM with 2.3M expiring in early 2027. Only 50k new options were granted in 2025

• Announced an NCIB in June. Bought back a limited number of shares over a few week period in September. Not much of a commitment here - more like a game of just the tip to see how it feels.

• Limited insider ownership of just 2%. Minor insider buying last May

Income Statement:

Revenue for the year came in 13% higher at $42.4M vs $37.4M last year. Gross margins were over 300 basis points higher at 30.1% vs 26.9% delivering an impressive 27% more gross profit dollars on 13% more sales.

Total expenses grew by less than 10%, all in G&A expenses showing very good conversion on their revenue and gross margin gains. That all combines for a Wolf Trifecta for their 2025 year.

Earnings from operations were up by 49%, and after a small savings in finance costs and 37% more in income taxes, net income came in at $4.8M, 58% more than the $3M they delivered in 2024.

Much of their 2025 success was delivered in their most recent fourth quarter. At the end of the third quarter, revenue and earnings were down to last year. Q4 revenues were 82% higher for a quarterly record of $16.9M. Gross margin more than doubled from 17.1% to over 35% with gross profit dollars increasing by a factor of 3.7x from $1.6M to $5.9M. At the bottom they delivered a very impressive $2.68M of net income compared to just $200k last year.

They certainly ended 2025 with a bang.

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Conclusion:

After a mediocre at best first three quarters of the year, they really saved the year in Q4 with this record quarter on both the top and bottom lines.

If you were paying attention, much of this was telegraphed, hence why I awarded the company my first mid year pick of 2026 back in February. After having three pretty rough quarters of their last four, their order intake and backlog were increasing.

After Q3, the CEO reported $71M of backlog for which they anticipated 75% would be delivered over the next four quarters. That is $53.3M between Q4 of 2025 and Q3 of 2026. After delivering $16.9M in Q4, that leaves $25.4M over the next three quarters. That would represent a 43% revenue increase over the next nine months, while also setting up a very tough comp a year from now.

The downside with Biorem is quarterly results have been lumpier than a bad bowl of oatmeal, but they have delivered a 19% CAGR over their last three years of earnings when you smooth those results out. Their TTM by the end of Q4 looks like it will surpass $50M with improving margins, and they have a proven history of being great operators with excellent float management.

From a valuation perspective, after yesterday’s gains they sit just shy of a 10 P/E, and much more attractive from a cash flow perspective at 6x, and under 6 EV/EBITDA.

Now take into consideration their next three comp quarters starting with a rather dismal $4.7M when the company reports Q1 in four or five weeks. Given what the CEO said at the end of Q3 we should expect a beat over the next three quarters by 43%.

Backlog now sits at $65.3M. After their record Q4 that is down from $71M but 16% higher than they ended 2024 with. As usual the company commentary is cautiously optimistic with caveats on the current geopolitical climate.

Biorem is currently sitting about 50 cents shy of their ATH from last January. Are they a better looking company today than they were then? I would say yes which makes me feel that there is still some room to grow, particularly with these soft upcoming quarters.

If order intake in future quarters continues to be shy of their revenue, that could change resulting in future earnings becoming a sell the news event.

For now, I’m awarding them a half star upgrade to 3.75.

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Disclaimer:

My intent is for my reviews to be a bolt on to due diligence that you have already completed. I receive dozens of review requests a week, therefore my own DD may be great or none whatsoever. Unless otherwise stated or implied, my opinions are on the financial performance of the company based on their most recent filings. I conduct these reviews to assist other retail investors whose research skills are limited when it comes to reviewing financial statements. I do not accept compensation of any kind from company’s I review.

Wolf FINS Reviews are intended to be informational and are based on personal opinion. They are not intended to be financial advice, and all readers are encouraged to perform their own due diligence prior to their investment decisions, including discussions with their investment advisor.

Frequent readers of mine know the story here. First selected as a 2024 Wolf Pick in mid December of 2023 at $0.61 with an original position of $0.58. Today on the morning of their 2025 annual financials it sits at $8.45 for a near 14 bagger and has traded as high as 17.5x.

If you were a little late on that one you still could have more than tripled your money over the past year with the stock returning 264%.

I had planned to cover Kraken in my my monthly earnings preview (What’s Wolf Watching) this weekend, but the company released earnings a couple of weeks before the deadline - usually a positive sign.

I’ve taken plenty of profit off the table with only about 25% of my original position remaining, the latest at $9 generating a 1451% return, but my current holdings are still more than 3x of my cost basis. Kraken has been very kind to me.

In terms of these financials, I’d say my expectations are low. I don’t anticipate them living up to the current $2.6B market cap. A long way from the $125M market cap when they were selected as a Wolf Pick less than two and a half years ago. We’re also more than a quarter into 2026 by the time these financials are released, and a lot has occurred with Kraken since their year end. Most notably of course was their $615M acquisition of Covelya Group consisting of $480M in cash and $135M worth of stock. To fund this the company raised over $402M, and the deal hasn’t officially closed yet.

How does their guidance look for 2026 and beyond and how much to they still need to grow into this valuation. Let’s dig in to ensure they are on the right track.

Balance Sheet:

Given the post financials acquisition and subsequent raise, I’ll try to be brief here.

At the end of December, Kraken’s current ratio was 5.5 consisting of $120.5M in cash, $34.7M worth of inventory, $27.3M in A/R and $27M of other current assets against $37.9M in liabilities due over the next year.

They had $22.7M of long term debt spread across six separate loans. Post financials they amended their revolving credit facility from $35M to $150M. They will surely need to tap into that given the $480M in cash they plan to utilize for the Covelya acquisition.

Kraken’s aging report is a little suspect with $1.7 in anticipated losses and that’s on top of over 25% of invoices past due. 86% of their A/R is concentrated within four customers.

Overall, their balance sheet looked great at year end with just their cash position covering all of their 2026 liability commitments by over 3x. Given the acquisition and adjoining raise of capital occurred in March, it will need to be re-evaluated with Q1’s financials that investors will see by the end of May.

Cash Flow:

Just $1.5M of operating cash flow was generated in 2025 compared to an operational cash burn of $11.6M in 2024.

As is usually the cash with Kraken, their OCF was heavily influenced by working capital changes, most notably was the inventory ramp up in 2025 - a strategic decision to have more on hand available to sell. It was partly the reason for the raise earlier in the year. Therefore one could conclude their cash flow is better than it looks.

Covelya wasn’t the only acquisition in the last year as they also acquired 3D at Depth last April for $23.8M and spent another $26.5M on capex, mainly for their new N.S. facility to expand capacity which is now completed.

Kraken raised nearly $110M in capital through dilutive measure in 2025 and added $9.4M in net debt.

Overall they more than doubled their cash position in 2025 to $120.5M. Of course this will look much different at the end of Q1.

Share Capital:

• 306.6M shares as of Dec 31 - 17% dilution in 2025 and 48% over two years

• 13.7M options, all ITM, earliest expiry May of 2027

• Insider ownership around 3% and getting lighter post financials. I wonder if the CEO wants the 800k in shares back that he sold at $2.98 ten months ago

• 47.4M subscription receipts which will convert to common shares upon Covelya closing

• Approx 15-16M shares to Covelya as part of the acquisition

• Fully diluted float approximately 382M shares

Income Statement:

On the year, Kraken drove a modest 12% increase in revenue to $102.2M. Much more impressive were gross margins with increased by 1300 basis points from 49% to 62%, and that helped to drive 42% more gross profit dollars on just 12% more sales. This was achieved through strong demand for batteries and synthetic aperture sonar (SAS) products, and robust growth in subsea services.

Unfortunately there was no operational leverage obtained in 2025 with operating expenses growth of 78%, significantly above their rate of revenue increasese (12%) and GP dollars (42%).

While non cash burning depreciation and SBC costs rose dramatically, cash burning Admin costs were up by 85% while R&D rose by 26%. Headcount in Q4 was 53% higher on a YoY basis contributing to much of the variance.

Therefore after generating 42% more GP dollars in 2025, their operating income was down by 38% YoY to $8.6M.

After an $8M net income tax recovery in 2025, they experienced $3.3M in income tax expense , so net income for the year decreased by 86% to $2.9M vs $20.1M.

On a quarterly basis, it looks quite similar. A very slim revenue increase of 1% with a dramatic improvement in margin to 70% vs 48% to grow gross profit dollars by 48%.

Cash burning expenses grew by 74% with most of the negative impact of their previously mentioned tax bogey to last year occurring in Q4 resulting in a just better than break even net income of $54k vs $13.7M.

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Overall:

If you’ve got this far, let me tell you that almost everything above is pretty much meaningless, and that makes me question my own sanity for writing it in the first place. The following is much more important.

That $2.6B market cap I referred to in the opening effectively turns into a $3.4B market cap at the current $9+ share price given the dilutionary measures that will take place on the acquisition of Covelya closing - that should take place sometime in Q2. That means investors won’t see any combined results until mid to late August, and fully blended for a whole quarter until November.

The guidance for 2026 for Kraken Robotics which doesn’t include the acquisition is in itself quite encouraging. Revenue at their mid point of $170M would represent a 66% increase. The company has already received $87M worth of orders as of yesterday - 50% of their annual guidance with more than two thirds of the year to go. Therefore this guidance could be a little sandbagged.

Unfortunately AEBITDA is the only profitability metric they provided guidance on and that is expected between $40-$50M. I say unfortunately as their historical AEBITDA to cash flow conversion has been very weak. They achieved $25M of AEBITDA in 2025 and only delivered $1.5M in operational cash flow. I anticipate 2026 to have significant restructuring and acquisition expenses, therefore I assume similar poor AEBITDA to cash flow conversion this year.

We know that this guidance will be updated when the acquisition has been finalized, and those could generate some very eyepopping numbers. Covelya was expected to deliver between $250-$275M last year and if you tack on their CAGR of 24%, that delivers $310M in 2026 on the low end. According to the recent earnings release, Covelya has already received $135M worth of orders putting them on track for that $310M figure. Therefore upon closing the deal, annualized total revenue of a half billion dollars looks like a near certainty, but with a lot of questions on what happens underneath the revenue line.

That is where I have some concerns with the acquisition. The $615M price tag is reportedly an approximate 10x AEBITDA - that metric once again that I despise so much. 10x net income or cash flow I would usually consider a good deal at the top end, particularly given a 24% CAGR in a very attractive sector. 10x EBITDA or AEBITDA can potentially become an overpay very quickly, particularly if Covelya’s cash conversion from AEBITDA is similar to Kraken’s. They are going to need to grow both at significant rates and generate some considerable synergies to make this look attractive a few years down the road. How much of this transaction will be made up of goodwill and intangibles will be very interesting to look at eventually.

Unfortunately it won’t be until November until we see a full quarter results of the combined businesses, and likely another year from then to see any results of synergies and operational efficiencies. Until then the stock will continue to trade on speculation, news, and the strength of the defence sector. I do like this $3.4B implied valuation of the combined businesses more than I did the $1.6B valuation of Kraken’s business the last time their financials were reviewed, but that’s not saying much.

If you want to continue to nerd out on Kraken, I’ve attached two decks. The first is more about the Covelya acquisition itself, the second is their latest investor deck just recently updated.

Given their Q1 results next month will not have combined results, I’ll probably pass on another review and wait until August for Q2. Until then, I’m maintaining the 3.25 stars.

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Disclaimer:

My intent is for my reviews to be a bolt on to due diligence that you have already completed. I receive dozens of review requests a week, therefore my own DD may be great or none whatsoever. Unless otherwise stated or implied, my opinions are on the financial performance of the company based on their most recent filings. I conduct these reviews to assist other retail investors whose research skills are limited when it comes to reviewing financial statements. I do not accept compensation of any kind from companies I review.

Wolf FINS Reviews are intended to be informational and are based on personal opinion. They are not intended to be financial advice, and all readers are encouraged to perform their own due diligence prior to their investment decisions, including discussions with their investment advisor.

This review comes via request through the Wolf Den discord. These financials are about six weeks old so this isn’t typically a request I would agree to. Then I looked at the chart.

A year ago the stock traded at $0.115. Just two weeks ago at the end of March, it was trading at the exact same figure. But since the beginning of the month, the stock has more than tripled, up 217%. For a stock that went many days throughout 2026 with no shares exchanging hands, suddenly had significant volume.

Nepra released their financials mid-day on Feb 27th. For the entire next month, 282k shares were traded. In the past two weeks during this 3x rip, 3.6M shares. The company had zero press releases between their Q3 financials press release and preliminary Q4 numbers on April 10th. So why did the volume and price action begin ten days earlier. Feels a little suspicious right?

Let’s see what we can find. I have yet to open these financials, so you’ll be getting my “live” reaction as you read along.

Balance Sheet:

Insert cringe emoji here. At a minimum, you would like to see a current ratio above one where current assets at least offset their current liabilities. Nepra Foods ended Q3 with a ratio of .33. That consisted of just $25k in cash, $527k of accounts receivable, $1.07M worth of inventory and about $100k in other current assets overtop of $5.3M of liability commitments due over the next twelve months.

It didn’t take very long to get to our first red flag. Receivables.

First issue is anticipated credit losses. $108k doesn’t sound like a big figure but it makes up 18% of their total. We are less than two years removed from the company taking $211k in recorded losses ($76k was recovered last year).

Given the details in their aging report, one would assume their credit terms are 60 days, and are not expecting to receive payment for amounts past due.

Then we come upon something that I’ve only seen once in the last six years of performing financial reviews - a company entering into a factoring arrangement for their receivables. Companies enter into these agreements when facing liquidity challenges, and with under $25k in cash on the books and a .33 current ratio that highly qualifies. In a nutshell, Gateway Funding advances cash for their receivables in exchange for interest and fees, but Nepra Foods still maintains the risk if those receivables are not eventually paid. This poses a myriad of problems:

1. It’s expensive. For example lets use a $100k invoice that takes 60 days to receive payment. Gateway would give (lend) Nepra $77,600 (80% of the $100k less the 2.4% fee). When the customer pays in 60 days, they would get the additional $20k less interest and additional fees. The total cost of that borrowing is approximately 3.6% for 60 days, annualized between 21-23%. For customers taking longer than 60 days would get significantly more expensive as the discount fee escalates as well as an additional .04% added per day.

2. They maintain all the credit risk while paying this significant premium. Should the customer default on payments, they still have to pay Gateway back.

3. This effectively inflates that already poor current ratio. That $266k in receivables under “factoring” needs to be shown in current assets even though funds are already received due to IFRS accounting rules. Therefore that .33 ratio is more like .29.

Nepra Foods has just shy of $2.5M worth of debt. It doesn’t sound like a high dollar amount but their note 12 which covers this in their financial statements covers nearly seven pages and ten different debt instruments. Post financials there was additional activity. Most of the outstanding debt is owed to related parties.

(We have reached the stage where I regret starting this review)

$1.14M of debt owned by the COO and CFO was amended post financials to be paid in a lump sum prior to the end of 2027 at 6%.

$669k in a loan owned by the CEO by way of a promissory note was settled post financials on Feb 11th via stock at 10 cents per share. A little more than a month later those shares are worth over $2.5M.

What a mess. Let’s move on.

Cash Flow:

On a more positive note, Nepra is a little better than cash flow neutral YTD generating $57k of operational cash flow, and that compares to burning nearly $1M at this stage last year.

Nepra had zero investing activities so far this fiscal year, but has reduced their net debt by $700k and received $929k via various financing activities, the majority of which through a private placement that took 4 months to close over three tranches at 8.2 cents CAD. Investors in that PP have nearly 4.5x’d their money since.

Their $25k cash on hand is 44% less than what they began the year with ($44,700).

Share Capital:

• As of Dec 31, 113.6M shares outstanding representing 9% dilution YTD but 46% over two years

• 1.4M options outstanding none expiring before 2031. Only the 500k granted this year are ITM at 13 cents

• 22M warrants outstanding, all ITM ranging from $0.10 to $0.17. Post financials 5.2M at ten cents were exercised with 8.5M expiring unexercised. Ouch, those 8.5M warrants could have resulted in $2.25M worth of profit at today’s share price

• Insider ownership is a moving target. Yahoo Finance has it at 43%. It’s likely higher with the CEO Billy Hogan owning 33% after the shares for debt transaction mentioned earlier after financials

• No insider activity on the open market

• Current float at approx 125.5M representing 20% dilution YoY and 61% over two years

Income Statement

Revenue in 2025 has been quite good, coming in just shy of $6M on a YTD basis representing a 50% increase over last year. Margins came in at 31%, a substantial 800 basis points above last years 23%, therefore gross profit dollars more than doubled against 2024 through three quarters.

Total expenses are also down, and significantly by 18% with savings across their two major spending buckets. G&A costs are down 18% with payroll down 19%.

Even with that Wolf Trifecta (double digit revenue, margin improvement and operational leverage achieved) they still lost $353k on the operating income line, and tack on $623k of finance costs (30% higher than LY) on a relatively small amount of debt results in a net income loss of $1.04M, a $300k improvement over 2024.

The third quarter itself had a 54% increase in revenue to $2.23M. Margins were up by 110 basis points to 28.5% and operational spending was 10% less. Nepra delivered $85k in net profit in Q3, but that is mainly due to a $424k gain in change in fair value of their warrants. Without this, they would have had a net loss of $340k compared to $560k last year. Now that the share price has appreciated so much this will turn into a much larger loss for warrants still outstanding.

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Overall:

Using the updated share count, Nepra has an approximate market cap of around $46M. That feels outrageous for a company who has done $8.3M in TTM revenue with negative TTM EBITDA and treading water from an operational cash flow perspective.

That is all before taking into consideration the horrible state of their balance sheet, which to be kind is a mess with serious liquidity issues.

I went through their investor deck, and attached it below for your perusal. WTF kind of pose is the Chairman of the Board doing here? The guy sporting the tee shirt is Co-Founder, former CEO, and now Chief Visionary Officer, CTO and Master Baker.

To be honest all I had to see is this one slide to know I’d never invest in them. Chief Visionary Officer and Master Baker. You might as well just add Douche Canoe to the list of titles.

I’ll also attach a recent brief interview they did with Stock Box Media. They appear to have most of their content around mining shitco’s, which would explain why I’ve never heard of them.

I'll be honest, the P&L really doesn’t look so bad. Revenue growth is quite impressive, and they are doing so with improved margins. The problem is much of the impact in those margins is being eaten up by the way they are handling receivables. If you sell customers something at 31 points of margin, and then enter into a factoring scheme for advancement of those funds which come with a hefty VIG, you erase all and more of that margin improvement.

They also have customer concentration issues - 85% of their Q3 business came from three customers. When we go back to their A/R aging report, there is a strong statistical likelihood that one of their top three customers doesn’t like paying their bills on time - or maybe at all.

The market cap for what they are achieving is just highly overvalued in my opinion. This two week stretch of share price appreciation looks very unusual and I don’t trust it. This stock barely has a mention in social media and bulletin board circles and there were no worthy news items from April 1-10th. That April 10th NR cited preliminary revenue numbers showing a 15% revenue increase YoY. That is typically quite good, but also the worst revenue improvement they achieved in the last seven quarters.

Interestingly enough, the stock is down 20% today since I began this review. IDK but my pump/raise radar is off the charts with this one.

Two stars.

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Disclaimer:

My intent is for my reviews to be a bolt on to due diligence that you have already completed. I receive dozens of review requests a week, therefore my own DD may be great or none whatsoever. Unless otherwise stated or implied, my opinions are on the financial performance of the company based on their most recent filings. I conduct these reviews to assist other retail investors whose research skills are limited when it comes to reviewing financial statements. I do not accept compensation of any kind from companies I review.

Wolf FINS Reviews are intended to be informational and are based on personal opinion. They are not intended to be financial advice, and all readers are encouraged to perform their own due diligence prior to their investment decisions, including discussions with their investment advisor.

I needed a hiatus from cannabis stocks over the past few months. I’m not quite back to the abhorrent disdain that I had on the industry as a whole a few years back, but my current sentiment is lukewarm at best.

Selecting HASH as a Wolf Pick will do that to stock picker, as have subsequent positions (since exited) on more encouraging and better performing businesses such as LOVE and ROMJ. Thankfully, and pardon the pun, many of the poorly run businesses in the cannabis space have been weeded out.

Several microcaps in this space have proven to be better operators. While each has their own warts, the previously mentioned Cannara Biotech and Rubicon Organics fall into that category as do others such as Auxly Cannabis. Glow Lifetech has been trying to join that group, although their model is slightly different than the others.

My first and only review of Glow was last June after their first quarter which received a below average two stars. The stock is down 17% since then. A large reason for that sub par review was their float management and share based compensation. Just two days ago I penned an article on the value destruction of Canada’s microcap drone industry. I could have easily written the same article using microcap cannabis stocks as an example.

During the review I noted not only did Glow experience 3x dilution over a five quarter span, but they had 60M ITM warrants expiring over the next nine months. In multiple subsequent conversations on the stock, I stated that five cents was going to be a continual magnet until they expired. I may have also coined the phrase “nickel humper”. You’ll never guess where the price sits today, a day after posting their 2025 annual financial statements.

I have also felt that Glow could be an interesting swing opportunity once the last of those warrants expired, even referring to them in my annual Wolf Pick article in December. I felt that there were at least three potential catalysts to potentially push the stock in a northern direction between late March and late May. First was the expiration of those final 40M or so warrants and then their two sets of financials ending with their Q1 of 2026 sometime next month. Well, two of those potential catalysts are now in the rear view mirror, and the stock is still hanging on to that five cent figure.

Did Q4 disappoint? Let’s find out.

Balance Sheet:

While the figures are small, the overall state of their balance sheet is solid. They have a current ratio of 2.2 that consists of $1.4M in cash, $444k in A/R, $430k worth of inventory and $250k in other short term assets against just $1.2M in liabilities due over the next twelve months with no debt and just $11k in long term liability commitments.

Unfortunately the company does not provide any details surrounding the state of their receivables but the good news is their current cash position covers their one year liabilities.

Cash Flow:

Let’s call Glow operationally cash flow neutral with just $15k worth of cash burn in 2025, quite the improvement over the $1.35M burned in 2024. They also improved throughout the year with positive OCF over their last two quarters totaling $174k after burning nearly $200k in the front half of 2025.

During the year they also received $560k into the treasury from warrants and options, eliminated all of their $326k of debt and made $100k in asset investments.

Overall, they modestly improved their cash position by 6% during the year.

Share Capital:

• 181.3M shares outstanding with 7% dilution during 2025

• 16.3M options, none ITM with 4.5M at today’s price. 5M would have already expired post financials on March 3

• At Dec 31, 49.9M warrants WERE outstanding. As of today, that figure is 9M. 10.9M were exercised post financials with a little over 30M expiring unexercised

• 31% insider ownership with the majority of that owned by their strategic partner, Swiss PharmaCan

• No activity on the open market, and multiple insiders chose to pass on exercising those 5 cent warrants

Income Statement:

Glow hit a milestone in 2025 eclipsing the two million mark in annual revenue finishing with $2.05M, a 146% increase over 2024. A pretty impressive mark considering they were pretty much a pre-revenue company for the front half of 2023.

While margins were strong at 66.3%, it was a 440 basis point decline over the 70.6% they achieved last year. So on 146% more revenue, that delivered 131% more gross profit dollars.

Total operating expenses actually came in lower than 2024 by 1.6% and that may be a bigger highlight than their revenue performance. When non-cash burning expenses are stripped out (amortization, deprecation and SBC), operational costs did rise by 40%. The biggest savings was from a 65% ($300k) reduction in share based compensation. That shouldn’t take away from the excellent operational leverage they did get within G&A (4.6%) and Manufacturing costs (3.3%). Selling and distribution expenses from commissions and advertising did rise significantly (161%) but overall there is reason for encouragement with only 40% more cash based spending on a 146% revenue increase.

Overall, they were able to halve their operational loss from a year ago, $727k vs $1.53M.

Like their cash flow performance, things look much improved in the back half of the year as well, losing $184k in the final six months compared to $559k in the first six with a quarterly best $78k loss in Q4.

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Overall:

As a whole, I think anyone would have to concede that Glow Lifetech had a fairly successful year with many achievements. The revenue jumps out clearly, but they also eliminated what remained of their debt, achieved positive cash flow in both quarters down the stretch, significantly shrunk losses as the year progressed and had a much cleaner outlook on their float as they entered 2026.

But.

One can’t ignore their QoQ performance which was down by over 19% from Q3. Perhaps I have not read everything that the company has put out since their financials were released, but if they addressed this, I’ve missed it. Distributing to retail will undoubtedly create some revenue lumpiness (Q2 was lower than Q1 too) but 19% does feel rather significant. That upcoming Q1 which we expect to see next month that initially looked like a slam dunk - perhaps now not so much.

I still sense that overall Glow is headed in a very good direction however as we could see a similar rebound like earlier in the year. They have over 2000 more distribution points (stores x sku’s) heading into ‘26 than they did in ‘25, increased their presence post financials in two provinces and had their first entry into the Canadian medical channel.

So we have a $9M market cap here trading at a 4.5x annual revenue but not yet there to introduce any profitability metrics. How much are they worth? I’m not sure I have a number in mind, but I’ll end with this. One year ago on April 9th, the stock traded as high as 7 cents, and are currently at 5 If you liked them then, you should like them a lot more today as they are a much better looking company at a 29% discount from a year ago.

I’m upgrading them. I want to give them three stars but holding back. Maybe next month’s Q1 with continued progress. Swing play at the very least seems very much in play.

2.75 stars. Let your Soul Glo.

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Disclaimer:

My intent is for my reviews to be a bolt on to due diligence that you have already completed. I receive dozens of review requests a week, therefore my own DD may be great or none whatsoever. Unless otherwise stated or implied, my opinions are on the financial performance of the company based on their most recent filings. I conduct these reviews to assist other retail investors whose research skills are limited when it comes to reviewing financial statements. I do not accept compensation of any kind from companies I review.

Wolf FINS Reviews are intended to be informational and are based on personal opinion. They are not intended to be financial advice, and all readers are encouraged to perform their own due diligence prior to their investment decisions, including discussions with their investment advisor.

I have not reviewed Volatus in almost three years. Since I reviewed one of their competitors (Draganfly) less than two weeks ago, it felt appropriate to take another look at them too. I’ll attach that review below for comparison purposes. I didn’t win many friends with that review and my instinct tells me that will be true here also.

At the end of 2022, I liked Volatus enough to award them with three stars, but changed my tune six months later by downgrading them. That was my last official review of the company. Much has changed since then including the merger with serial underperformer Drone Delivery Canada back in May of 2024. More notably, the sector has been red hot.

Volatus has rewarded shareholders handsomely in the past twelve months with a return of well over 4x, from $0.17 per share to $0.73 today while reaching a high of $0.97 in late July.

The longer term five year chart isn’t so kind however showing a decrease of 50%, although that significantly outperforms the 97% erosion in share price value that Draganfly experienced during the same time span.

Once again, I’ll pose the question - is there anything here other than an exciting theme play? Let’s try to find out.

Balance Sheet:

Volatus has a healthy and liquid looking balance sheet with a current ratio of 3.8 that consists of $41.1M in cash, $3.4M in receivables, $3.3M worth of inventory and $1.8M in prepaids over top of just $13.1M in current liabilities. Their cash position alone is 3x their current one year financial commitments.

The quality of their receivables could look a lot better with more than 45% over 30 days, although there is no indication of what Volatus’ credit terms are.

Volatus has over $19.5M worth of debt, $7.9M of those in convertible debentures with the balance in more traditional debt across seven different loans and notes. Nearly 75% or $8.65M is due in within 2026.

A good portion of this debt are under what I’d refer to as non-friendly rates and the company’s disclosure and details are severely lacking as well, only telling us the following:

• Aircraft loans bear interest at rates ranging between 8.05 to 12% with expiries between July 2027 and Aug 2030.

• Vehicle loans bear interest at rates ranging between 9.3% and 14% with expiries between August 2026 and June 2032

• Promissory notes bear interest at rates ranging between 0% and 15.50% with an expiry in 2026 and 2029 (note 14 provides no further detail)

• Other loans consist of loans maturing within the next 12 months and have an interest rate between 9% and 12%

The $7.9M of debentures have a rate of 12.5% and expire in October of 2029, and convert the principal at $0.202/share

Cash Flow:

Volatus burned $7.5M in operational cash flow during 2025, nearly a $5M improvement over 2024 when they burned $12.4M.

They also spent $1.67M on asset additions, but were much busier in the financing activities, paying down $6.9M of debt, raising $44.8M through several equity raises, received $9.2M from warrants and stock options, and an additional $2.8M from convertible debentures. I sense the next section will be busy as well.

Share Capital:

• 668.2M in what has become an increasingly bloated float with 43% dilution alone in the past year

• 16M options all ITM

• 9.6M RSU’s - 9.95M awarded and 382k forfeited in 2025

• 51.1M warrants - 36.3M ITM with the remainder at $0.76

• Approx 37M in future dilutionary measures attributable to convertible debentures (principal only)

• Fully diluted float including ITM items approx 767M with an implied MC of $560M

• 20% insider ownership, 6% institutional (per SimplyWallSt)

• No insider activity on the open market in the past year

Income Statement:

Volatus achieved $34.2M in revenue in 2025, an increase of 26% over last year. Gross margin suffered on those additional sales with 270 basis points of erosion from 35.2% in 2024 to 32.5% last year. On 26% more revenue, they only delivered 16% of that to the gross profit line.

Total operating expenses grew by 27%. Cash burning expenses (depreciation, amortization and SBC removed) rose by 22%, or $3.4M. This all combined for a worsening of operating losses by 36% or $4M compared to 2024.

Financing costs relating to their debt soared by 77% YoY and after a few other one time items net losses totaled $22M in 2025, $8.7M or 65% worse than losses suffered in 2024.

When solely looking at the quarter alone, it’s worse that the total year in all aspects. Revenue was up by 7% but with gross profit erosion of 500 basis points to 33%, they delivered 7% less in gross profit dollars.

With even greater increases in operational spending and finance costs, losses from operations worsened by 165% and net losses by 107%.

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Overall:

Fundamentally, choosing between the previously reviewed Draganfly and Volatus is akin to choosing between Cinderella’s step sisters - ugly or really ugly. But if I were forced to choose, FLT would come out ahead due to better margins and a slightly better history of spending and cash burn. Unfortunately those variations come at twice the market cap valuation, and Volatus is saddled with debt at higher than market rates.

Volatus has increased in market value to just shy of $500M. You get all that for a company who has $73M in net losses and over $40M in cash burn in the past five years. Additionally, while they grew revenues this year, they could not eclipse the $35M in pre-merger revenue from 2023.

In the company’s annual MD&A, they list fifteen accomplishments during the year. Only one of them relates to a signed contract of $9M ($4.5M guaranteed), while TEN of those accomplishments relate to raising capital or dilutive measures.

Post financials, Volatus up-listed from the Venture to the TSX.

What did Volatus do well in 2025? Raise capital is at the top of the list through five separate financings, and that does not include debt for equity transactions or increases to convertible debentures. That gives them a strong enough balance sheet to withstand 2025 performance levels for at least two years without additional funding.

With all of my negativity here, I’m not blind in terms of the overall bullishness of the sector. This has been apparent for several months with NATO and other countries significantly increasing defence spending budgets, and the use of drone activity in both the Iran and Ukraine conflicts. This sector is huge and is only going to grow exponentially in the next few years.

To be honest, no small cap across North America has great fundamentals, and you can throw in PARRO out of France in that mix too. They all trade at very high P/S multiples while burning large amounts of cash and suffering substantial losses.

I think we need to also discuss management’s credibility. At this time last year, Volatus was touting a $600M sales pipeline. They did so within multiple MD&A’s last year and was included in their investor presentations. It’s notable that this reference is no longer contained within their MD&A and has been reduced by $100M in their latest deck. I’ve ranted plenty on this metric usage in other reviews, but to sum it up, they are virtually meaningless without any corresponding historical metric on how sales pipelines convert to revenue. One $9M contract signed last year supports this.

For reference I have attached the company’s latest investor deck from last month:

Ultimately I think the whole sector is tradable, with most of it being un-investable, especially at these astronomical valuations. The biggest winner in this space almost assuredly will come from being an acquisition target. Whomever guesses correctly on the who and how much may be the ultimate winner.

These two reviews have inspired my next article which will be part of my Scholastic Series. Look for that shortly.

I want to give them 1.5 stars. But I just gave that rating to DPRO and I hate them more. 1.75 it is.

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Disclaimer:

My intent is for my reviews to be a bolt on to due diligence that you have already completed. I receive dozens of review requests a week, therefore my own DD may be great or none whatsoever. Unless otherwise stated or implied, my opinions are on the financial performance of the company based on their most recent filings. I conduct these reviews to assist other retail investors whose research skills are limited when it comes to reviewing financial statements. I do not accept compensation of any kind from companies I review.

Wolf FINS Reviews are intended to be informational and are based on personal opinion. They are not intended to be financial advice, and all readers are encouraged to perform their own due diligence prior to their investment decisions, including discussions with their investment advisor.

This will be my first review of this tiny picocap trading at a $9.5M valuation. It’s not the first time I have done any research on them however. They did come up as a suggestion for a 2026 Wolf Pick, but they did not make the cut for reasons I cannot recall.

While the stock is up 30% over the past year it trades very choppy, down nearly 50% from their July highs. If one zooms out, Innovotech is trading at nearly the same valuations they did five years ago.

Innovotech Inc. is an established and scaling life sciences services and technology company specializing in contract research, analytical, and microbial testing within regulated healthcare markets.

The company announced their annual results on Tuesday evening reporting more than double 2024 revenues. The market responded positively on Wednesday sending the stock up 22%, but then were nailed to the cross by 10% on Thursday to end the short week leading into Easter weekend.

It feels like a company who struggled to hit $1M in sales five years ago that just doubled their revenue this year should be in a better share price position, and not down by 50% over the last nine months.

What’s missing? Let’s try to find out.

(Paywall will be removed on Saturday April 11th and be available to all readers)

Balance Sheet:

While the numbers are small, Innovotech has a very liquid and solid looking balance sheet. They sport a current ratio of 6.7 that consists of $1.6M in cash, $700k in receivables, and $500k in other short term assets against only $451k in liabilities due over the next twelve months (deferred removed).

Receivables are solid, as evidenced by their aging (not ageing) report with 89% of money’s owed being current.

Longer term, they have $100k in contingent consideration from last years acquisition and $160k in convertible debentures.

We’re off to a very solid start.

Cash Flow:

Over the past two years, Innovotech has been just on the wrong side of cash flow neutral, experiencing $62k of cash burn in 2025, slightly better than the $82k suffered in 2025.

The company converted $550k worth of long term investments to cash, and purchased $470k worth of assets during the year. They raised nearly $800k to the treasury through options and warrants exercised, raised $200k through convertible debt and paid out $100k of contingent consideration.

Overall, they improved their cash position by over 120% during 2025, which makes the $200k in convertible debentures a curious decision, although it was done at a premium to market at $0.25.

Share Capital:

• 54.4M shares outstanding with 10% dilution occurring during the year, all through warrants (4.3M) and options (370k) exercised

• 1.9M options with 1.4M currently ITM with all of those expiring within one year

• 800k potential dilution from convertible debentures, 25 cents expiring in October of 2030.

• 38% insider ownership (per Yahoo Finance)

• Plenty of insider activity with most on the share acquisition side including several warrant and option exercises above the current share price

Income Statement:

As I mentioned in the opening, Innovotech had a solid year on the top line with $4.53M in revenue, 107% better than their previous year. Margins also improved by 230 basis points to 52.9% which helped drive gross profit dollars 116% higher.

The company falls well short of achieving the elusive Wolf Trifecta however with 118% more in cash burning operating expenses. This significant increase in spending was experienced in all buckets - G&A costs rose by 102%, R&D by 89% and Marketing and business development increased by 5.5x from $66k to $364k.

All of that performance from revenue and margin lines were essentially wasted from an overall profitability perspective. In fact their net income decreased YoY from $214k down to just $88k on the year.

In Q4 alone, revenue was more comparable as their Keystone acquisition occurred in mid Q4 of 2024. Those revenue gains from Q1 - Q3 which surged by numbers between 150% and 270% screeched to a halt with just an 8% gain to close out the year including their organic business down by 6%.

The rest of the Q4 is a bit of a mixed bag. While the total year had a great performance on margin, Q4 was 800 basis points lighter resulting in a 7% erosion of gross profit dollars. Then total expenses were up by 42% on only 8% more revenue and less gross profit. Even with a birdie on grant income, net income was down by 62% in the quarter. On the plus side, it was their most profitable quarter of the year.

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Overall:

That income statement felt like a lot to absorb, particularly for a sub $10M market cap company.

Some companies do a better job than others with transparency in their financial statements and I have to say Innovotech is one of the better ones. They do an excellent job of breaking down their business by segment and geographic region. As you can see, while their organic business suffered in Q4, it was quite strong for the total year, up 59%.

If we look backward to the Keystone acquisition, it was done for a total of $517k ($300k cash + stock) with $300k in potential earn outs based on revenue and positive net income metrics. A portion of those earn outs were paid out in 2025 leading you to believe those goals were met. Considering that overall margins improved during the year and Keystone nearly generated $1.4M during their first year, it appears to be a very solid acquisition. Management is continually looking for other similar opportunities, and once you’ve seen one seemingly successful acquisition it should give you more confidence should they announce another.

Where do they go next is the question, and that’s where additional due diligence begins. For me, let’s just say that didn’t go very well initially. From their investor relations website, I was asked to enter my name and email address in order to download their investor deck (Note to everyone else, don’t do this).

After entering my information, I clicked the link and received this:

Also, if you recall my introduction, I gave a brief overview of what the company actually does. I didn’t write that, instead it was a cut and paste from the latest press release. What you may notice is I had to correct a spelling mistake within it. This is boiler plate stuff folks, so my introduction to how they communicate with investors did not get off to a great start.

Thankfully, Smallcap Discoveries has done a series of interviews with the company dating back at least five years. I’ve attached the most recent for your viewing and researching pleasure.

When you go through Innovotech P&L, it shows great organic and overall revenue growth, margin improvement but no operational leverage to take any of those gross profit gains down to the profitability lines. In fact, profitability became worse year over year. I therefore wanted to see some rationale within the MD&A that would speak to increases in headcount due to the acquisition and an indication that future synergies would ultimately gain some of that operational leverage not seen in 2025.

But I didn’t. Instead I surmised these margins improvements may not be sustainable as it is not a primary focus and expenses were just consistent with growth without any comforting statements that would lead me to believe that they would improve.

I won’t go as far as saying I think Innovotech is overvalued. In fact I’d say they look like a much better company than they did five years ago at the same share price. But there isn’t much within these financials to make me want to become an investor, nor did I feel ultimately inspired by the CEO within the attached interview - Paul Andreola asked him all the right questions to provide that opportunity.

Ultimately, it’s a very uninspiring three stars from me.

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Disclaimer:

My intent is for my reviews to be a bolt on to due diligence that you have already completed. I receive dozens of review requests a week, therefore my own DD may be great or none whatsoever. Unless otherwise stated or implied, my opinions are on the financial performance of the company based on their most recent filings. I conduct these reviews to assist other retail investors whose research skills are limited when it comes to reviewing financial statements. I do not accept compensation of any kind from companies I review.

Wolf FINS Reviews are intended to be informational and are based on personal opinion. They are not intended to be financial advice, and all readers are encouraged to perform their own due diligence prior to their investment decisions, including discussions with their investment advisor.