Esto es el reporte del libro de trades de corto plazo, separado del Substack mensual de largo plazo. No es asesoría de inversión. Uso margen en este libro y lo aclaro siempre. Es mi cartera y mi disciplina, no la tuya.

1. La pieza que ordena todo el reporte

El periodo mayo + arranque junio dejó dos historias que no se pueden contar por separado. La primera es MSFT, mi ganador máximo del libro: el Call $450 Julio entró a $7.00 y salió a $12.00, +71.4% return con un sizing del 29% del libro. Eso aportó +20.71 puntos porcentuales al libro entero. Ese trade solo justifica casi todo el periodo.

La segunda es NFLX, mi perdedora máxima: el Call $100 Julio entró a $2.04 y salió a $1.21, -40.7% return. Con sizing del 50% del libro, eso dejó -20.34 puntos porcentuales al libro entero. Ese trade solo casi neutraliza al MSFT solo.

Esa simetría es la idea principal del reporte. Un ganador máximo y una perdedora máxima dejaron net flat al libro entre los dos. Todo el +58.79% del periodo viene del resto, no de los dos trades grandes. Y la disciplina nueva del libro a partir de junio es directamente la lección de esa simetría.

Los números:

El +58.79% es del chart del broker, ventana 3M. El dato viene apalancado por 31% de margen. El unlevered real es menor, pero la lectura honesta es la del broker porque eso es lo que la cuenta hace.

2. El contexto macro de mayo

Risk-on tranquilo. VIX hundido cerca de 15. Tasas a 10 años pegadas en ~4.5%. El único sobresalto fue el ruido geopolítico con Irán. La ventana de IPOs se reabrió, hasta SpaceX presentó papeles.

La historia clave del año hasta ahora la veo así:

ÍndiceYTD12MRussell 2000 (IWM)+16%+42%S&P 500 (SPY)+10%+29.5%

El IWM le saca 6 puntos al SPY en el año. La rotación hacia el riesgo pequeño finalmente se está dando después de años de small caps quedándose atrás. Setup macro lo respalda: crecimiento acelerando, inflación bajo consenso, Fed recortando. Todo viento de cola.

El matiz que vale la pena marcar. Las small caps son las más sensibles al titular de Irán. Suben fuerte con esperanza de acuerdo, caen con tensión. IWM se está comportando como el termómetro del apetito de riesgo. Eso afectó el timing de algunos trades del periodo y explica por qué entré y salí más rápido en ciertos nombres.

La narrativa para enmarcar las decisiones del mes: El dinero por fin está saliendo de las 7 magníficas y bajando a las small caps.

3. Top 5 cerrados — los que pagaron el periodo

Cinco trades cerrados aportaron +49.88 puntos porcentuales al libro. Los 24 cerrados restantes aportaron juntos roughly +9 puntos porcentuales más (incluyendo perdedores). La asimetría real del libro está en estos cinco nombres. Unos pocos trades grandes que funcionan pagan por todo el ruido del resto.

Top 3 abiertas al cierre — por return %

CRWV es el LEAP grande del libro al cierre. Capacity demand para AI compute sigue ahead of supply. Lo dejo correr hasta acercarme al strike $120. HIMS son las dos puntas de la estructura multi-leg que explico abajo.

4. MSFT — la historia de los cuatro intentos

MSFT pagó muchísimo al libro pero también fue donde di un paso de más. Lo trabajé cuatro veces.

Trade uno. Call $450 Jul-26. Entry $7.00, exit $12.00. +71.4% return, +20.71% al libro con size 29%. La entrada en la primera ola de optimismo del ciclo de earnings de tech. El setup técnico se desarrolló limpio, el subyacente rompió resistencia, el premium estaba relativamente barato por la combinación de strike y vencimiento. La salida cuando el delta empezó a perder convexidad cerca del strike y el theta empezó a comerse el premium más rápido. Salida de regla, no de esperanza.

Trade dos. Call $430 Jun-26. Entry $9.08, exit $14.53. +60.0%, +9.00% al libro con size 15%. Mismo nombre, strike más bajo, vencimiento más corto. Lo abrí en paralelo al primero. Salida más temprana porque el theta empezaba a pegar más fuerte por el vencimiento más cercano.

Trade tres. Entró y salió rápido, no fue tan bueno como los dos primeros. Ahí ya tenía que haberme dado cuenta de que el momentum del subyacente se estaba enfriando.

Trade cuatro. Call $440 Jul-26. Entry $12.56, exit $8.51. −32.2%, −1.61% al libro con size 5%. Salida en pérdida. El setup ya no estaba.

La lección honesta. Los dos primeros fueron impecables. El cuarto fue un trade que no debí abrir, lo abrí por inercia de los dos primeros. El éxito reciente puede empujar a tomar trades que no cumplen el setup original. La mano que firma el cuarto trade no es la misma que firmó el primero, y eso es exactamente cuando tengo que parar. En agregado MSFT aportó positivo gigante al libro, pero el cuarto trade me recordó que la disciplina no se relaja por ganar previo.

5. GME — multi-leg con final mixto

La historia de GME del mes vivió Sólo en el libro de trades, NO en TMC fundamental. Esa separación es disciplina, no semántica.

Leg uno. Call $18 18-jun-26. Entry $0.77, exit $1.06. +37.1% return, +5.57% al libro con size 15%. El catalizador inicial fue la noticia de Ryan Cohen y eBay. El setup técnico se alineó con esa narrativa. La salida cuando el subyacente todavía corría y el delta estaba haciendo su trabajo.

Leg dos. Call $18 30-jun-26. Entry $0.61, exit $0.49. −19.7% return, −2.96% al libro con size 15%. El leg que se quedó cuando el rebote no llegó. Salida por stop después de aguantar más de lo que la regla decía.

Neto consolidado de los dos legs: positivo al libro. Pero el leg perdedor mostró exactamente la disciplina que sigo aplicando: Cuando la regla del stop se toca, se ejecuta. No se debate, no se espera el rebote, no se reduce posición a la mitad. Ese leg me costó por esperar de más, no por la tesis.

El aprendizaje cruzado con MSFT es interesante. En MSFT el primer trade ganador me hizo abrir un cuarto que no debía. En GME el leg ganador me hizo aguantar un perdedor de más. El patrón es el mismo: la psicología del ganador previo empuja a saltar la regla siguiente.

6. NFLX — la lección más cara del periodo

Aquí va la honestidad que diferencia el contenido del de un trader que solo presume ganadores.

NFLX Call $1100 Jul-26. Entry $2.04, exit $1.21. −40.7% return. Con sizing del 50% del libro, eso dejó −20.34 puntos porcentuales al libro entero.

¿qué tan grave fue? El MSFT Call $450, mi mayor ganador del periodo, aportó +20.71%. NFLX dejó −20.34%. Un trade me regaló los puntos que el otro me había dado. Dos posiciones, dos años de research fundamental encima de cada nombre, dos meses de holding de cada uno, y entre los dos la cuenta quedó flat.

El problema no fue la tesis. Fue el sizing. 50% del libro a una sola call de opciones es desproporcionado al edge real del setup. Cuando le pones la mitad del libro a una sola posición de opciones sin que la convicción esté en línea con el tamaño, una pérdida normal de un trade de opciones (-40% de premium) se convierte en una Pérdida estructural al libro entero.

Esto no es trading agresivo. Esto es sizing imprudente.

La disciplina nueva que sale de NFLX es estricta a partir de junio. El sizing máximo por posición individual va a estar acotado al 20-25% del libro incluso con alta convicción. Si el setup justifica más exposición, se construye en legs separados con strikes y vencimientos distintos, para que el riesgo total esté distribuido, no concentrado en un solo strike y vencimiento.

Ese cambio de regla es el aprendizaje más caro del mes y es la razón principal por la que estoy contando este trade tan abierto en este reporte y en el video.

7. HIMS — la estructura multi-leg abierta

Estructura abierta a finales de mayo, todavía corriendo al cierre del 2-jun:

• 500 acciones de HIMS @ $25.42, current $27.69, +8.9% (size 9.2%, +0.82% al libro)

• 2 LEAPs Jan-2027 largos: Call $20 +17.5% y Call $25 +20.2%

• 3 covered calls Jun-2026 cortos en strikes $15, $30 y $32

La idea de la estructura: posición core con acciones para participar directo en el spot. LEAPs largos para amplificar el upside si el ticker corre los próximos 12-18 meses. Covered calls cortos para bajar el costo de carry. El net delta queda largo pero con carry reducido por las primas vendidas.

Los dos LEAPs ya están en +17% a +20%. Las acciones y los covered calls son las piezas que se mueven con el spot. Al cierre del periodo los subyacentes corrieron y los covered calls cortos están en rojo, pero los LEAPs lo compensan más que de sobra. El setup completo es ~18% del libro al cierre de mayo.

Qué necesita para funcionar: que HIMS no rompa el chart en el lado bajo. Si HIMS corre fuerte, los covered calls limitan upside arriba del strike pero los LEAPs lo compensan. Si HIMS baja, salgo de la estructura completa cuando rompe el setup técnico.

8. Las perdedoras del periodo — transparencia completa

El libro también tuvo trades que no funcionaron. Los más relevantes por contribución negativa al libro:

La suma de las pérdidas brutas es aproximadamente -33 puntos porcentuales sobre el libro. La suma de las ganancias brutas de los cinco top winners es +49.9 puntos. El delta neto + el resto de los cerrados pequeños menores explican el +29.89% acumulado de cerrados.

Las pérdidas chicas (LXFR, FLNC, META 600 dic) son las que esperaba ver. Son trades que no funcionaron pero cuyo size limitó el daño. Esas no me preocupan, son parte de la operación normal de un libro de trades. El patrón positivo ahí es que el sizing chico funciona como protección.

Las pérdidas medianas (CCLD, GME 30-jun, MRKR) son frustración pero también controlables: -2% a -3% del libro cada una. MRKR explicit como biotech especulativa desde el inicio, ese era el flag. CCLD fue trade técnico aparte de la posición de cartera; el catalyst week se cumplió en los catalizadores pero el spot no respondió. GME 30-jun ya cubierto.

La única pérdida grande es NFLX. Eso es lo que la regla nueva del sizing pretende evitar a partir de junio.

El caso del corto CRWV Call $125 jun-26 con return -173.3% pero solo -2.51% al libro es interesante: short de calls que se movieron contra mí. El sizing acotado (1.5%) limitó el daño aunque el % de la posición fue brutal. Eso confirma que el sizing chico para shorts especulativos es la disciplina correcta.

9. El batch de liquidez (referencia histórica)

Los cinco primeros trades del libro fueron el batch de liquidez del 14 al 17 de abril. Hold de tres días, setup técnico de liquidez:

Cuatro de cinco ganadores, Win rate 80% del batch. La lección es la del sizing: 20% del libro cada uno, el perdedor casi no se nota. Cuando ves un setup que cumple en varios nombres a la vez, está bien tomar el batch chico, no buscar el ganador perfecto. La disciplina del tamaño es la que protege.

10. Cómo encaja con el resto del proyecto

El libro de trades No es el corazón del proyecto. Es el portafolio más chico en capital asignado y el más activo en gestión. El corazón es TMC Largo Plazo, ese es el que escribo deep dives, donde hago el research fundamental, donde construyo la convicción de meses o años.

Los trades existen por dos razones. Una, porque a veces el setup técnico de una empresa que ya estudié para TMC me ofrece un trade asimétrico de corto plazo y no quiero dejarlo pasar. Dos, porque diversifica el método: si el mercado castiga microcaps fundamentales, los trades pueden estar en otro régimen y los retornos no están perfectamente correlacionados.

Cuando un trade no funciona pero la empresa sigue siendo buena, se convierte en posición de largo plazo en TMC. Eso ya pasó con varios nombres y es el camino orgánico entre los dos libros.

No uso este libro como recomendación. Uso margen acá. El sizing puede ser agresivo. Los rangos de pérdida y ganancia son distintos. Esto no se puede replicar mecánicamente y no se debe.

11. Acumulado público desde inception

Para que quede registro público:

• Inception del tracking sistemático: 14-abr-2026

• Cash-to-cash 3M al 2-jun-2026: +58.79% (del chart del broker)

• Mayo aislado: +13% al libro

• P&L cerrados acumulado: +29.89%

• P&L abiertos al cierre: +8.63%

• Win rate de cerrados: 16 W / 11 L / 2 E = 55.2%

• Margen usado al cierre: 31%

• Trades abiertos al cierre: 22

El acumulado público se va a actualizar en el landing themicrocapo.com con cadencia semanal o quincenal usando screenshots frescos del broker.

12. Las dos lecciones del periodo

Condenso en dos correcciones operativas que aplico a partir de junio.

Lección uno. Sizing máximo estricto por posición individual.

NFLX me costó casi lo mismo que MSFT me dio. Si no controlas el sizing en el lado abajo, los ganadores grandes no compensan, solo neutralizan. A partir de junio, el sizing máximo por posición individual está acotado al 20-25% del libro. Si el setup justifica más exposición, se construye en legs con strikes y vencimientos distintos.

Lección dos. Cuidado con la inercia del ganador.

MSFT primer trade +71.4%, segundo +60.0%, tercero apenas, cuarto −32.2%. El cuarto trade existe Porque los dos primeros existieron. La mano que firma después de un ganador grande no es la misma que firmó el primero. Ese es el sesgo psicológico a vigilar. A partir de junio, después de dos ganadores consecutivos sobre el mismo nombre, paso a una pausa obligatoria de al menos una semana antes de abrir un tercer trade en ese ticker.

Estas son las dos reglas que voy a aplicar a partir de junio y que sale como producto del periodo.

13. Próximo mes en el libro

Para junio el foco va a ser:

1. Aplicar el sizing máximo estricto. Ninguna posición individual arriba del 25% del libro.

2. Vigilar HIMS multi-leg y resolverlo cuando los covered calls Jun-26 lleguen al vencimiento. El net delta estará claro ahí.

3. Monitorear CRWV LEAP Jan-2028 mientras corre. Dejar correr hasta acercarse al strike $120.

4. Buscar setups técnicos sobre nombres de TMC que ya conozco. CCLD es candidato natural si vuelve a tener setup técnico claro. TGEN si rompe sobre $7 con confirmación de volumen.

5. Mantener la disciplina del max drawdown como guardrail, no como número que toleramos.

6. Publicar el resultado del mes en este reporte separado del Substack + video aparte de YouTube cada mes.

El libro de trades publica resultado mensual aparte del reporte de largo plazo. Esa es la cadencia nueva. El Video 1 del mes cubre los trades, el Video 2 cubre el largo plazo + el cuantitativo. Los dos suben juntos.

14. Disclaimer

Esto es opinión personal y registro público de mi cartera, no asesoría de inversión. Uso margen en este libro de trades. Los retornos son cash-to-cash del broker incluyendo apalancamiento. Los trades de opciones tienen vencimiento y pueden ir a cero. El desempeño pasado no garantiza nada. Invierte solo capital que estés dispuesto a perder, y si decides operar con margen u opciones, hazlo entendiendo el riesgo asimétrico que estás tomando.

Todo el detalle en themicrocapo.com. El reporte mensual de TMC Largo Plazo sale en paralelo a este como Substack aparte. El YouTube tiene el Video 1 con los trades y el Video 2 con largo plazo + cuantitativo. El Discord vía Whop para la conversación diaria.

Hasta el siguiente reporte de trades.

— Fin del reporte del libro de trades, junio 2026 —

Esto no es asesoría de inversión. Es mi cartera y mi razonamiento para mantenerme honesto y disciplinado.

1. La idea principal del mes

Junio empezó con dos cosas en la cabeza que ordenan todo el reporte.

Uno, lancé themicrocapo.com. Ahí ya están vivos los tres portafolios que opero con métricas reales del broker. El link al landing es la primera línea de la descripción y debería ser el primer click de cualquiera que quiera entender el proyecto en treinta segundos. Los detalles del landing van más abajo.

Dos, el portafolio largo plazo tuvo dos noticias críticas que no se pueden pasar por alto. WGS, mi nueva apuesta grande, imprimió un Q1 con miss y guidance cut que tiró la acción 33% el día del print. Y IFA, mi mejor performer del periodo, anunció un bought deal de $20M con una pieza de dilución y otra de selling shareholders. Las dos noticias requieren tesis con tinta fresca, no parafraseo de lo que decía hace un mes.

El reporte va en ese orden. Lo nuevo del proyecto, los resultados, las posiciones nuevas, las noticias materiales por empresa, los KPIs que voy a estar viendo el próximo mes, y las fuentes.

2. Lo nuevo del proyecto: themicrocapo.com

Ya está vivo el landing oficial en themicrocapo.com. Ahí pueden encontrar los tres portafolios que opero, cada uno con métricas reales del broker, no del sheet:

1. TMC Largo Plazo — la cartera fundamental que escribo cada mes acá, microcaps de calidad con horizonte multi-año.

2. Cuantitativo / Momentum — un experimento sistemático que llevo corriendo en paralelo. Modelo de machine learning sobre un universo de ~2,000 small caps US y CAD, rebalanceo semanal, 29 posiciones top. Es experimento personal, no es producto vendible.

3. Short Term Trades — trades tácticos sobre empresas que ya conozco fundamentalmente. El más activo y el más volátil de los tres. El detalle trade por trade del periodo va en un reporte aparte que publico este mes también.

Cada portafolio en el landing muestra return cash-to-cash 3M directo del broker, max drawdown, top 3 holdings por return % y posiciones activas. Voy a actualizarlo semanal o quincenalmente.

El Substack sigue siendo el lugar donde escribo la tesis larga. El YouTube ya está activo, los dos videos del mes (largo plazo y trades) salen como Video 1 y Video 2. El Discord vía Whop para la conversación diaria. Todo lo demás es ruido.

3. Resultados desde el inicio del tracking (14-abr-2026)

Al 2-jun-2026, cash-to-cash directo del broker:

El +12% de TMC es estimación, no cash-to-cash limpio. La cuenta donde corro TMC fundamental es nueva, todavía no tiene 30 días limpios para reportar el real. A partir de julio sale el cash-to-cash directo. Preferí poner el estimado con asterisco que no reportar nada.

El +10.10% del Cuantitativo y el +58.79% del libro de trades sí vienen directo del broker. El libro de trades cerró mayo aislado con +13%. Los tres números reales actualizados en el landing.

4. Current Holdings — las 19 al cierre

5. New Position Notes

$LEAT — Leatt Corporation (entrada $12.14, peso ~6%)

Leatt es fundada por un médico, Dr. Christopher Leatt, que inventó el neck brace. Hace equipo de protección para off-road motorcycle, mountain bike y adventure riders. Headquarters en Cape Town, Sudáfrica. Venden a través de 61 distribuidores globales, 698 dealers en Estados Unidos y un canal DTC propio.

Por qué entré, en orden:

Uno, la industria atravesó cuatro años brutales de destocking post-COVID. El competidor adyacente Dainese se cayó con €100M de pérdida en 2024 y Carlyle se la entregó a sus acreedores. Leatt creció +41% en 2025 mientras Fox Factory y Polaris se niegan a llamar recuperación. Eso es market share gain explícito, no rebote del ciclo.

Dos, el Q1 2026 (12-may) validó la trayectoria con un blowout: revenue $19.51M (+27% YoY), sexto trimestre consecutivo de doble dígito de crecimiento, net income $1.77M (+58%), cash flow operativo $4.55M, cash en balance $17.19M (+30%). Consumer direct +49%, helmets +59% (el gran driver), body armor +25%. La acción saltó +17% el día del print. Mi entrada fue antes del print pero relativamente cerca, así que el move me confirma la lectura.

Tres, el management dice explícito que puede llegar a $70-80M de revenue sin aumentar opex significativamente desde la base actual de $22M. Operating leverage real. Márgenes operativos hoy 7%, peak de 2021 fueron 20%.

Valuación. Base case con 10% de crecimiento y margen bruto 42.5%: 2027 EPS $1.32, +120% upside desde $12. Bull case con 15% de crecimiento: $1.66 EPS, +176% upside.

Riesgo. El founder controla el voting via Series A Preferred (1 share = 100 votes), 80% del control. Eso es alineamiento pero también riesgo binario. Exposure a aranceles vía sourcing China. Si el ciclo no se recupera, el operating leverage trabaja en reversa.

Crédito al research base: Cliff Note #140 de MS Microcaps. Lo digo abierto.

$III — Information Services Group (entrada $4.14, cuenta separada)

ISG vende asesoría a corporativos grandes que están tratando de comprar y gobernar tecnología. Core histórico: sourcing advisory. Motor nuevo: gobierno de IA, que ya es un tercio del revenue y crece 75% YoY.

Por qué entré:

Uno, gobierno de IA es Forced compliance spend bajo el EU AI Act + regulación estatal en USA. El comprador es el General Counsel y el Chief Risk Officer, no el CIO. Stickier y paga más alto.

Dos, en Q1 2026 (07-may) firmaron el Contrato más grande de la historia del firm: $17M de AI governance manejando $300M de gasto del cliente a través de 200 vendors por hasta 8 años. El CEO Connors dijo en la call “esperamos que esto sea un área muy hot para nosotros los próximos años”.

Tres, operating leverage en el print: revenue +3% YoY pero EBITDA +12%, margen EBITDA +111 puntos básicos al 13.5%, operating income +47.7%. Sexto trimestre consecutivo de doble dígito de EBITDA. Headcount casi plano. Textbook setup.

Cuatro, la acción cotiza por debajo del fair value que un artículo bear del SeekingAlpha puso en febrero ($5.35), después de un Q1 que beat por 80% en adjusted EPS. El bear es el piso, no el viento de frente.

Rangos. Bear $5.35-$5.50 (+30%). Base $6.50-$7.00 (+57% a +69%). Bull $7.50-$8.00 (+81% a +93%).

Riesgo. Americas siguió en decline en Q1 (-2.9% YoY). Si no inflexiona en Q2 como management guió, el bull case se rompe. SBC corre $8.5M anuales contra $27M de FCF y el buyback básicamente solo offset la dilución a este tamaño. El bear tiene un punto válido ahí..

6. Company Updates por holding — solo con noticia material

Esta sección la armé empresa por empresa con la noticia que mueve la aguja. Donde no hubo, salto. Al final pongo la lista corta de las que no tuvieron material en el periodo, para que quede claro qué cubrí y qué no.

$WGS — GeneDx Holdings — la noticia más importante del mes

El 04-may, GeneDx reportó Q1 2026: revenue $102.3M (+17% YoY), Miss vs el consensus de $114.1M. EPS −$0.28 vs −$0.01 esperado. Lo más importante: Management bajó guidance FY26 de $475-490M, recorte de -12% en el midpoint. El detonante de la pérdida fue $31.3M de impairment más opex mayor. El volumen de tests exome/genome creció +34% YoY, eso es la pieza limpia.

La acción cayó -32.95% post-earnings.

Mi entry a $51.27 fue post-caída. El current de $51.65 al 2-jun significa que después del crash la acción estabilizó y ya rebotó ligeramente. La lectura es directa: compré el miss después de que el mercado ya descontó el guidance cut. La tesis original de Casdin Capital como ancla y exome sequencing pasando a standard of care en pediatría sigue intacta, pero el reloj de re-rating se corrió. Lo que esperaba para Q2 2026 probablemente toma hasta Q4 2026 o Q1 2027.

Estado de tesis: Patient. La apuesta no era timing de catalizador inmediato, era trayectoria multi-año con un anchor institucional fuerte. El miss me da más asimetría desde el entry actual, no menos. KPI a vigilar: volumen de tests + reembolso por test + comentario explícito de management en Q2 sobre dónde se estabiliza el opex.

$IFA — iFabric Corp — bought deal $20M con dilución y secondary

El 13-may, iFabric anunció un Bought deal de $20M con Beacon Securities como lead + sindicato (Stifel Canada, ATB Cormark, Haywood). Estructura: 4,055,000 acciones treasury a $3.70 (=$15M para la empresa) + 1,352,000 acciones secondary a $3.70 (=$5M directos a selling shareholders). Al día siguiente (14-may) anunciaron Upsize. Cierre esperado 04-jun-2026.

Lo que me gusta. La empresa toma $15M frescos al balance en el techo histórico del precio. Eso es capital strength. El secondary de $5M también es señal de que insider/early holders pueden liquidar parcial en buen momento.

Lo que me preocupa. El secondary específicamente es de selling shareholders, lo cual históricamente correlaciona con momentum de corto plazo cayendo después del cierre. La dilución de 4M acciones nuevas no es trivial sobre la base.

Estado de tesis: Mantengo, vigilando el post-cierre. El +144% desde mi entry hace que esta posición sea ya un compounder. El PT original está excedido y necesito refrescar el modelo con los números nuevos del Q1 2026 (revenue +288% YoY a $27.5M) y con el cap structure post-cierre. Mientras tanto, no agrego, no vendo.

$CCLD — CareCloud — cerró adquisición Empower 22-may

El 22-may, CCLD cerró la adquisición de Empower Healthcare & Compliance Partners. Transacción 100% cash de operaciones, no impacto material esperado en 2026. Empower aporta servicios de compliance / audit / risk a >45,000 providers. Los servicios de Empower están disponibles a clientes CCLD desde Q2. Launch de SaaS compliance AI-powered en H2 2026. Esta es la primera tuck-in post-Series B redemption y la decimoctava desde el IPO. Abre nicho compliance al mercado de healthcare providers.

Contexto. La cadena de catalizadores de mayo se cumplió completa: Q1 earnings (14-may), Series B redemption (15-may), Analyst Day NYC (19-may), Empower acquisition (22-may). La acción NO respondió como esperaba en el periodo. Mi entry $3.14, current $2.48, -21.6%.

Estado de tesis: En revisión. La tesis fundamental se materializó. El mercado no la premió. Eso es el peor escenario operativo. Probablemente para el próximo reporte tengo que decidir si recorto peso o si aguanto un trimestre más. La decisión depende del próximo print de earnings y del primer revenue contribution visible de Empower en Q3.

$CAI — Caris Life Sciences — Q1 print fuerte + Druckenmiller confirmed

El 07-may, Caris reportó Q1 2026: Revenue $216.2M (+79% YoY), gross margin 65%, EBITDA ajustado positivo $26.2M. Refinanciaron facility de $400M con Blue Owl + Blackstone. En paralelo, lanzaron Caris MI Clarity (AI prognostic tool, 05-may), publicaron estudio del Lookback Program (15-may) y arrancaron campaña “Behind the Diagnosis” (18-may). Druckenmiller via Duquesne mantiene 1.89M shares (~$33.87M, ~1% del portafolio). Annual meeting 04-jun-2026.

La posición está al -2.5% desde entry $16.68. Cancer diagnostics. PT $40, +144% upside.

Estado de tesis: Strengthen. Druckenmiller como ancla confirmada. Revenue acelerando +79% YoY. EBITDA positivo (eso era el catalizador grande). La posición se queda y el deep dive completo va en el Substack en los próximos meses.

$QTRX — Quanterix — CFO renuncia + tempus partnership

En Q1 2026 (06-may): Revenue $36.4M (+20% YoY), cash $103M, adjusted EBITDA loss $9.8M. Partnership con Tempus AI confirmada: LucentAD Complete integrado en Tempus Next health systems. CMS reimbursement rate de $897 establecido. FDA 510(k) submission para test multi-analito Alzheimer’s pendiente, decisión esperada H2 2026.

El 12-may, CFO Vandana Sriram renunció. Sale el 15-jun. Management arrancó búsqueda de sucesor. Annual meeting el 09-jun.

Tesis: valuación extrema + Alzheimer biomarker tailwind. PT $10 = +184%.

Estado de tesis: Vigilancia elevada. Revenue acelerando, Tempus partnership concreta, CMS reimbursement establecido = tres data points positivos. CFO turnover en biotech pre-aprobación FDA es flag operativo. No es thesis breaker pero baja la convicción hasta que veamos al sucesor.

$LEAT — Leatt — Q1 +27% revenue confirmó la tesis

Cubierto en sección 5. El Q1 saltó +17% en la acción el día del print, +27% revenue YoY, sexto trimestre consecutivo de doble dígito. Confirmación de la tesis original. Estado: Strengthen.

$NAUT — Nautilus Biotechnology — Q1 beat + early access H2

El 02-jun, Nautilus reportó Q1 2026: EPS -$0.12 vs -$0.17 esperado (beat 29.4%), stock +11.6% pre-market. Opex bajó -14% YoY a $16.1M. Cash $143.4M, runway confirmada hasta 2027. El oncology proteoform assay entra Early Access H2 2026 (segundo assay después de tau). Onboarded sales leadership team. Revenue del grant MJ Fox creció lento por conflicto Middle East. Launch comercial sigue programado para Late 2026.

Proteomics platform pre-commercial. PT $8 = +188%.

Estado de tesis: On track. Runway hasta 2027 + segundo assay + sales team en lugar son tres milestones que tenía marcados. La posición es la apuesta de “pre-launch que llega a launch sin diluir”.

$QSI — Quantum-Si — Proteus milestones + Early Access verano

En Q1 2026 (07-may), QSI mostró milestones técnicos concretos de Proteus: Sequencing automatizado integrado en el instrumento Proteus (todo el sistema sin intervención manual), Detección de 17 aminoácidos (vs 15 en dic-2025). Roadshow Proteus iniciado en DC (30-abr) y Houston (05-may). Early access “este verano”, launch comercial fin 2026. Cash $190.4M, runway suficiente para llegar al launch.

Launch antes que NAUT. PT $4 = +239%.

Estado de tesis: Strengthen. Los milestones técnicos son lo que necesitaba ver para que el pre-launch siga siendo creíble. Early access este verano es el primer catalizador real con fecha.

$CLFD — Clearfield — NOVA Platform + BEAD slow

Q2 FY2026 (07-may): net sales $34.4M, net loss -$0.04 EPS. Lanzaron NOVA Platform para edge computing + AI infrastructure. Management explicó que BEAD está más lento de lo esperado, ahora es opportunity de FY2027 (no FY2026). Branded como “Fiber to the Future” (AI-fiber + BABA compliance).

PT $100 = +108%.

Estado de tesis: Deslizó. El BEAD pushout a FY27 corre el reloj de la tesis. NOVA Platform es opcionalidad linda pero no contracter. Si el chart rompe el setup técnico, esta sale antes de que se descomponga.

$HMM.A — Hammond Manufacturing — sales hire (flag operacional)

El 01-jun, Hammond nombró a Jason Tino como Regional Sales Rep para Southwestern Ontario (Electrical Enclosures Division). La noticia no es material para tesis pero Confirma momentum operacional. La acción cerró C$18.45 el 29-may (vs entry C$15.55, +18.6%).

Estado de tesis: Intacta. El ángulo escondido de data center sigue sin estar en el lenguaje de management pero los movimientos operacionales (capacity expansion + canal de sales) son consistentes con la tesis. El Q1 2026 (récord) ya lo cubrí en el reporte de mayo.

$TGEN — Tecogen — sin noticia nueva, pero el dato sigue caliente

No hubo noticia material posterior al 20-may. El Vertiv 1 MW PO + Q1 ya fueron 13-may y los cubrí completos. La posición sigue +54% desde entry.

Estado de tesis: On track. Catalizador grande sigue siendo el reference site de Vertiv operacional en Q3 2026.

Otros holdings sin noticia material en el periodo

TTZ.V (+57%), SIF (+43%), OPXS (+5%), FSI (-1%), ACFN (+1%), MOJO (-30%), KTEL (-40%). Todos los Q1 ya los cubrí en el reporte de mayo. Lo que importa siguiente es Q2 para varios (FSI, ACFN, OPXS) y el primer catalizador concreto (TTZ.V con Site-TraX deployments, MOJO con distribution event, KTEL con cash position).

MOJO y KTEL siguen en revisión. Los dos tienen disconnect operativo vs precio, y los dos están sized chico precisamente por la posibilidad de que la tesis se rompa. La decisión binaria de mantener o salir va para el próximo Q de cada uno.

7. KPIs próximo mes

Para junio el foco va a ser:

• WGS. Primer comentario de management en Q2 sobre dónde se estabiliza el opex post-impairment. Volumen de tests + reembolso por test.

• IFA. Post-cierre del bought deal (4-jun). Reacción del precio a la dilución + secondary. Refresh del modelo con el cap structure nuevo.

• TGEN. Reference site Vertiv operacional Q3 2026. Segundo PO de data center. Cost cuts apareciendo en Q2.

• CCLD. Primera revenue contribution visible de Empower en Q3. Decisión sobre peso de la posición.

• NAUT y QSI. Confirmación de early access launches. Avance hacia launch comercial late 2026.

• CAI. Annual meeting 04-jun. Cualquier guidance que el management dé sobre H2.

• QTRX. Sucesor de CFO. Update sobre el 510(k) timeline.

• OPXS. Q3 fiscal con ramp sequential del 25-35% para llegar al guide FY de $43-45M.

• FSI. Q2 print. Panamá + food-grade contract apareciendo en revenue y margen.

• ACFN. Q2 monitoring revenue growth rate manteniendo o acelerando el +22% YoY.

• TTZ.V. Próximo update de Site-TraX o contratos en Middle East/South America.

• MOJO y KTEL. Decisión binaria de mantener o salir.

Deep dives escritos a publicar en próximos meses: WGS, CAI, NAUT, LEAT. Todos con tesis profunda.

8. Notas finales

El portafolio quedó concentrado en 19 holdings con foco claro. La regla nueva del libro de trades (sizing máximo estricto por posición individual, después de la lección NFLX que cubro en el reporte de trades) se aplica a partir de junio.

El siguiente Substack que sale en paralelo a este es el Reporte de Trades de Mayo, con detalle trade por trade del libro de corto plazo. El detalle completo está ahí, incluyendo la historia MSFT de los 4 intentos y la pérdida NFLX que casi neutralizó al ganador máximo del periodo.

En el YouTube los dos videos del mes: Video 1 cubre los trades, Video 2 cubre largo plazo + cuantitativo.

Todo en themicrocapo.com. El Discord vía Whop para la conversación diaria. El Substack para la tesis larga. Instagram para los cortos.

Hasta el siguiente reporte.

Sources

Posiciones nuevas

• LEAT — Q1 2026 transcript (12-may)

• III — Q1 2026 release (07-may)

• III — Q1 2026 transcript (11-may)

Las dos noticias críticas del mes

• WGS — Q1 2026 miss + guidance cut (04-may)

• IFA — Bought deal $20M (13-may)

Updates de holdings

• CCLD — Empower acquisition (26-may)

• CAI — Q1 2026 + Druckenmiller (07-may)

• QTRX — Q1 2026 + CFO renuncia (06-may + 12-may)

• NAUT — Q1 2026 + Early Access (02-jun)

• QSI — Q1 2026 + Proteus milestones (07-may)

• CLFD — Q2 FY26 + NOVA Platform (07-may)

• HMM.A — Sales hire (01-jun)

• TGEN — Q1 + Vertiv 1MW (13-may)

• SIF — Q2 FY26 +39% (08-may)

• OPXS — Q2 FY26 transcript (14-may)

• FSI — Q1 2026 (15-may)

• ACFN — Q1 2026 transcript (01-jun)

• MOJO — Q1 2026 release

• KTEL — Q1 2026 10-Q (going concern)

• TTZ.V — ROM Middle East contract

Landing y plataformas

• themicrocapo.com

• Substack @themicrocapo

• YouTube @6006rodrigo

• Discord vía Whop

• Instagram @themicrocapo

— Fin del reporte de junio 2026 —

Not financial advice. This is just for accountability and to keep my thinking clean.

1. Current Holdings

2. Month in Review

April was a pretty good month for my portfolio. im up +35%. Did plenty of changes, getting in and out of names i already own.

in the past ive mentioned that i was going to go back to the type of investing i enjoy the most. not trading options and mega caps. ive been doing that, but its been a much more active style, kinda stressful in some ways but it helped me a lot last year. so 2026 is looking pretty much the same as 2025, and im planning to keep doing it like this for the rest of the year. with the lessons from last year baked in: not using (a lot of) margin haha, pushing my limits a bit more, and when i see something is not working as expected i cut my losses quick. paper cuts.

theres some companies i dont mind not trading because of liquidity, like TTZ.V or MOJO. but there are others in the portfolio that gives me the chance to trade them. ive also traded other names this month that arent on the list.

so the rule im trying to follow is: protect the equity curve at all costs and dont get attached to any name. if it starts moving down again after i bought i get out quick, and if it gets back up shortly after i dont mind buying 5% above my exit price. its not about catching the perfect entry, its about not giving back what ive already made.

less news flow than march this month. most of the news this time were balance sheet stuff, not new contracts. CCLD got the credit facility and announced the Series B redemption. PPIH put out $54M in Q1 awards. FTEK got $10M in APC contracts. BLM extended the DND deal by $2.9M. and on the last day of the month FEIM dropped the big one, a 3-year revenue target of $150M by FY2029, which is a CAGR over 30%. that one is meaningful because FEIM doesnt usually communicate forward like that.

$TGEN has been going up nicely since it touched $2. helped a lot to bring the portfolio back up because of its weight. ive been trading it as well so my cost basis came down a bit, im not at break even yet but not too far. im giving this one til end of the year, if they dont deliver i dont mind taking the loss but i think the news is coming.

3. Portfolio Changes

Closed / Sold

• Closed $NTWK. even with decent news flow ($10M+ China Transcend go-live in March, the Toyota Leasing Thailand thing on April 7), the company hasnt done much for the stock. ive given it room. at this point theres no reason to keep waiting, id rather have the capital working in names that are actually moving.

Re-Entered

• Re-entered $FEIM @ $50.00. my original average from the first cycle was around $9.80. closed it all when it was around $45. now im back in at $50 on a fresh setup. the backlog has expanded a lot since i exited (March alone added $45M in satellite contracts plus $7M lunar PNT on top of the $83M backlog), so even at a higher price the thesis is more loaded today than when i first owned it. three days after my re-entry FEIM put out the $150M three-year target. good luck timing. if it starts moving the wrong way im out fast, same playbook as everything else.

• Re-entered $BOSC @ $4.85. pretty cheap at around 8-9x trailing EPS ($3.6M net income, ~$0.59 diluted EPS). net cash on the balance sheet, defense compounder, India distribution opening up, CEO with a pattern of guiding flat then raising during the year. the technical setup turned constructive again so i went back in.

• Re-entered $ACFN @ $18.00. exited the first time around $21. AIO partnership is advancing, monitoring revenue is the growth engine (+22% YoY, ~75% gross margin) while hardware/legacy keeps declining. quick own model: revenue $14.5M FY2026 (base, +26%) and $17.4M FY2027 (+20%, in line with management long-term target), 75% GM, OpEx $6.5M / $7.0M, gets me to EPS $1.38 / $1.91 on ~2.5M shares. ACFN is high GM, recurring, low capex, real moat in remote monitoring, so i think 20x forward PE is fair. that puts FY2026 PT at $27.60 (+53%) and FY2027 at $38.20 (+112%). thats the math that justified the entry. if it breaks the chart im out fast, same as everything else.

New Positions

• Started $CCLD @ $3.17. full deep dive in section 4. healthcare IT / SaaS turnaround, capital structure cleanup happening in May, technical setup with multiple compressing moving averages. original idea credit on this one goes to @mexicaninvestor’s write-up back in November 2025.

4. New Position Notes

$CCLD — CareCloud

Why i entered (in order):

CareCloud is a healthcare IT SaaS platform. they sell revenue cycle management, EHR, practice management and AI tools (CirrusAI) to medical practices. it IPO’d as MTBC, went through a brand transition, and spent the last few years restructuring. exiting non-core stuff, slashing costs, refinancing the cap stack, pivoting more toward software.

what got me in, in the order it actually happened:

1. the chart looks amazing. thats what got me looking at the name to begin with. compressing moving averages, three lower indicators turning up, clean setup. the fundamentals came after the chart, not before.
   

   

   
   

2. capital structure cleanup. April 13 they closed a $50M credit facility ($40M term loan + $10M revolver, from Citizens Bank and Provident Bank). April 14 they announced the full redemption of the 8.75% Series B preferred stock. 1,511,372 shares at $27.52, executed May 15. that single event eliminates roughly $3.2M of annual preferred dividends, replaces high-cost preferred with lower-cost debt, and removes the structural overhang thats kept the stock down for years.

3. the operating side is working. seven quarters in a row of improvement. roughly $30M in annualized adjusted EBITDA.

4. catalysts stacking in May. Q1 earnings May 14. Series B redemption May 15. Analyst Day at Nasdaq Marketsite NYC May 19. three independent shots at re-rating in one week.

Valuation frame:

the sell-side screen looks like this:

from Seeking Alpha

At my $3.17 entry thats around 8.6x forward 2026 EPS and 7.5x forward 2027 EPS. Ranges are tight ($0.32 to $0.41 for 2026, $0.35 to $0.49 for 2027) so the few analysts on the name are mostly aligned. Revenue grows from $131M to $142M (+8.3%), EPS from $0.37 to $0.42 (+13.5%). Modest but consistent with a turnaround maturing into stable expansion.

The bull case is just multiple compression unwinding, not aggressive growth. healthcare SaaS peers with similar margins trade in the 12-15x forward EPS range. quick math:

• at 12x 2026 EPS: $0.37 × 12 = $4.44 (~40% upside from $3.17)

• at 14x 2027 EPS: $0.42 × 14 = $5.88 (~85% upside from $3.17)

With the Series B redemption removing the overhang on May 15 plus Q1 earnings + Analyst Day in the same week, the path to a re-rating doesnt need a heroic operational story. It just needs the market to stop pricing this like a no-growth healthcare company at less than 1x sales.

Risk / when im wrong:

I came to CCLD through the chart, and the chart is what gets me out too. if the price action breaks im gone fast. same discipline i run across the whole portfolio. protect the equity curve, don’t get attached. if the setup re-establishes after i exit i don’t mind buying back 5% above my exit price. the point isn’t picking the perfect entry, its not giving back compounded gains. on the fundamental side the catalyst week is binary. If Q1 disappoints or Analyst Day doesn´t deliver a clear 2027 framework, the multiple compression im betting on doesnt happen and i exit on a thesis break, not on a single bad print.

5. Company Updates & News

Only companies with material April 2026 news included.

$CCLD — CareCloud

Full April story is in section 4. three events in one week. $50M credit facility April 13. Series B redemption announcement April 14 (executes May 15). guidance reaffirmed April 16. all of it confirming the cap structure cleanup.

Thesis status: Strengthening. May catalyst week is the next test.

$PPIH — Perma-Pipe International

PPIH announced around $54M in Q1 2026 project awards in April. AI-enabled data center work in North America, National Research Laboratories, and major district heating and cooling stuff in UAE and Saudi Arabia. the Northeast US facility, the one focused on AI data centers and district heating, is still on track for Q2 2026.

The data center pivot isn´t a thesis anymore. It’s showing up in the awards. Q1 was $54M with explicit data center attribution. The Northeast facility is the production asset. The narrative caught up to the strategy this month.

Thesis status: Strengthening.

$FTEK — Fuel Tech

April 28: about $10M in APC awards from utility and industrial customers. the biggest one is integrating FTEK’s SCR technology with two new natural gas turbines for a Midwest municipal utility. Adding 100 MW explicitly to support data center construction. Two more orders from existing industrial customers, one is an SNCR upgrade.

This is the conversion ive been waiting on. FTEK has been telling investors about a $75-100M data center APC pipeline for a couple of quarters now, April 28 is the first concrete proof its starting to convert. Q1 prints May 5. the question is no longer “is the pipeline real” but “how fast can it convert.”

Honestly FTEK is one of my biggest losers in the portfolio, but the position is small (1.94% of the book), so the damage is contained while i wait for the pipeline to actually materialize.

Thesis status: Improving. First conversion data point landed.

$BLM — BluMetric Environmental

April 17: $2.9M extension to the existing Master Service Agreement with Canada’s Department of National Defence for the ROWPU water purification systems. service through WaterTech Canada in Carp, Ontario, completion by end of 2026. the CEO Scott MacFabe called it evidence of “accelerating manufacturing and service activity” with DND.

What i like about this is the repeatability. The DND relationship started as a Master Service Agreement back in May 2025 and now its produced an extension. thats the pattern that makes me think these orders will keep coming without reinventing the wheel each time.

Stock has been weak. down notably over the past month, near the bottom of the 52-week range. that disconnect between operational momentum and price is exactly the entry condition im watching for elsewhere in the portfolio.

Thesis status: Intact.

$FSI — Flexible Solutions

April 15: FY2025 full year results. revenue $38.5M (steady), net income $786K, way down from $3.04M the prior year. operating cash flow $5.5M ($0.44 per share). the decline was about transition costs as they invested in infrastructure. refurbished the Illinois factory for two new food-grade contracts, opened the Panama agriculture/industrial factory.

Call was April 17. Same narrative as before: 2025 was a transition year, 2026 is when the new capacity should show up in margins. thats what im waiting for.

Thesis status: Intact. 2026 is the proof year.

$MOJO — Equator Beverage

April 14: Q1 2026 results. revenue $961,484, up 18% YoY. net income $185,712, more than double Q1 2025’s $84K. distribution expanding. management mentioned “opportunistic share repurchases” and called MOJO the only profitable OTC nonalcoholic beverage company in its category.

Thats now five quarters in a row above $900K of revenue and four quarters of profitability. The slow per-share value compounding thesis is alive. whats missing is the distribution event that re-rates the stock.

Thesis status: Intact and strengthening.

$KTEL — KonaTel

April 16: FY2025 results. revenue $8.45M, way down from $15.50M in 2024. net loss $2.65M. headlines look ugly. but gross margin actually improved to 30.9% from 22.0%, and they posted 700+ wholesale POTS installations with planned expansion in 2026.

the story management is telling is the right one: pivot away from low-margin Lifeline / CPaaS toward higher-margin wholesale POTS replacement. the TAM is real (~22M commercial POTS lines getting phased out) and the gross margin expansion is the leading indicator the pivot is actually working operationally even as revenue contracts.

This is the thesis thats been hardest to wait on. position is down ~57% from entry. but the right question isnt “what’s the stock done”, its “is the pivot working.” the April release suggests it is, slowly.

Thesis status: Intact, but proof-of-pivot still pending.

$BIRDF — Bird Construction

Q1 2026 results scheduled for May 13. monthly dividend of $0.07 declared for April. stock has been steady in the low-to-mid $30s. nothing structural changed in April, the story remains the $11B combined backlog converting through 2026 and into 2027.

Thesis status: Intact, on cruise control.

$BOSC — BOS Better Online Solutions

April 21: RFID division got a $350K order extension from a major Israeli retail chain. Q2 delivery. Modest in dollars but it confirms the RFID division (which was the big question mark coming into 2026) is back to producing recurring orders. combined with the $2.2M Indian customer order in March and the new India sales partnership, the operational picture in Q1 2026 is constructive.

Thesis status: Intact, supports the re-entry decision.

$FEIM — Frequency Electronics

The headline event of the month came on April 30. FEIM announced a minimum three-year revenue target of $150M by April 30, 2029 (end of FY2029). The path implies a CAGR north of 30%. meaningful acceleration vs the recent base, and a public dated commitment from a management team that historically communicates conservatively. They cited the expanding backlog and order book, larger end-markets, and long-standing leadership in space and defense as the foundation. They also flagged optionality not embedded in the $150M floor: quantum sensing, proliferated satellites, space exploration, and alt-PNT. balance sheet stays debt-free with cash sufficient to fund the growth.

The timing is interesting. release came in advance of investor conferences scheduled for May and June. Management wants this number to anchor the conversation at the upcoming roadshows. Putting a public floor on FY2029 revenue is a different kind of signal than another contract press release, its a framework move that puts the company on a trajectory the market can value forward.

Earlier in the month FEI-Zyfer (FEIM’s subsidiary) also got around $4.75M in follow-on change orders for customized airborne PNT systems through 2027, and they’re developing a new Rubidium atomic clock for airborne use. that extends the satellite / lunar story into airborne, a much bigger end market, which supports the multi-year revenue trajectory.

Thesis status: Strengthening. The $150M floor changes how to value the next three years.

6. KPIs to Watch Next Month

• $CCLD. Q1 earnings May 14, Series B redemption May 15, Analyst Day NY May 19. three binary events in one week.

• $KLNG. Investor Day May 7-8: 2030 roadmap and explicit margin targets.

• $FTEK. Q1 results May 5: how fast is the data center APC pipeline converting after the April $10M award?

• $IFABF. Q1 2026 actual print vs. raised guidance ($25-27M revenue) and gross margin recovery.

• $BIRDF. Q1 results May 13: backlog conversion pace and double-digit revenue growth confirmation.

• $FEIM. May & June investor conferences: first chance to interrogate the $150M FY2029 revenue target and management’s confidence intervals.

• $SIF. Q2 fiscal 2026 results April 30 / early May: confirmation that the Q1 breakout wasnt a one-off.

• $TGEN. Vertiv demo project shipment by end of Q2 and any first data center PO announcement.

• $PPIH. Northeast facility operational by end of Q2; new data center contract announcements.

7. Sources

$CCLD — CareCloud

• $50M Credit Facility & Series B Redemption (April 13)

• Reaffirms Guidance Following Capital Structure Simplification (April 16)

$PPIH — Perma-Pipe International

• $54M in Q1 2026 Project Awards

$FTEK — Fuel Tech

• $10M Air Pollution Control Awards (April 28)

• Q1 2026 Earnings Call Schedule (May 5/6)

$FEIM — Frequency Electronics

• Three-Year $150M Revenue Target Announcement (April 30)

$BLM — BluMetric Environmental

• $2.9M DND ROWPU Contract Extension (April 17)

$FSI — Flexible Solutions International

• FY2025 Results & Conference Call (April 15)

$MOJO — Equator Beverage

• Q1 2026 Results (April 14)

$KTEL — KonaTel

• FY2025 Results (April 16)

$BOSC — BOS Better Online Solutions

• RFID $350K Order Extension (April 21)

$BIRDF — Bird Construction

• Q1 2026 Earnings Release Date (April 7)

$NTWK — NetSol Technologies (closed)

• Toyota Leasing Thailand WFS Upgrade (April 7)

Landmark year. Revenue $210.9M (+33%), net income $17.0M (+89%), diluted EPS $2.09 — all record highs. Growing the top line at 33% while keeping gross margins flat at ~33% on $52M of incremental revenue is the dream combo: top-line growth with operating leverage kicking in. Backlog is lighter at $121.6M vs $138.1M last year, but that’s because they converted aggressively — still nearly double from two years ago. The Ohio facility for AI data centers and the JPMorgan credit facility signal this is a company entering a new phase. Long since ~$14, up ~126%, and I think this one could still run significantly from here.

Headline Numbers

• Revenue: $210.9M (+33.1% YoY vs $158.4M)

• Q4 revenue: $55.1M (+22.4% YoY)

• Gross profit: $69.5M (33% margin — flat vs 34% prior year on $52M more revenue)

• Operating income: $29.4M (+45% YoY)

• Net income attributable to common stock: $17.0M (+88.9% vs $9.0M)

• Diluted EPS: $2.09 (vs $1.12 — +87%)

• Backlog: $121.6M (vs $138.1M prior year; vs $68.5M two years ago)

• Stockholders’ equity: $90.6M (+26% YoY)

• Total assets: $217.5M (+32%)

• Cash: $18.7M

• Operating cash flow: $9.2M (vs $13.9M — AR build)

• Capex: $10.4M (vs $2.8M — mostly Middle East)

• Shares outstanding: 8,123,273

• Share price: ~$33

• P/E: ~16x trailing (~13-14x adjusted for one-time charges)

• EV/EBITDA: ~8x (est. EBITDA ~$33-34M)

Revenue & Business Momentum

$210.9M for the full year is a massive step change. This is a company that did $158.4M last year and $150.7M the year before — the acceleration from +5% growth in FY2024 to +33% in FY2025 is the inflection point. Growth was broad-based across Middle East, North America, and Canada — not reliant on a single geography.

Q4 alone came in at $55.1M (+22.4%), which while lower growth than the 47% Q3, still represents solid execution. For context, their quarterly run rate is now north of $50M vs mid-$30s two years ago.

Management Commentary

CEO Saleh Sagr called it like it is:
“Our fiscal 2025 results represent a landmark achievement for the Company. Total revenues of $210.9 million and net income attributable to common stockholders of $17.0 million mark our highest level of earnings in the Company’s modern operating history.”

On the forward outlook: “With record earnings as our foundation and a modernized capital structure as our fuel, we enter the remainder of 2026 with strong confidence in our ability to scale our global operations and drive meaningful shareholder returns.”

What stands out to me here: they’re growing the top line aggressively AND improving operating leverage at the same time. Operating income up 45% on 33% revenue growth — that’s the perfect combo in microcap land. Revenue scaled $52M and gross margins held flat, meaning the incremental margin on that new revenue was solid. Strip out the ~$3M in one-time charges (CEO departure + SOX 404 compliance costs), and the underlying earnings power is even stronger than the headline — adjusted pre-tax income would be ~$30.5M vs reported $27.5M.

Backlog Analysis

Backlog at $121.6M is down from $138.1M at the start of the fiscal year. On the surface that looks concerning, but context matters.

Management was explicit: the decline reflects “strong operational execution and accelerated conversion” — they burned through backlog because they were delivering projects faster. When you post $210.9M in revenue off a starting backlog of $138.1M, you’re converting at an extraordinary rate. The backlog is still nearly double the $68.5M from two years ago.

The real question is whether new order intake in the first half of FY2026 can replenish it and sustain the $210M+ run rate. I think it will. The Middle East geopolitical situation with the war has likely created some hesitation on new project awards from that region. Once things settle — and they will — those orders should come back. The underlying demand drivers (district energy, infrastructure modernization, data centers) are structural, not cyclical.

At $121.6M, the backlog still covers roughly 7 months of revenue at the current run rate. That’s not thin — it’s just not as fat as it was at the peak.

Data Center Opportunity

This is what excites me most going forward. Alongside the earnings, PPIH announced a long-term lease for a new production facility in Ohio, specifically to serve AI-driven data center customers and the District Heating and Cooling sector.

This isn’t them dipping a toe — they’re committing real capital and real capacity. The Ohio location was chosen for its proximity to Northeast and New England corridors (where data center buildout is booming) and for its favorable labor environment. CEO Sagr noted: “The region’s favorable and flexible labor environment further enhances our operational agility.”

The shift to liquid cooling in data centers creates massive demand for pre-insulated piping — exactly what Perma-Pipe builds. With $52M in Q3 awards alone (including $22M in data center projects) and now dedicated manufacturing capacity coming online, this could become a significant part of the business. It’s not just an optionality story anymore — it’s converting to real revenue and real infrastructure investment. I love this theme.

JPMorgan Credit Facility — Institutional Validation

The new global credit facility with JPMorgan Chase is a big deal. CEO Sagr called it a “watershed moment” — and for a microcap, getting JPMorgan as your lender is a stamp of credibility.

The facility provides $18M in senior secured revolving credit (including $1.5M LC sublimit), maturing October 2027. More importantly, it standardizes their borrowing platform globally with significantly improved terms versus prior credit arrangements. Management described the previous credit situation as a constraint — this removes it and provides the liquidity for the next phase of global expansion.

For a company generating $29.4M in operating income, having JPMorgan backing gives them the financial flexibility to fund the Ohio facility buildout and pursue larger projects without diluting shareholders.

10-K

G&A Operating Leverage is Real. G&A went from 18% of revenue to 17% — on a 33% revenue increase. The $7.3M increase in G&A includes ~$3M of one-time items (CEO departure + SOX 404). Strip those out and underlying G&A growth was ~$4.3M on $52.5M of incremental revenue. That’s 8% SGA leverage on 33% top-line growth. Meanwhile, selling expenses actually decreased from $4.9M to $4.7M. The operating expense structure is scaling beautifully.

Cash Flow — Operating cash flow dropped to $9.2M from $13.9M despite the massive earnings growth. The culprit: working capital build, primarily accounts receivable increasing alongside the revenue ramp. For a project-based business scaling this fast, that’s normal but worth monitoring. The company is financing growth with its balance sheet, not just its P&L.

Capex Stepped Up Big. $10.4M vs $2.8M prior year — driven by Middle East capital expenditures. They’re investing into the business at the right time. Combined with the Ohio facility lease, this is a company building capacity for the next leg of growth.

International Mix Increasing. International sales were 71.7% of total (vs 66.9% prior year). The Middle East is driving the growth disproportionately, which reinforces both the opportunity and the geopolitical risk. CEO Sagr’s background as former SVP of MENA is clearly paying off here — he knows these markets.

Customer Concentration Emerging. One customer now represents 23% of AR and 12% of net sales (vs no single customer >10% prior year). Likely a large Middle East or Aramco-related project. Not alarming but worth tracking — concentrated AR in project-based businesses is common during execution phases.

NOLs — Hidden Tax Shield. The company has $16.6M in gross federal NOLs and $22.2M in gross state NOLs. Federal NOLs of $9.3M start expiring in 2036-2037, the rest carry indefinitely. State NOLs expire at various dates through 2045. This partially explains the improved effective tax rate (24.9% vs 29.1%) and could continue providing a tailwind.

JPMorgan Is a Bridge — The Real Deal Is Coming. The 10-K reveals the JPMorgan $18M facility is explicitly described as a “temporary bridge financing arrangement.” The company expects to enter into a new global credit facility with a syndicate of lenders, with JPMorgan as administrative agent and lead arranger. This means the final facility will likely be much larger than $18M. For a microcap, having JPMorgan arranging a syndicated facility is exceptional.

Global Footprint is Massive. 14 operating locations across Illinois, Louisiana, Tennessee, Texas, two Canadian facilities (Alberta + Ontario), India, UAE, Saudi Arabia (Dammam, Riyadh, Medina), Egypt, and Qatar. Plus the new Ohio facility coming online. 909 employees (222 US, 687 international). This is not a small company operationally — the market cap just hasn’t caught up.

One-Time Items to Note

FY2025 included ~$3M in one-time charges that won’t recur: roughly $2M for the prior CEO departure compensation and ~$1M for SOX 404 compliance costs (transition to accelerated filer). This means FY2026 starts from a cleaner expense baseline — reported numbers should benefit from not having these drag items.

What Improved

• Revenue inflected from +5% to +33% growth

• All-time record revenue, operating income, net income, and EPS

• Operating income +45% on 33% revenue growth — leverage materializing

• G&A as % of sales improved from 18% to 17% (ex one-time items, even better)

• Selling expenses actually decreased ($4.7M vs $4.9M)

• Data center awards and Ohio facility commitment

• JPMorgan credit facility — bridge to a larger syndicated facility

• Stockholders’ equity up 26% to $90.6M

• Effective tax rate improved to 24.9% from 29.1% (NOLs helping)

• Capex tripled to $10.4M — investing for growth at the right time

• International sales mix grew to 71.7% (MENA expansion paying off)

• No material pending litigation

What Still Needs Work

• Backlog replenishment — need to see new order intake in H1 FY2026

• Operating cash flow declined to $9.2M from $13.9M — AR build consuming cash

• Middle East geopolitical risk (Iran tensions explicitly called out in 10-K)

• Three material weaknesses still outstanding (testing scheduled for 2026)

• Ohio facility execution — new market segment, ramp risk

Investment Take

Long since ~$14, up ~126%, and this is one of those names where the thesis keeps getting better quarter after quarter. Record revenue, record earnings, operating leverage kicking in, a data center growth vector that’s actually converting to real investments, and JPMorgan backing the balance sheet. The backlog is lighter but for the right reasons — they executed and converted. Once the Middle East stabilizes, I expect the order pipeline to refill. At ~16x trailing earnings (~13-14x adjusted for one-time charges) and ~8x EBITDA, the stock is reasonably priced relative to the growth and the quality of the business today. This one could still run much more. Holding with conviction.

References

• Q4 & Fiscal Year 2025 Earnings Release (April 16, 2026)

• Form 10-K Annual Report, fiscal year ended January 31, 2026 (filed April 16, 2026)

• JPMorgan Credit Facility 8-K (April 8, 2026)

• Ohio Facility / Strategic Alternatives Announcement (March 2026)

• Q3 FY2025 $52M Awards Announcement (December 3, 2025)

Disclaimer: This is not financial advice. I’m sharing what I’m doing with my own money, for educational and entertainment purposes only. Do your own research before making any investment decision.

I’ll be honest with you.

Last year I got burned doing short-term trades in the obvious names — Tesla, Nvidia, the stocks everyone talks about. High liquidity, yes. But also maximum noise, maximum algos, maximum retail participation. Every move is crowded. You’re fighting everyone at the same time.

So I stopped. Went back to my roots — microcap and nanocap investing, the slower and more deliberate game I actually know how to play.

But lately I’ve been thinking: there is a way to do short-term trades without burning yourself. You just have to do it differently.

No options. No leverage. No TSLA or NVDA.

Just shares. In smaller, less-followed companies. Where a real catalyst meets a decent technical setup — and most people aren’t even looking.

And to be clear — these are small caps, but with a decent amount of liquidity. Not the OTC names I usually buy for long-term holds. Those are almost impossible to work with for this kind of approach. You can’t get in and out cleanly, spreads are wide, and any real size moves the stock. For short-term trades you need something you can actually exit.

That’s the filter I’m using now. Both things have to be there: a real fundamental reason and a clean technical entry. If I only have one of the two, I pass.

This week I entered 5 positions with that setup in mind. Here they are.

$JRSH — Jerash Holdings

Jerash manufactures sportswear and outerwear in Jordan for brands like The North Face, New Balance, and Skechers. Small company, ~$39M market cap, most people have never heard of it.

The story here is a real operational turnaround. In FY2024 they got crushed — raw material delays and shipping costs exploded when their main port route through Haifa got disrupted by the Israel-Gaza conflict. Margins collapsed.

Then they fixed it. They switched their logistics route from Haifa to Aqaba, cutting trucking costs from ~$3,200 per truck to ~$1,200. They signed a major new contract with Hansoll Textile, giving them access to a large U.S. retailer with $30M+ in backlog. And they completed a 15% capacity expansion with factories fully booked.

Last quarter: revenue +18% YoY. Gross profit up significantly. Operating income up +174%.

The stock hasn’t really moved yet. That’s the setup.

Entry: $3.10

$KNOP — KNOT Offshore Partners

KNOT operates shuttle tankers — specialized vessels that transport crude oil from offshore platforms to onshore terminals — under long-term charters in Brazil and the North Sea. Boring business. Predictable cash flows. Not the kind of company that shows up on anyone’s trending list.

In March, buyout talks with their sponsor collapsed. The stock sold off hard — RSI hit 23, deep oversold territory. Shortly after, B. Riley upgraded the stock to Buy.

The setup: oversold, real cash flows, and the bad news (failed buyout) is already priced in. Sometimes the best short-term trade is just a beaten-down stock with no new reasons to keep falling.

Entry: $10.00

$LXFR — Luxfer Holdings

Luxfer makes specialty industrial materials — magnesium powders used in military countermeasure flares, high-pressure cylinders for firefighters and healthcare, zirconium-based materials for aerospace and defense. Niche, technical, unglamorous.

Their Elektron segment (defense and aerospace) grew 11.6% last year with 18.8% EBITDA margins. Adjusted EPS up 12% YoY. Management specifically called out a “new multiyear SCBA replacement cycle” and continued strength in defense demand as tailwinds going into 2026.

The short-term catalyst: Q1 2026 earnings drop in approximately 5 days. If the defense demand thesis holds, the market reacts. Binary setup — I’m sized accordingly.

Entry: $13.18

$TV — Grupo Televisa

Yes, Televisa. The Mexican media and telecom company. I know the stock has been a disaster for years. But sometimes the setup is the setup.

Technically: trading above its 200-day MA, short-term MAs all pointing up as of last week. The stock just bounced off support.

The fundamental angle that I find interesting: the 2026 FIFA World Cup is played in North America — Mexico, USA, Canada. Televisa owns the broadcast rights in Mexico, and ViX (their streaming platform, which is already profitable) will stream all 104 games exclusively in Mexico. That’s a real advertising and subscriber catalyst coming in the next 60 days.

Earnings are April 29. The setup window is now.

Entry: $2.98

$VEON — VEON Ltd

This is the highest-risk position of the five, and I want to be upfront about that.

VEON is a telecom operator in Pakistan, Ukraine, Kazakhstan, Uzbekistan, and Bangladesh. Yes, that’s an uncomfortable list of countries. The geopolitical risk is real.

But the valuation is hard to ignore: P/E of ~6.6x vs. a sector average of ~17x. They fully exited Russia in 2023. They listed their Ukraine subsidiary Kyivstar on Nasdaq — that stake alone is worth ~$2B, while VEON’s entire market cap is ~$3.2B. They’re running a $100M annual buyback program. Revenue guidance for 2026: +9-12% in USD terms.

Technically oversold. Three analysts with Strong Buy ratings and an average target of $80.

I entered knowing this one could hurt. But the disconnect between price and fundamentals is hard to look away from.

Entry: $51.00

The common thread

None of these are Tesla. None of them are on CNBC every day. That’s kind of the point.

I’m not trying to predict macro. I’m not trying to time the market. I’m just looking for situations where something real is happening — operationally, technically, or both — in companies small enough that most people aren’t paying attention.

I’ll update you on how these play out.

Not financial advice. I’m just sharing my process. Always do your own research.

Monthly Portfolio Update

March 2026 · Published March 31, 2026 · by Rodrigo Lezama

Not financial advice. This is for accountability and to keep my thinking clean.

1. Current Holdings

Portfolio as of end of March 2026 (17 positions):

$BLM — BluMetric Environmental — $7.5M military contract, Florida wastewater win

$BIRDF — Bird Construction — Record $11B backlog, Alberta schools DBFM

$KLNG — KOIL Energy Solutions — Record Q4 revenue, West Africa expansion

$OPXS — Optex Systems — Laser filter orders building, IDIQ cadence $ACFN — Acorn Energy / OmniMetrix — Monitoring +22% YoY, AIO partnership loading

$IFABF — iFabric Corp — Record FY2025, Q1 2026 guidance raised to $25–27M

$KEQU — Kewaunee Scientific — Q3 soft but pre-tax earnings +26%, India strong

$PPIH— Perma-Pipe International — Northeast facility for data centers, strategic review closed

$FTEK — Fuel Tech — FUEL CHEM best year since 2018, $75–100M APC pipeline

$TGEN — Tecogen — Vertiv demo shipping Q2, insider buying, prove-it phase $NTWK — NetSol Technologies — $10M+ China Transcend go-live

$TTZ.V — Total Telcom — Site-TraX military product launch

$MOJO — Equator Beverage — First profitable year, 4 consecutive quarters >$1M

$SIF— SIFCO Industries — Backlog $139.5M, breakout quarter confirmed

$KTEL — KonaTel — Waiting for healthcare partnership ramp

$PXHI — PhoneX Holdings — Waiting for strategic transaction clarity

$FSI — Flexible Solutions — Panama facility live, waiting for margin confirmation

Watchlist — Previously Owned, Looking to Re-enter

I’ve owned all five of these in the past. I exited for various reasons but continue tracking them closely because the theses are still alive. Each one has a specific trigger that would get me back in.

$FEIM — Frequency Electronics — Record backlog, $45M satellite contracts, lunar PNT entry

$BOSC — BOS Better Online Solutions — Record year, $51M revenue, defense compounder

$VELO — Velo3D — $9.8M DoW contract, CEO debt conversion, balance sheet rebuilt

$BOF — BranchOut Food — Record revenue, Zesty Snackz partnership, ROTH

$ATGN — Altigen Technologies — Tollring partnership for Teams compliance recording

2. Month in Review

March was an absolute firehose. More than half the names I track — portfolio and watchlist combined — reported earnings or dropped material news in the same 30-day window, and the overall picture is encouraging: backlogs are at record levels across defense names, contract momentum is accelerating, and several companies are now entering execution phases that will define whether thesis upgrades translate into real earnings.

The defense cluster had an exceptional month. FEIM (watchlist) announced $45M in satellite contracts and a $7M lunar PNT award. BLM landed a $7.5M shipboard military contract. BOSC (watchlist) delivered a record year with 27% revenue growth. OPXS continued its steady IDIQ delivery order cadence. VELO (watchlist) secured a $9.8M DoW JAMA contract, adding to over $50M in defense awards in the past year. This isn’t a coincidence — it’s a structural cycle in defense procurement and reshoring that’s hitting across multiple names simultaneously.

On the other side, margin compression remains the recurring theme that separates good revenue stories from great investment outcomes. KLNG, BLM, IFABF, and BOF (watchlist) are all growing revenue meaningfully but haven’t yet proven they can translate top-line momentum into earnings. The next two quarters will be decisive for several of these positions. I’m patient but watching closely.

3. Portfolio Changes

No positions were opened or closed in March. The month was about absorbing information, not making moves.

Five names — FEIM, BOSC, VELO, BOF, and ATGN — are currently on my watchlist. I’ve owned all of them in the past and continue tracking them actively because the core theses haven’t broken. Each one has a re-entry trigger I’m waiting on, and I cover them in the Watchlist section below alongside the portfolio holdings.

4. Company Updates & News

$BLM — BluMetric Environmental

Two contract wins this month: a US$1.5M (C$2M) Florida wastewater MBR system (March 9) and a C$7.5M shipboard military SROD contract (March 24).

The Florida win continues the pattern of repeatable MBR sales through WaterTech USA — this is a product-like business, not project-based consulting, and the Gainesville facility expansion (potentially doubling to 50K sq ft at zero capex) signals real demand. The $7.5M military contract is more significant: it fills the revenue pipeline as Rheinmetall deliveries wind down, and the shipbuilder has customers globally for the same vessel type, creating a large follow-on opportunity.

The margin problem is becoming clearer to me. Professional Services has too many project managers relative to the revenue base, and there hasn’t been enough financial incentive at the GM level to push margins higher. Management seems to agree — they replaced the division head with Jody Johnson, implemented a bonus program that only pays above 55% gross margin, and are reviewing the PM roster. The CFO and a board member bought shares in the open market this month, which tells me insiders see the same setup I do. The path to 10% EBITDA margin is clearer than it was 90 days ago.

Thesis status: Intact. Margin execution is the gating factor, but management is finally addressing it directly.

$BIRDF — Bird Construction

Q4 and FY2025 results landed March 11 alongside financial close on a C$323M Alberta schools DBFM contract.

The headline: combined backlog hit approximately C$11 billion, up 45% YoY. That is a staggering number for a company with roughly C$3.4B in annual revenue. Contracted backlog of C$5.1B plus C$6.0B pending (including C$1.5B+ in recurring MSA contracts). Revenue was roughly flat as project timing delays pushed work into 2026, and there was a C$62.2M one-time impairment charge that created a GAAP net loss — but adjusted earnings came in at C$0.57/share, and adjusted EBITDA was C$222M. Gross margins actually improved to 11.1%.

2027 targets reaffirmed: C$4.6–5.1B revenue with approximately 8% adjusted EBITDA margin. The company expects double-digit revenue growth starting Q2 2026 as the backlog converts. At C$28, Bird still trades at a meaningful discount to Canadian construction peers on EV/EBITDA.

Thesis status: Strong. Backlog quality and margin trajectory both improving.

$KLNG — KOIL Energy Solutions

Record Q4 revenue of $7.3M (+22% YoY) and EBITDA turning positive at 10% margin. The company also won a significant West Africa subsea umbilical installation contract (March 11), its first publicly disclosed international contract outside the Gulf of Mexico and Brazil.

But the margin compression debate is real. Q4 gross margin was 35% vs. 40% a year ago. Full-year EBITDA dropped from $3.5M to $1M despite 6% revenue growth. Management says this is deliberate — they’re investing in rental equipment, Brazil operations, international sales development, and IP — but the numbers don’t lie: revenue grew and margins shrank. The question is whether this is a land-grab phase or structural pricing pressure.

May 7–8 Investor Day in Houston (at OTC) will be critical — management will present a 2030 strategic roadmap. That’s the event that will clarify whether the investment phase has a credible payoff timeline.

Thesis status: Intact but needs margin proof. Investor Day is the next catalyst.

$IFABF — iFabric Corp

Record FY2025: revenue $32.9M (+20%), driven by the Intelligent Fabrics Division (+33%). Then the bombshell: Q1 2026 guidance raised to $25–27M — a single quarter that could exceed all of FY2024 revenue and represents roughly 266% YoY growth.

The catch is margins. Full year gross margin compressed to approximately 32% from 41%, primarily from tariffs on China-sourced goods and product mix shift toward lower-margin scrubs programs. Q4 gross margin was roughly 26%. Management says this is temporary and expects improvement as the supply base diversifies and higher-volume programs achieve better unit economics. Cash burned $4.4M from operations in 2025 (vs. positive $300K in 2024) as working capital ramped for Q1 2026. Debt increased approximately $9.5M.

The Maidenform license exit is complete and all major customers have confirmed the switch to owned branding (Coconut Grove Intimates / Verzus All Apparel). If Q1 comes in at $26M and subsequent quarters hold even a fraction of that pace, FY2026 could reach $70–80M. But margin recovery has to come with it or the growth story is hollow.

Thesis status: Intact. Revenue trajectory is exceptional. Margins are the key risk.

$OPXS — Optex Systems

A $1.23M laser protection filter order (March 27) for Night Vision Goggle programs — a delivery order release against a five-year IDIQ contract. Combined with the $2.19M NVG order from February, that’s $3.42M in NVG-related orders in six weeks. Backlog is now above $36.8M.

This isn’t a step-change catalyst, but the IDIQ delivery order cadence is exactly what you want to see: consistent, repeat releases driven by quality performance. The stock remains range-bound near $13.30 as the market waits for margin recovery and CEO transition clarity.

Thesis status: Intact. Building blocks accumulating. Margin recovery is the unlock.

$ACFN — Acorn Energy

Q4 and FY2025 earnings (March 5): full year revenue $11.48M (+4.5%), monitoring revenue $5.6M (+22%), gross margin expanded to 76.8% (+400bps), and operating cash flow hit $2.09M (+131%). First demo unit with a large telecom client for the AIO partnership expected by end of March, with revenue contribution starting H2 2026. Average AIO sale is 5–6x current Omni sale — that’s significant scale-up potential.

The quarter was weak on headline revenue ($2.4M vs. $3.5M prior year) due to the expected hardware revenue roll-off from a large telecom contract. This is noise, not signal. Core monitoring business is executing well and AIO adds real optionality.

Thesis status: Supports. Monitoring growth and AIO pipeline are the story.

$KEQU — Kewaunee Scientific

Q3 FY2026 (quarter ended January 31): revenue $69.4M (+3.3%), but the headline EPS decline from $0.45 to $0.23 massively overstates the underlying deterioration. Pre-tax earnings actually improved 25.8% — the EPS drop was driven by a tax swing ($636K unfavorable) and larger NCI allocation. International revenue grew 21.4% with India leading. Domestic was soft due to seasonal construction slowdown plus macro uncertainty.

Backlog at $183M (down from $222M YoY) reflects post-COVID surge normalization, not demand deterioration. Balance sheet is deleveraging rapidly: long-term debt net of sale-leaseback cut nearly in half to $16.3M. Management is explicitly building infrastructure for serial M&A — the next acquisition feels imminent.

Thesis status: Intact. Q3 was seasonal noise. India and M&A are the catalysts.

$PPIH — Perma-Pipe International

Three announcements packed into one press release (March 19): a new U.S. Northeast manufacturing facility targeting AI data center cooling (operational Q2 2026), confirmation that Middle East operations remain fully functional, and the conclusion of the strategic alternatives review with the board deciding to continue as an independent company.

The strategic review closing without a transaction is a mild negative — no premium bid materialized. But the data center pivot is the forward narrative. AI compute generates extreme heat per rack, and pre-insulated piping for district cooling is PPIH’s core competency. The Northeast is a major data center corridor. If data center demand is real, the addressable market dwarfs PPIH’s current revenue.

Thesis status: Intact. Data center opportunity is the new catalyst. Execution TBD.

$FTEK — Fuel Tech

Q4 and FY2025 results (March 3): record FUEL CHEM year (best since 2018, +27.9%), Q4 revenue up 37% YoY, full year gross margin improved to 46.4%. Operating cash flow swung to positive $3.0M from negative $3.4M. Balance sheet remains fortress-like: approximately $32M in cash and investments, zero debt.

The data center thesis is building: management cited a $75–100M pipeline of SCR opportunities tied to data center power generation. APC awards of $8.8M in 2025 and backlog growing to $7.0M. A new commercially-priced FUEL CHEM demo program could add $2.5–3.0M in annual revenue if it converts.

Thesis status: Intact. Data center APC pipeline is the catalyst. Conversion is the watch item.

$TGEN — Tecogen

Q4/FY2025 (March 17): revenue $27.07M (+19.7%), but net loss widened to $8.25M as the company invested heavily in data center chiller R&D, manufacturing expansion, and the Vertiv partnership. Gross margin compressed to 36.3% from 43.6%.

The Vertiv demo project is expected to ship by end of Q2 2026 — and I think that’s the event that unlocks real demand. Right now, prospective customers want to see the technology running in a live data center before they commit. Once that demo is operating, the friction drops significantly. Vertiv has designed 25–50 MW of Tecogen chillers into projects. When I run the math — 100 units/year at $300–400K each — that’s $30–40M in potential annual data center revenue, roughly doubling the company. Three insiders bought shares post-earnings (CEO, General Counsel, CAO). Cash is $12.43M with burns ongoing.

Thesis status: Prove-it story. Vertiv demo and first data center order are the binary catalysts.

$NTWK — NetSol Technologies

A tier-one U.S. auto captive finance company went live on NetSol’s Transcend Finance platform in China under a contract valued at over $10M (March 11). This represents roughly 14% of annual revenue in a single deal and validates Transcend as production-grade enterprise software for major OEM captives. Next phases of rollout are being planned with the same client.

Thesis status: Intact. SaaS transition and China execution progressing.

$TTZ.V — Total Telcom

Site-TraX military/security platform launch (March 31). The existing Water-TraX hardware has been upgraded with magnetic field detection, RFID integration, 30% improved battery capacity, and enhanced weather protection — extending the product into border security, perimeter monitoring, and work-alone safety under new “Site-TraX” branding. Distribution through existing and new partners in North and South America.

This is a low-cost market extension (same core hardware, software/sensor reconfiguration) into a higher-value vertical. The 2023 U.S. Armed Forces order validated the platform for military use; Site-TraX formalizes the product positioning.

Thesis status: Intact. Site-TraX adds defense optionality at minimal cost.

$MOJO — Equator Beverage

First profitable year: FY2025 revenue $4.19M (+29%), gross margin 45%, net income $49K (vs. net loss of $801K prior year), positive operating cash flow of $212K. Four consecutive quarters above $1M in revenue — a first for the company.

Minor yellow flag: net income was restated from $137K (preliminary) to $49K (audited) with no explanation provided. This is a governance transparency issue worth monitoring at a company this small. The thesis remains a slow-compounding per-share value story — get to break-even, maintain it, then land a major distribution deal that re-rates the stock.

Thesis status: Improving. Profitability milestone hit. Distribution deal is the next catalyst.

Watchlist Updates

Previously owned. Tracking actively for re-entry.

$FEIM — Frequency Electronics

The biggest month in FEIM’s recent history. Three events in rapid succession: Q3 FY2026 earnings (March 11), $45M in satellite contract awards (same day), and a $7M lunar PNT atomic clock contract (March 25).

Earnings were mixed on the surface — revenue at $16.9M missed estimates, and EPS of $0.16 vs. $1.60 prior year looks ugly. But the prior year was inflated by one-time items and the underlying trajectory is strong. Funded backlog hit $83M, an all-time record, and that was before the $45M in new awards entered the backlog. Management reiterated they’re on track to surpass $100M in funded backlog.

The $45M contracts span both traditional satellite and proliferated satellite programs — the latter being FEIM’s first significant LEO constellation win. This validates that FEIM isn’t being disrupted by the new satellite paradigm but is participating in it. The $7M lunar PNT contract is small in dollar terms but strategically huge: it puts FEIM in the supply chain for lunar infrastructure before the market scales. Total contract velocity in FY2026: roughly $73M in new awards in 10 months against a $83M backlog. The stock sold off 14% on earnings day (market focused on the miss) then bounced 12% on the lunar announcement. Classic microcap inefficiency.

Thesis status: Strengthening. Backlog inflection confirmed. Revenue conversion is the next watch.

$BOSC — BOS Better Online Solutions

Record everything in 2025: revenue $51M (+27%), net income $3.6M (+57%), EPS compounding at roughly 60% annually over four years, and cash hitting $11.8M. Supply Chain division grew 40%, Intelligent Robotics turned profitable, and even RFID showed life in Q4 with revenue up 27% YoY.

The stock fell 6.6% on the results because 2026 guidance came in flat at approximately $51M revenue and $3.6M net income. But I’ve seen this movie before — 2025 started with $44M guidance and finished above $50M after three raises. When I dug into the earnings call, the CFO walked through a specific FX headwinds bridge: roughly $600K shekel strength drag, $800K of non-recurring FX income that won’t repeat, and $1.2M from the goodwill impairment that doesn’t recur. To me, that means “flat” guidance actually requires underlying operational growth just to hold serve. The headline number understates the real business trajectory.

India expansion is progressing — a $2.2M order from an existing Indian customer plus a new India representative appointed in March — but this is a 2–3 year build, not a near-term catalyst. At 5.6x EV/EBITDA with a net cash position of approximately $10M and a CEO who has a clear pattern of guiding conservatively then raising, the setup remains attractive.

Thesis status: Strong. Defense compounder at value multiples. Guidance likely conservative.

$VELO — Velo3D

The most news-dense month in VELO’s history: GE Aerospace/Intergalactic RPS case study (March 9), CEO debt-to-equity conversion at $16.38/share (March 11), Q4/FY2025 earnings and new CFO appointment (March 24), and a $9.8M DoW DLA/JAMA IDIQ contract (March 30).

FY2025 revenue was $46M (+12%), but gross margin was negative 16.1% due to a $7M Q4 inventory write-down, and net loss was $71.4M. The balance sheet was completely rebuilt: cash from $1.2M to $39M, debt reduced approximately 60% via the CEO’s conversion. 2026 guidance: $60–70M revenue, EBITDA positive H2 2026 (pushed back from H1), $40–50M in capex.

The defense pipeline is now substantial: Project FORGE ($32.6M) + defense prime RPS ($11.5M) + JAMA IDIQ ($9.8M) = roughly $54M in defense awards against $46M in total 2025 revenue. Record Q4 bookings and $31M backlog entering 2026. The CEO converting debt at a $6+ premium to market is a strong conviction signal.

The bear case is real: shares nearly doubled (13M to 24.6M), gross margins have never been positive, EBITDA profitability has been pushed back, and additional capital raises are expected. This is still a show-me story, but the direction of travel is clearly improving.

Thesis status: Improving. Balance sheet is no longer the risk. Execution on gross margin is.

$BOF — BranchOut Food

Zesty Snackz partnership announced March 11 — a YouTube creator-backed snack brand using BranchOut’s GentleDry technology for fruit chips. First container ships April 2026. The company presented at the 38th Annual Roth Conference (March 23–24) with 1-on-1 institutional meetings. Q4/FY2025 earnings call scheduled for March 31 at 4:30 PM ET.

Pre-announced FY2025 revenue of approximately $14M (+113%) and a record Q4 of $4.2M. The 4th REV production line came online by March 1. The earnings call today is the most important event for BOF this quarter — gross margin data from Q4 will tell us whether Peru is delivering on the margin improvement thesis. The Zesty Snackz deal is small but strategically meaningful as it validates GentleDry as a platform technology for third-party brands.

Thesis status: Show-me. Gross margin on tonight’s call is the single most important data point.

$ATGN — Altigen Technologies

Announced a strategic partnership with Tollring (March 31) to distribute compliance call recording and AI-driven analytics for Microsoft Teams in North America. Altigen becomes a distributor for Tollring’s Analytics 365 product, targeting Operator Connect and Direct Routing providers. The solution adds AI sentiment analysis and business intelligence dashboards to Teams voice interactions. Relevant for financial services, healthcare, and public sector customers.

Thesis status: Watching. Partnership adds product depth but turnaround still needs traction.

No Material News This Month

$SIF — SIFCO Industries. Backlog at $139.5M per most recent filing. Holding and watching for next quarter’s margin data.

$KTEL — KonaTel. Waiting for healthcare Lifeline partnership ramp. No news.

$PXHI — PhoneX Holdings. Waiting for strategic transaction or warehouse platform clarity. No news.

$FSI — Flexible Solutions International. Panama facility confirmed live in January 2026. Waiting for margin and cash flow data from the next earnings cycle.

5. KPIs to Watch Next Month

Portfolio:

• $BLM — Q2 FY2026 results: full DS Consultants contribution, Professional Services margin progress

• $KLNG — May 7–8 Investor Day: 2030 roadmap credibility and margin targets

• $IFABF — Q1 2026 revenue delivery ($25–27M guided) and gross margin recovery trajectory

• $TGEN — Vertiv demo project shipment by end of Q2

• $FTEK — APC pipeline conversion: first data center SCR contract announcement

• $ACFN — AIO demo unit deployment and initial customer feedback

Watchlist:

• $FEIM — Backlog crossing $100M as $45M + $7M contracts enter funded status

• $BOSC — Q1 2026 order intake and first guidance raise timing

• $VELO — Q1 2026 gross margin trajectory and cash burn rate

• $BOF — Q4/FY2025 gross margin (tonight’s call) and Q1 2026 Peru facility margin data

6. Sources

$FEIM — Frequency Electronics

• Q3 FY2026 Earnings Press Release (March 11)

• $45M Satellite Contract Awards (March 11)

• $7M Lunar PNT Contract (March 25)

$BLM — BluMetric Environmental

• $2M Florida Wastewater Contract (March 9)

• $7.5M Shipboard Military Contract (March 24)

$BIRDF — Bird Construction

• Q4/FY2025 Earnings Press Release (March 11)

• Alberta Schools DBFM Financial Close (March 2)

$BOSC — BOS Better Online Solutions

• Q4/FY2025 Earnings Press Release (March 31)

• Q4 2025 Earnings Call Transcript

$KLNG — KOIL Energy Solutions

• Q4/FY2025 Earnings Press Release (March 31)

• West Africa Subsea Contract (March 11)

• Q4 2025 Earnings Call Transcript

$IFABF — iFabric Corp

• FY2025 Results + Q1 2026 Guidance Raised (March 31)

$OPXS — Optex Systems

• $1.23M Laser Filter Order (March 27)

$ACFN — Acorn Energy / OmniMetrix

• Q4/FY2025 Earnings Press Release (March 5)

• Q4 2025 Earnings Call Highlights

$VELO — Velo3D

• Q4/FY2025 Earnings + 400-System Plan (March 24)

• CEO Debt-to-Equity Conversion (March 11)

• $9.8M DoW JAMA IDIQ Contract (March 30)

$KEQU — Kewaunee Scientific

• Q3 FY2026 Earnings Press Release (March 11)

$PPIH — Perma-Pipe International

• Northeast Facility + Strategic Review Conclusion (March 19)

$FTEK — Fuel Tech

• Q4/FY2025 Earnings Press Release (March 3)

• Q4 2025 Earnings Call Transcript

$TGEN — Tecogen

• Q4/FY2025 Earnings Press Release (March 17)

• Q4 2025 Earnings Call Transcript

$NTWK — NetSol Technologies

• Transcend Finance China Go-Live PR (March 11)

$TTZ.V — Total Telcom

• Site-TraX Military & Security Platform Upgrade (March 31)

$BOF — BranchOut Food

• Zesty Snackz Partnership PR (March 11)

• ROTH Conference Presentation PR (March 16)

• Q4/FY2025 Earnings Call Announcement (March 27)

$MOJO — Equator Beverage

• FY2025 Results Press Release (March 23)

$ATGN — Altigen Technologies

• Tollring Strategic Partnership PR (March 31)

If you don’t feel like reading 3,000 words and just want to understand the thesis in 10 minutes, here’s a video from Cameron at

Nobody explains things as simply and clearly as he does!

Then come back and read the deep dive if you want the full breakdown.

Quick Note Before We Start

On a technical basis, the chart is starting to look constructive as well.

Price is holding above key moving averages, momentum indicators are curling up, and the stock has been building a base in the C$1.30–1.45 range for several months. Volume has stabilized, and we’re starting to see higher lows develop. For me personally, this looks like a reasonable entry area from a risk/reward perspective.

I don’t rely purely on technicals — but when the fundamentals and structure are aligning and the chart isn’t fighting you, that combination matters.

BluMetric has been around for over 50 years, does real engineering work, and isn’t trying to sell a story — it’s trying to build an enterprise. What I like most is the niche it occupies: water infrastructure and defense logistics. Those aren’t fads. They’re structural needs. The company is evolving from a steady environmental consultant into a scaled WaterTech and military supplier, and that shift creates real operating leverage if execution improves. Once utilization normalizes and project mix stabilizes, the margin profile can look very different than what FY2025 showed.

Management also gives me comfort. On the Q3 call, Scott MacFabe defended holding the team through a weak utilization quarter, saying the “secret sauce” is their people — not short-term optics. That’s a builder mindset. The balance sheet ended FY2025 in net cash. Yes, they raised equity, but it was to fund real acquisitions like Gemini and DS Consultants — not to plug holes. The projects are lumpy, margins got messy during the scale-up, and integration risk is real. But for a microcap, this feels like a high-quality platform in transition rather than a promotional story trying to reinvent itself.

Company Snapshot

Name: BluMetric Environmental Inc.
Ticker: TSXV: BLM | OTCQX: BLMWF
Price / Market Cap: Around ~C$75M market cap range recently
FY2025 Revenue: C$62.6M
FY2025 Gross Margin: 29%
FY2025 Adjusted EBITDA: C$2.38M
Net cash (FY2025): C$2.1M

Summary of the Company :
BluMetric started decades ago as a classic environmental and engineering services firm — the kind that helps governments, industrial clients, and developers deal with environmental compliance, remediation, geotechnical work, hydrogeology, and all the unglamorous but essential “make the project legal and safe” stuff.

For a long time, that business was steady… and frankly, that’s why the stock was easy to ignore.

The story changes when you realize BluMetric didn’t stop at consulting. It gradually built real WaterTech capability: designing and fabricating water and wastewater treatment systems, then pushing into modular, deployable solutions that can serve remote mining sites, island communities, and military forces.

On the Q3 FY2025 call, MacFabe lays out the identity very cleanly: BluMetric is a “full-service water technology and environmental engineering firm” that “design[s], fabricate[s], and deliver[s] sustainable solutions.”
That matters, because it tells you this isn’t a reseller. They build systems. And building systems is where scale can show up later.

Section 1: Thesis Synthesis

BluMetric is transforming from a stable Canadian environmental consultant into a scalable WaterTech + defense platform, and the market is still figuring out what that really means.

FY2025 was the “proof the scale is real” year: audited revenue hit C$62.6M, up from C$34.8M the year before. (BluMetric)
That’s not a small improvement — it’s a step change.

But the deeper point is why it happened. Two drivers show up repeatedly in management’s own words:

1. Gemini Water (WaterTech USA)
   On the Q3 call, MacFabe says revenue growth is being driven “primarily” by Gemini and emphasizes that the acquired business is growing organically after the deal.
   Dan Hilton adds useful context: they bought Gemini at ~US$7M trailing revenue and grew it to a run-rate that’s “more than doubled” when annualized — and that required investments in space and hires.

2. Defense / Mission Ready Water
   BluMetric’s partnership with Rheinmetall Canada (CAF program) has been a multi-year platform contract. It started as an $11.7M, 3-year award back in 2023. (BluMetric)
   By FY2025, they were shipping units; MacFabe calls out shipping their “first ASUWPS units” in the FY2025 annual results release. (BluMetric)
   And the Q3 call makes it tangible: military revenue was up sharply as production began.

Section 2: Potential Inflection Point

BluMetric is near a true inflection point — not just “growth,” but a shift into being a multi-division platform with repeatable manufacturing and a growing base of recurring services.
One of the best lines in the Q3 call is when MacFabe describes how they think about product development: they don’t frame it as a traditional R&D budget; they frame it as a client-driven iteration loop — “a flywheel with our clients” where they solve real problems and spin that into new products.
That’s exactly how you build niche dominance in industrial tech: solve a painful problem for a demanding customer, then reuse the solution elsewhere.

The Thales contract is a perfect example. BluMetric created a “bolt-on” shipboard solution aimed at water quality and infrastructure lifespan, and MacFabe says they’re proud to launch it with Thales for the Royal Canadian Navy. (BluMetric)
Then Dan adds the kicker: BluMetric keeps the IP and sees this as potentially applicable beyond navy ships into broader commercial shipping over time.

The other inflection lever is recurring revenue. BluMetric is openly trying to build an O&M base, and FY2025 results point to that strategy becoming real: they later secured an O&M contract tied to their St. Kitts project and explicitly describe it as building a more recurring base. (BluMetric)

FY2025 was the scale year. FY2026 becomes the execution + integration year: management explicitly flags FY2026 as a period of execution and integration of DS Consultants. (BluMetric)

Section 3: Organizational Properties

Management Traits (alignment, LT focus, capital allocation)

The vibe you get from management is “operators building an enterprise,” not “marketers building a stock chart.” (the chart looks pretty nice though)

The clearest proof is how Scott talks about people and utilization. When professional services slowed due to delayed awards, they kept the team intact — and he defends that decision as long-term thinking, saying bluntly that cutting heads might help near-term numbers but damages long-term execution and reputation.

That’s not a guarantee of success. But it’s the kind of decision that separates builders from short-term financial engineers.

Operational Traits (customer focus, iteration)

The Thales product story is the cleanest example: customer problem → quick engineering → immediate contract deployment → potential broader market later.
And the defense work itself requires operational credibility. The ASUWPS program went through testing and field validation before moving into production. (SEDAR+)

Structural Traits (how the business is built)

BluMetric is becoming a “two-engine” machine:

• Professional services: steadier, utilization-driven profitability

• WaterTech: project-driven growth, but scalable manufacturing + future O&M

That mix is important because it gives BluMetric different ways to win in different macro regimes. And it’s why the company can absorb a weak quarter in one segment while another segment is surging.

Section 4: Financials

Financial overview:
BluMetric is financially stable, but FY2025 is a reminder that scaling hardware and projects is not a straight line.

Revenue in FY2025 was C$62.6M (up ~80% YoY). (BluMetric)
But gross margin fell to 29% (from 40%), and the company posted a net loss of C$2.3M. (BluMetric)
Adjusted EBITDA improved to C$2.38M. (BluMetric)

Revenue:
Management ties the FY2025 growth mainly to full consolidation and organic growth of Gemini, plus military deliveries. (BluMetric)

Margins (why they changed):
This is the key nuance: FY2025 margin compression wasn’t “the business broke,” it was largely mix + project reality. The FY2025 release explains gross profit was hit by costs absorbed on the St. Kitts Bird Rock SWRO project to strengthen a long-term strategic client relationship. (BluMetric)
You can disagree with that choice, but it’s a very “builder” decision: take pain now to keep a major relationship and keep the pipeline alive.

The Q3 call also explains margin mechanics clearly: WaterTech grew faster than professional services, so mix shifted, pulling gross margin down even when the company is growing.

Cash flow / sustainability:
They finished FY2025 with net cash of ~C$2.1M and improved working capital. (BluMetric)
So this isn’t a levered roll-up that must raise money to survive. It’s choosing to raise money to scale.

Balance sheet and capital structure:
On FY2025 results, the company explicitly notes that after year-end it closed the DS Consultants acquisition and completed a C$15M brokered offering. (BluMetric)
DS itself is a meaningful addition (Ontario footprint + 155 employees) and brings the total organization to ~370 employees, per the FY2025 release. (BluMetric)

Section 5: Valuation

BluMetric is genuinely difficult to value right now.

FY2025 earnings are distorted by project mix, cost absorption, acquisition integration, and a higher share count following equity raises. This is not a clean trailing-multiple story.

So instead of pretending precision, I prefer to frame valuation around what is likely to happen over the next 2–3 years.

We focus on where revenue and margins can realistically land once the integration dust settles.

Scenario A: Execution Works (Platform Margin Normalizes)

Management has openly discussed an aspiration of roughly 10% EBITDA margins at around C$100M in revenue. They’ve also been realistic — that’s not a next-quarter outcome, it’s a scale outcome.

Let’s assume:

• Revenue ~C$100M

• EBITDA margin ~10%

• EBITDA ≈ C$10M

If we apply a reasonable 12x EV/EBITDA multiple — not aggressive for a scaled environmental and WaterTech platform — that implies:

Enterprise Value ≈ C$120M

Adjusting for modest net cash and current share count, that supports something close to:

~C$3.00 per share

It assumes:

• DS integration works

• WaterTech execution stabilizes

• Utilization remains strong

• O&M revenue continues to build

Scenario B: Growth Continues, Margins Stay Mediocre

Let’s assume revenue grows into the C$80–90M range, but margins stabilize closer to 7–8% rather than 10%.

That produces:

• EBITDA ≈ C$6–7M

• Apply a 10–12x multiple → EV ≈ C$70–85M

That supports something in the range of:

C$2.00–2.40 per share

This is the “good but not great” outcome.

Revenue grows.
The business improves.
But operating leverage never fully kicks in.

Scenario C: Execution Hiccups + Multiple Compression

Now assume:

• Revenue stalls near C$70–80M

• EBITDA margins remain ~5–6%

• EBITDA ≈ C$4–5M

• Market assigns a lower 8–9x multiple due to uncertainty

That implies EV ≈ C$35–45M.

Which supports roughly:

C$1.20–1.50 per share

That’s not far from where the stock has traded recently.

This is the inherent risk in transition stories:
If margin normalization doesn’t materialize, the multiple compresses before earnings expand.

Section 6: Conclusion

Investment takeaway:
BluMetric is no longer a sleepy environmental consultant. It’s building a real platform at the intersection of water scarcity, defense logistics, and environmental infrastructure — and FY2025 proved the scale step-up is already happening.

MacFabe’s FY2025 quote is the clean headline: “Fiscal 2025 was a transformative year,” and he ties that directly to Gemini scaling and first ASUWPS shipments. (BluMetric)
That’s the story: platform building, not incremental progress.

Risks (what breaks the thesis):
Execution risk on large WaterTech projects, margin volatility, and integration risk (Gemini + DS). Defense cycles can also be slow and political. And professional services utilization still matters more than people think — management basically says so on the call.

Tracking / positioning:
This is the kind of company I’d treat like a “prove-it transition”: either take a small starter position, or track closely until you see margin stabilization and smoother project execution. The next few quarters matter a lot because they’ll show whether FY2025 was a one-time messy scale year, or the beginning of a cleaner operating leverage phase.

Sources / References (primary links first)

Earnings transcripts / calls

• Q3 FY2025 conference call transcript (PDF):
  https://www.blumetric.ca/wp-content/uploads/2025/09/BluMetric-Q3-2025-Conference-Call-Transcript-08.28.25.pdf

• Q4 + FY2025 conference call transcript (PDF):
  https://www.blumetric.ca/wp-content/uploads/2026/01/BluMetric-Q4-2025-Conference-Call-Transcript-01.28.26.pdf (BluMetric)

Financial reports / releases

• FY2025 audited results (Jan 27, 2026):
  https://www.blumetric.ca/news/blumetric-announces-fiscal-year-2025-financial-results/ (BluMetric)

• Q3 FY2025 results (Newsfile mirror):
  https://www.newsfilecorp.com/company/2051/BluMetric-Environmental-Inc. (TMX Newsfile)

Contract wins / milestones

• Thales Canada Royal Canadian Navy contract (C$3.8M):
  https://www.blumetric.ca/news/blumetric-announces-3-8-million-watertech-contract-with-thales-canada-to-upgrade-royal-canadian-navy-ships/ (BluMetric)

• Rheinmetall Canada contract announcement (CAF systems):
  https://www.blumetric.ca/news/blumetric-and-rheinmetall-canada-to-deliver-self-contained-water-purification-systems-to-canadian-armed-forces/ (BluMetric)

• Notice to Proceed / ASUWPS production (SEDAR+ PDF record):
  https://www.sedarplus.ca/csa-party/records/document.html?id=dcc74347b5cb607615816b6877f2d59fba1d48fc94b849f6fe20049753c68e3f (SEDAR+)

Acquisitions / strategy

• Gemini Water acquisition (company release):
  https://www.blumetric.ca/news/blumetric-announces-acquisition-of-u-s-based-gemini-water/ (BluMetric)

• DS Consultants acquisition + financing (company / GlobeNewswire):
  https://www.globenewswire.com/news-release/2025/12/01/3197479/0/en/BluMetric-Announces-Acquisition-of-DS-Consultants-and-15-Million-Brokered-Offering.html (GlobeNewswire)

• DS acquisition closing details (company release):
  https://www.blumetric.ca/news/blumetric-closes-acquisition-of-ds-consultants/ (BluMetric)

Investor materials

• Investor presentation (Planet MicroCap Showcase PDF):
  https://www.blumetric.ca/wp-content/uploads/2024/09/2024-09-25-BluMetric-Investor-Presentation-Planet-Microcap-Showcas (BluMetric)

Market data

• TMX quote page (price/updates):
  https://money.tmx.com/quote/BLM (TMX Money)

Disclaimer

This is not financial advice.

This write-up is for my own research process and to keep myself accountable in my investing journey. I share it publicly so I can track my thinking over time — not to recommend that anyone buy or sell anything.

I currently own shares of BluMetric Environmental (BLM.V).

Please do your own research, understand your own risk tolerance, and never invest based solely on someone else’s opinion — including mine.

Disclaimer

These are my personal notes and thoughts on companies I follow. Nothing here is financial advice or a recommendation to buy or sell. I may hold shares in this company (or not), and that can change at any time. Please do your own research and ensure any investment aligns with your goals and risk tolerance.

Executive Summary

Q2 FY26 was an acceleration quarter. After a softer Q1 that raised concerns about execution and margin compression, NETSOL delivered 21% year-over-year revenue growth, returned to operating profitability, and raised full-year guidance. The quarter materially strengthens the transformation narrative toward higher-quality recurring revenue and AI-driven margin expansion.

The biggest improvement is credibility. Management had signaled a strong pipeline and meaningful AI investment — this quarter shows conversion is beginning. Services revenue surged 41%, subscription revenue continued to grow, and operating leverage started to emerge.

The market may still be anchoring to prior stagnation and FX-driven volatility. But this print shifts NETSOL from “transition story under pressure” to “early execution phase.”

Headline Numbers

Stock: NETSOL Technologies (NTWK)
Share Price: ~$3.00–3.50 (approx.)
Market Cap: ~$35–40M
Enterprise Value: ~$20M+ (after cash)

Quarterly Snapshot

• Revenue: $18.8M

• YoY growth: +21.1%

• Gross margin: 48%

• Operating income: $1.3M

• EBITDA: $1.7M (~9% margin)

• Net income (6M): $(2.1M)

• Cash: $18.1M

• Debt: Minimal / manageable

• Guidance update: FY26 revenue increased to ~$73M+

  
  Growth re-accelerated meaningfully, profitability returned, and guidance was raised. This combination reduces downside risk materially.

Revenue & Business Momentum

Revenue Analysis

• Q2 revenue: +21% YoY

• Services revenue: +41%

• Subscription & support: +5%

• First six months revenue: $33.8M (+~12%)

Services growth was driven by new implementations from major customers. Importantly, management stated these implementations can convert into recurring subscription revenue as deployments mature.

• Growth is accelerating after Q1 softness.

• Services strength signals pipeline conversion.

• Subscription growth remains steady but must improve further to unlock full SaaS re-rating.

• Quality is improving if services convert to recurring revenue over time.

Conference Call Highlights

“Total net revenues increased 21% year over year to $18.8 million… We are anticipating improving margins in the coming quarters.”
— Najeeb Ghauri, CEO

“We launched Check, our AI-enabled credit decisioning engine… combining reasoning, automation, and agentic workflows.”
— Management

“We have increased our full-year fiscal 2026 revenue growth guidance to nearly $73 million or better.”
— Management

• Tone was confident but disciplined.

• AI is being embedded horizontally — not marketed as hype, but integrated operationally.

• Guidance raise reinforces pipeline credibility.

• Margin expansion is expected as investments normalize.

Margins & Operating Leverage

• Gross margin improved to 48% (vs 44–45% prior trend).

• Operating income positive at $1.3M (vs loss prior year).

• EBITDA margin ~9%.

Drivers:

• Implementation scale

• Better cost absorption

• Improved FX dynamics

This looks structural, not temporary. AI hiring and cross-training continue, but profitability improved anyway — a positive signal of operating leverage potential.

If revenue continues compounding double digits, margin ceiling expands meaningfully into FY27.

Strategic & Fundamental Developments

• Launched Check, AI-enabled underwriting engine.

• Signed $50M four-year contract extension with tier-one global auto captive.

• Continued U.S. expansion in dealer market (Transcend Retail traction).

• Strengthened leadership (new CFO appointment).

These developments reinforce:

• long-term contracts.

• Geographic expansion optionality.

• Balance sheet strength for continued investment.

Guidance & Forward Visibility

• FY26 revenue guidance raised to ~$73M+.

• Pipeline described as strong.

• Multi-year contracts provide visibility.

To hit targets, services must convert into recurring revenue and margin expansion must continue.

Key KPI next quarter:

Subscription growth rate acceleration beyond mid-single digits.

FINANCIAL REVIEW

Balance Sheet

• Cash: $18.1M

• Stockholders’ equity: $35.9M (~$3.04/share)

Cash Flow

• EBITDA positive in Q2

• Six-month EBITDA near breakeven

• Continued AI investment

Business is near self-funding transition phase.

Share Capital

• ~11–12M shares outstanding

• Clean capital structure

• Minority interest: Pakistan subsidiary 30%

Important note:

Pakistani subsidiary profits are split 70/30, which reduces consolidated EPS but does not weaken core economics.

Income Statement

• Revenue growth real, not FX-driven.

• Gross margin expansion visible.

• Net losses in 6M period reflect earlier investment phase.

What Improved

• Revenue growth accelerated sharply

• Operating profitability returned

• Gross margin improved

• Guidance raised

• AI rollout tangible

• Long-term contract visibility reinforced

What Still Needs Work

• Subscription growth must accelerate

• Recurring revenue mix expansion critical

• Minority interest impacts EPS optics

• Proof needed that services convert into durable SaaS growth

Investment Take

The thesis is intact — and stronger than two months ago.

Risk has decreased meaningfully after Q2 acceleration. The company now appears to be entering the operating leverage phase of its transformation.

At near book value and low-single-digit EBITDA multiple, valuation remains asymmetric if FY27 delivers 8–10% net margins.

Position sizing should reflect execution risk, but downside is cushioned by balance sheet strength and recurring contracts.

Execution is beginning to catch up with the narrative.

Q1 created doubt.
Q2 restored momentum.

If margin expansion continues and subscription growth accelerates, FY27 could mark the true earnings inflection this thesis has been built around.

References & Sources

• Q2 FY2026 Earnings Press Release – NETSOL Investor Relations

• Q2 FY2026 Form 10-Q – SEC Filing:
  https://ir.netsoltech.com/all-sec-filings/content/0001493152-26-006335/0001493152-26-006335.pdf

• Q2 FY2026 Earnings Call Transcript – Quartr:
  https://web.quartr.com/link/companies/10187/events/417942/report

• NETSOL Investor Relations Page –
  

https://ir.netsoltech.com

• $50M Contract Extension Press Release – Company IR

If you’d like, next we can add:

• 📊 A 2027 valuation section (Bear/Base/Bull)

• 🧠 A Micro Capo Checklist score at the top

• 📈 A normalized EPS bridge toward FY27

Just tell me how you want to layer it.

Disclaimer

These are my personal notes and thoughts on companies I follow. Nothing here is financial advice or a recommendation to buy or sell. I may hold shares in this company (or not), and that can change at any time. Please do your own research and ensure any investment aligns with your goals and risk tolerance.

Executive Summary

This was a transition quarter.

Revenue grew double digits year-over-year, new orders accelerated meaningfully, and backlog stabilized despite lingering government shutdown delays. However, margins compressed and profitability declined as legacy contracts rolled off and leadership transition costs flowed through the income statement.

Importantly, management reiterated they continue to plan around double-digit growth, approved a $10M stock repurchase program, and highlighted improving backlog quality and pricing.

This quarter did not show peak performance — it showed early recovery and strategic repositioning.

Headline Numbers

Stock: OPXS
Share Price: ~$12
Market Cap: ~$84M
Enterprise Value: ~Low 80s (minimal net debt)

Quarterly Snapshot

• Revenue: $9.1M

• YoY growth: +11.6%

• Gross margin: 22.9%

• Operating income: $0.1M

• Net income: $0.2M

• Adjusted EBITDA: $0.7M

• Cash: $5.8M

• Debt: No revolver draw

• Backlog: $37.9M

• New orders: $7.9M (+31.7% YoY)

Revenue growth returned despite program timing issues.
Orders are accelerating.
Margins reset due to legacy contracts and one-time transition costs.
Backlog is stabilizing — not collapsing.

Revenue & Business Momentum

Revenue increased 11.6% YoY to $9.1M.

Segment breakdown:

• Optex-Richardson: +55.9% YoY
  Driven by higher periscope production, XM30 activity, muzzle reference systems, binocular products.

• Applied Optics Center (AOC): –20.1% YoY
  Lower laser filter and optical assembly volumes.

The strength is clearly concentrated in Richardson — the armored vehicle segment. AOC weakness appears tied to timing and contract flow rather than demand deterioration.

Importantly:

• Orders rose 31.7% YoY

• Richardson orders +46%

• AOC orders +20%

Conference Call Highlights

“We expect the first quarter to represent our lowest profitability of the fiscal year, with operating results improving sequentially.”

• confidence in margin recovery.

“Our current backlog reflects stronger pricing and higher value programs.”

• important shift — backlog quality is improving.

“We continue to plan around double-digit growth.”

This reiteration matters given Q4 and shutdown.

“The board approved a new stock repurchase program authorizing up to $10 million.”

At ~$84M market cap, that’s ~12% authorization.

Margins & Operating Leverage

Gross margin: 22.9%

Compression drivers:

• Legacy multi-year contracts

• $0.3M temporary leadership transition overlap

Operating income: $0.1M
Net income: $0.2M
EBITDA: $0.7M

Management expects:

• Loss contracts concluding

• Favorably priced programs ramping

• Sequential margin improvement

Strategic & Fundamental Developments

XM30 Program

Awarded driver periscope assembly design & development contract.
This is a more sophisticated system than legacy periscopes.

ENVG Award

$2.2M optical assembly order supporting enhanced night vision program.
Deliveries begin Q3 FY26.

This diversifies exposure beyond vehicle platforms.

Capacity Expansion

• $2.4M capex plan for FY26

• $0.5M already invested this quarter

• Expanding assembly, prototyping, machining capabilities

Guidance & Forward Visibility

No formal numerical guidance provided.

However:

• Expect positive net income and operating cash flow next 9 months

• Q1 expected to be lowest profitability quarter

• Anticipate margin recovery

• Additional laser filter awards expected as funding resumes

FINANCIAL REVIEW

Balance Sheet

• Cash: $5.8M

• Working capital: $21.2M

• No revolver borrowings

• Inventory increased intentionally (XM30 ramp)

Cash Flow

Operating cash use: –$0.1M
Prior year: +$2.8M

Drivers:

• Lower profitability

• Inventory build

• Payables timing

Capex: $0.5M this quarter

Expectation: Positive cash flow over next 9 months.

Share Capital

• Shares outstanding: 6,937,358

• Minor issuance: 16,700 restricted shares

• New $10M buyback authorization

Buyback size is meaningful relative to market cap.

Shareholder-friendly and aligned.

Income Statement Reality Check

Revenue grew double digits.
Margins compressed due to identifiable factors.
No accounting anomalies.

Normalized profitability should improve as:

• Legacy contracts phase out

• Higher-margin backlog converts

• Transition costs roll off

What Improved

• Revenue growth returned

• Orders +31.7% YoY

• XM30 program progress

• ENVG diversification

• Backlog stabilizing

• $10M buyback authorization

• Strong balance sheet maintained

What Still Needs Work

• Margin recovery execution

• AOC segment performance

• Backlog growth next quarter

• Sequential profitability improvement

This quarter marks an early recovery phase.

Revenue growth returned. Orders accelerated. Backlog stabilized. Capital allocation became more aggressive via buybacks.

Margins compressed, but management expects sequential improvement and clearly signaled that Q1 was the trough.

At ~$12/share:

• ~16–17x trailing earnings

• ~14x forward assuming 15% growth normalization

If backlog converts and margins recover, earnings power re-expands meaningfully into FY27.

Risk has not disappeared — but confidence has improved.

Disclosure & context (important):
I currently do not own ELMD. At today’s price, the stock is trading around ~34× forward earnings, which is too expensive for me right now, even though I like the business and the story.
This write-up is not financial advice. I’m doing this analysis for my own accountability and learning. Do your own research, challenge every assumption, and never outsource conviction.

Also worth noting: earnings are coming up next week or so, which makes valuation and expectations especially relevant right now.

The Big Picture

Electromed is quietly becoming a microcap compounder, not because it sells a medical device, but because it is scaling a direct-to-patient operating system in a notoriously messy reimbursement environment.

This is a process company disguised as a device company.

The question is not whether the business is good.
The question is whether the current price already assumes too much perfection.

The Core Thesis

Electromed’s edge is its ability to control the full workflow: referral → reimbursement → fulfillment → patient support. As that workflow gets faster and cleaner, the company generates both growth and operating leverage, which is rare in small-cap medtech.

CEO Jim Cunniff framed it clearly on the most recent earnings call:

“We started the fiscal year with strong momentum, delivering our 12th consecutive quarter of year-over-year revenue and profit growth. This consistency reflects the strength of our business fundamentals, the dedication of our team and the growing recognition of our SmartVest therapy.”

That’s operator language. Not hype. Not macro excuses. Execution.

Why the Business Is Working

1. A Large, Underpenetrated Market

Bronchiectasis is chronic, irreversible, and underdiagnosed. A significant portion of diagnosed patients already meet reimbursement criteria for therapy — yet are not treated early.

Management highlighted that a large percentage of eligible patients qualify but are not prescribed therapy soon enough, which creates a natural runway for growth without changing reimbursement rules — just improving awareness and behavior.

That’s a powerful setup:
market expansion via education, not regulatory heroics.

2. Sales Force Scaling With Real Productivity

This is still a clinical sale, not a marketing gimmick.

Cunniff was direct when asked where growth comes from:

“Adding sales reps… is part of our secret sauce.”

More importantly, productivity is already there. The company is doing ~$1M+ in annualized revenue per rep, which means scaling doesn’t rely on hope — it relies on replication.

This is how predictable growth is built.

3. Workflow Compression Is Becoming the Moat

This is the most underappreciated part of the story.

Electromed is systematically removing friction from prescribing and fulfillment:

• Electronic prescribing replacing fax-based workflows

• CRM connecting sales and reimbursement teams

• Faster documentation, faster approvals, faster shipment

Cunniff explained it simply in Q&A:

“We can get our average days to ship down almost in half and the same thing for time to approve a prescription.”

That matters because speed:

• improves patient outcomes

• improves conversion

• improves sales productivity

• improves cash efficiency

This is process leverage, and it compounds quietly.

4. Hospitals as a Gateway, Not the Core

Hospital revenue is growing fast, but management is deliberately cautious.

Cunniff called the hospital channel:

“A little unpredictable.”

That’s good honesty. Hospitals are capital-sale driven, committee-heavy, and lumpy. The strategic logic, however, is sound: hospitals are where patients first present, and exposure there increases the odds of home therapy adoption post-discharge.

This is optional upside, not the core engine — and it’s being treated that way.

5. New Drugs = Awareness Tailwind, Not a Threat

A new pharmaceutical entrant has increased attention on bronchiectasis. Management’s take is pragmatic:

“What the drug doesn’t do is it doesn’t clear the mucus… that’s really where we come into play.”

Different tool. Different job. Potentially complementary.

More awareness means more diagnosis, which expands the funnel for everyone actually treating the disease mechanics.

Financial Quality

• Consistent double-digit revenue growth

• High-70s gross margins

• Mid-teens operating margins with room to expand

• No debt

• Ongoing share repurchases

• Strong cash generation

This is not an “adjusted EBITDA” story. It’s real profitability with improving efficiency.

The Real Risk (and the Only One That Really Matters)

Reimbursement friction.

Not reimbursement eligibility — but delays, denials, cycle times, and payer behavior.

If something breaks, it will show up first in:

• accounts receivable

• time-to-approval

• operating cash flow

Management is attacking this risk directly with workflow tools, education, and speed. But it never fully disappears in healthcare. That’s why valuation discipline matters.

Valuation: Why I Don’t Own It (Yet)

At roughly ~28x 2026 forward earnings, ELMD is expensive by my standards.

This is not a “cheap compounder.”
This is a high-quality compounder priced for continued execution.

At this multiple:

• Good execution = fine returns

• Great execution = strong returns

• Any stumble = fast multiple compression

I like the business more than I like the price.

Two-Year Earnings Power (If Things Go Right)

If Electromed continues to execute:

• sustained double-digit revenue growth

• stable high gross margins

• modest operating leverage

• ongoing buybacks

A reasonable 2-year EPS range could look like:

• Base: ~$1.30–$1.45

• Bull: ~$1.55–$1.70

That’s solid — but it still matters what multiple you pay.

Bear / Base / Bull Valuation (2-Year View)

🐻 Bear Case

Execution slows or reimbursement friction rises

• EPS: ~$1.10

• P/E: 16–18×

• Outcome: ~$18–$20

🟦 Base Case

Execution stays solid, margins inch higher

• EPS: ~$1.35

• P/E: 22–26×

• Outcome: ~$30–$35

🚀 Bull Case

Strong share gains + awareness tailwind + clean execution

• EPS: ~$1.60

• P/E: 28–32×

• Outcome: ~$45–$50+

At today’s price, you’re closer to underwriting Base/Bull, not Bear.

What I’m Watching Into Earnings

With earnings coming next week or so, the things that matter most are:

• any commentary on reimbursement delays or approvals

• trends in electronic order adoption

• sales productivity per rep

• hospital growth trajectory (without overinvestment)

• gross margin stability

• cash conversion vs revenue growth

If those stay clean, the story stays intact — even if the stock doesn’t get cheaper immediately.

Final Take

Electromed is a Top Tier business with:

• a real process moat

• a long runway

• disciplined management

• and visible operating leverage

I like the story.
I respect the execution.
I don’t like the current price enough to own it yet.

Sources & References

Company filings & official materials

• Electromed, Inc. Investor Relations:
  

https://investors.smartvest.com

• SEC Filings (10-K, 10-Q, proxy statements):
  https://www.sec.gov/edgar/browse/?CIK=1488917

Earnings calls & financial results

• Q1 FY2026 Earnings Call & Press Release (conference call transcript + results)
  https://investors.smartvest.com/news/news-details/2025/Electromed-Inc--Announces-First-Quarter-Fiscal-2026-Results/default.aspx

• Q4 FY2025 Earnings Call & Full Fiscal Year Results
  https://investors.smartvest.com/news/news-details/2025/Electromed-Inc-Announces-Record-Fiscal-2025-Fourth-Quarter-and-Full-Year-Financial-Results/default.aspx

Research & background

• B. Riley Securities – Initiation of Coverage (Feb 19, 2025)
  (used for background, market structure, and financial framing only)
  https://brileysecurities.bluematrix.com/sellside/Initiations.action

• $MUEL — 12.22% — Paul Mueller Company

• $PPIH — 9.70% — Perma-Pipe International Holdings

• $TGEN — 9.28% — Tecogen

• $TTZ.V — 8.96% — Total Telcom

• $HIMS — 8.86% — Hims & Hers Health

• $KLNG — 6.26% — KOIL Energy Solutions

• $REOP — 5.33% — REO Plastics

• $OPXS — 4.92% — Optex Systems Holdings

• $ACFN — 4.92% — Acorn Energy

• $ETH — 4.71% — Ethereum

• $IDXG — 3.80% — Interpace Biosciences

• $PXHI — 3.23% — PhoneX Holdings

• $KTEL — 3.23% — KonaTel

• $MOJO — 3.16% — Equator Beverage Company

• $BOSC — 2.93% — BOS Better Online Solutions

• $NTWK — 2.36% — NETSOL Technologies

• $VELO — 2.25% — Velo3D

• $LVWD — 2.11% — LiveWorld

• $FTEK — 1.74% — Fuel Tech

The Micro Capo — January Update

January started pretty well for me, but the last week of the month was crazy and very volatile. I’m here for the long run, but as I’ve mentioned before, lately I’ve been using charts and technical analysis much more—and I’ve also been using margin, which naturally leads to more portfolio activity.

When I’m on margin, I try to be more agile and cut risk quickly. That’s why there were plenty of changes this month. The funny part is: I still have a few holdings where the chart doesn’t look great (so I’m technically breaking my rules), but I’m holding because I see a strong short-to-mid term catalyst that could change the company fast—names like TGEN and FTEK.

As always: not financial advice. This is mainly for accountability and to keep my thinking clean.

Portfolio Changes (January)

Closed / Sold

• Closed FSI

• Closed RAVE (very small position)

• Closed MYE (very small position)

These last two were tiny positions. Even though I like them, I want fewer companies overall, and I’ll continue cutting low-conviction names over time. I was already trading on margin, so I decided to reduce risk and clean the portfolio a bit. I probably should have cut the red positions first, but the story there is still compelling, so I chose to cut the smaller positions instead.

Re-Entered

• Re-entered VELO @ $14 - will cut fast if it keeps falling.
  

  

  
  

New Positions

• Started HIMS

• Started LVWD

• Started BOSC

New Position Notes

HIMS

I started HIMS because it’s one of those growth companies that also has real cash generation. The business is scaling fast, but it’s not just a story—there’s real demand, a subscription-like model, and meaningful optionality over time as they expand into new verticals.

From a valuation perspective, this is what stood out to me: with roughly ~$2.3B in revenue growing ~50% YoY, positive free cash flow, and margins that still don’t look “mature,” HIMS trades around ~2.5x sales, which feels low for a subscription-style platform with a large customer base and strong retention dynamics. I’m valuing it on sales for now because they’re still reinvesting aggressively to scale.

A simple bull scenario is: if HIMS reaches ~$5B revenue and eventually normalizes to around ~25% FCF margins, that’s ~$1.25B in annual free cash flow. Put a reasonable 25–30x multiple on that and you can justify a $30–40B valuation (roughly $125–150 per share). I’m not saying that’s guaranteed — but the risk/reward looks asymmetric if execution keeps tracking.

LVWD

I bought LVWD because it’s one of those rare situations where the balance sheet does most of the work for you. The company has no debt, roughly $7.5M of cash, and it’s still generating real free cash flow—so at today’s price, you’re paying very little for the actual business.

It’s illiquid and ignored, which is exactly why it can be mispriced. But that also means I’m viewing it as a safe place to park capital while I wait. I see limited downside and a lot of optionality if margins keep improving or management ever decides to return cash. I’m not trying to trade this—I’m trying to let time and math do the heavy lifting.

BOSC

I entered BOSC because I wanted exposure to defense spending without paying a premium multiple. About 90% of revenue is tied to defense and aerospace, and the core supply-chain business benefits from structurally rising defense budgets in Israel, Europe, and increasingly India. The company is growing around 10–15%, margins are expanding, and the balance sheet is clean with net cash.

At my ~$5 entry, I was paying roughly ~10x earnings for a profitable defense-exposed business, which felt like a sensible place to put money in a volatile market. What makes it more compelling is that the recent selloff looks more technical than fundamental. Earnings keep improving, guidance has been raised multiple times, and wins in supply chain, RFID, and robotics suggest demand is real. If execution continues, the stock doesn’t need heroics—just a normalization in valuation over time.

Company Notes & January News

$TGEN (Tecogen)

Early in the month, Tecogen experienced a sharp selloff after a short seller claimed the company would become obsolete following comments from NVIDIA about next-generation AI chips potentially reducing the need for traditional water-based cooling. The stock dropped more than 20% as the narrative spread that TGEN was simply a “liquid cooling” play tied to a specific chip architecture. I spent time digging into that claim and ultimately added to the position during the selloff.

Shortly after the drop, Tecogen released an 8-K addressing the confusion, and two days later the CEO participated in a call organized by GeoInvesting that provided additional clarity. The key takeaway from both was that Tecogen’s relevance isn’t tied to a single cooling design. Data centers are built around peak load and uptime, not average efficiency. Even as cooling architectures evolve, cooling demand at scale doesn’t disappear — it shifts. More importantly, the binding constraint for data centers is increasingly power availability, not cooling technology alone. In that context, Tecogen’s ability to shift part of the cooling load from electricity to natural gas during peak periods remains relevant regardless of how chip-level cooling evolves.

$KLNG (KOIL Energy Solutions)

$KLNG has quietly put together a solid one-two punch to start the year.

On Jan 6, KOIL announced a significant fabrication contract to be executed at its Houston facility, with work extending through Q1 2026. That matters because it supports backlog visibility, keeps the shop busy, and confirms multi-quarter execution.

Then on Jan 12, the company followed up with another significant win — an integrated subsea distribution system for a U.S. oil company. This isn’t commodity work; it’s custom, mission-critical subsea equipment that plays to KOIL’s core strengths. Together, these announcements reinforce improving bid activity and increasing customer confidence.

$ACFN (Acorn Energy)

On Jan 5, Acorn Energy announced a strategic partnership with AIO Systems to expand OmniMetrix beyond generators and into cell towers, data centers, and utilities. AIO brings a large installed base (110,000+ sites globally), while Acorn secured exclusive rights in the U.S., Canada, and Mexico. Economics are structured as a 50/50 SaaS revenue split after direct costs, with potential upside if performance targets are met. Management also made it clear this initiative is not expected to generate meaningful revenue in 1H 2026, so this is more about positioning than near-term numbers.

I re-entered the stock this month. To be transparent, my timing was driven by technical analysis and this news came afterward (pure luck 😄). But it’s still encouraging to see management actively expanding the opportunity set instead of relying only on the core business.

$MUEL (Paul Mueller)

January update from OTC Markets: the company announced the expiration of its share repurchase program and declared a quarterly cash dividend.

$MOJO (Equator Beverage)

MOJO reported FY 2025 results on January 6, and overall it was a clean update.

Q4 sales were $1.08M vs $0.70M last year, marking the company’s fourth quarter ever above $1M and the third consecutive quarter above that level. Full-year results were the highlight: $4.19M revenue (+29% YoY) and positive EPS ($0.02) versus a loss last year. Management also highlighted taxable income of roughly $490K.

The consistency story keeps getting stronger: multiple years of steady growth, improving margins, and a business that’s now flirting with sustained breakeven. On capital allocation, MOJO repurchased 225K shares in 2025, bringing cumulative buybacks to over 1.08M shares. That said, the main “unlock” remains distribution — in my view, the step-change will come if they can land on major distribution trucks (Pepsi/Coke). Until then, it’s steady progress, but still slow and very volatile.

$OPXS (Optex Systems)

On Jan 5, Optex announced Brian Bushnell as Director of Optical Coatings Technology. I read this as a small but positive signal: adding technical leadership that supports core capability and execution.

$IDXG (Interpace Biosciences)

Preliminary 2025 results confirmed that the core thyroid diagnostics business is still growing at a healthy pace, even after the exit of PancraGEN, which was always the lowest-quality part of the portfolio. More importantly, the company has now fully simplified its capital structure by converting all preferred shares to common and eliminating debt. That’s a big deal. It removes a major overhang, improves transparency, and clearly signals that management and the private-equity owners are preparing the company for the next stage: a Nasdaq uplisting and broader investor attention.

From a valuation standpoint, we’re still very much aligned with the original price target. Nothing in this release forces us to change assumptions — if anything, execution risk has gone down. Assuming Interpace can generate roughly $7–8M of EBITDA by 2027, a conservative 7–8x EV/EBITDA multiple implies an enterprise value in the $55–65M range. With a clean, debt-free balance sheet and a simplified share structure, that translates into a $3.50–$4.50 per share outcome over the next two years. The path to get there is becoming clearer: stable thyroid growth, clean financials, uplisting, and eventually a strategic valuation rather than an OTC one.

In short, this update doesn’t move the goalposts — it moves the timeline forward. The business is doing what it needs to do operationally, and the corporate clean-up that buyers and institutions care about is largely complete. Now it’s about visibility, liquidity, and letting valuation catch up to fundamentals.

FSI Update — Q4 & FY2025 Revenue: Transition Holding, Inflection Still Ahead

FSI Update — Transition Holding, Catalyst Executing

Flexible Solutions International (FSI) first reported Q4 and full-year 2025 revenue showing stability through a heavy transition year. FY2025 revenue came in at ~$38.5M (~+1% YoY) and Q4 revenue at ~$9.1M (~+3% YoY)—not a breakout, but importantly no deterioration despite tariffs, weak agricultural markets, Illinois retooling for food-grade production, and the Panama facility still offline. As CEO Dan O’Brien has said, “While it would have been wonderful to achieve all this without a net loss for the quarter, it was not possible,” reinforcing that 2025 was intentionally a setup year, not an earnings year.

Today, January 26, FSI released the operational confirmation of the key KPI we were tracking: production has begun at the Panama facility. This is not incremental news—it directly activates the strategy discussed throughout 2024–2025. Panama enables tariff-free production for international customers, materially lowers shipping time and cost, and frees up Illinois capacity to expand higher-value food-grade manufacturing. In KPI terms, this flips Panama from a future option into a working asset, reducing execution risk and setting up margin recovery as volumes ramp through 2026.

Putting both releases together, the sequence matters. First, FSI proved it could hold revenue flat during a disruptive build phase. Now, the company has turned on the most important operational lever behind the thesis. The next checkpoints remain unchanged: rising food-grade revenue mix, gross margin normalization, and operating cash flow recovery. With Panama now live, the transition narrative has moved from planning to execution, and 2026 increasingly looks like the year where those investments start to show up in earnings.

KPIs to track into 2026 (what converts the story):

1. Food-grade revenue mix (% of total) — should step up sequentially as the August contract runs full and the January contract contributes;

2. Gross margin trend — watch normalization as one-time setup costs roll off and tariff exposure falls;

3. Panama go-live — first production + international shipments (tariff avoidance and faster delivery); ✅

4. EMP stability — turf/ornamental sales continuing to offset weak row-crop ag;

5. Operating cash flow rebound — management has pointed to improvement beginning Q1 2026. These are the levers that turn a “transition year” into an earnings inflection.

Risk-adjusted TP (2027):

• Bull (30%) — $9: Food-grade ramps toward contracted upside; Panama fully online; net margins ~14%+; EPS ≈$0.60+ at ~15×.

• Base (50%) — $7: Food-grade hits plan; margins normalize to low-teens; EPS ≈$0.55–$0.60 at ~12×.

• Bear (20%) — $4: Slower ramp or margin pressure; Panama benefits delayed; EPS ≈$0.30–$0.35 at ~10–12×.
  Probability-weighted TP ≈ $6.9. Bottom line: this release supports the thesis—FSI cleared the hardest year without breaking. The next two quarters should determine whether the multiple re-rates ahead of 2027.
  
  

Sources

• TGEN — GeoInvesting interview (Maj x Abinand)

• KLNG — KOIL press release (Jan 12) · KOIL IR page

• MUEL — OTC Markets update

• MOJO — FY25 results release

• OPXS — OTC Markets update

• IDXG — Preliminary 2025 results (Yahoo Finance)

• FSI — Q4 and FY25 release · Panama Facility PR

The valuations are based on simple, back-of-the-envelope math, so please don’t take the numbers too seriously.

For me, this table is a way to summarize what I’m looking for in each company going into the next few quarterly reports. I’m sharing it here in case anyone has thoughts or feedback on any of the names — always happy to learn and improve.

This is my late update for December. Going into 2026, I want to go back to what I enjoy the most: micro caps.

2025 was a great year for me overall, although I gave some of it back in November (I mentioned this in my update that month). I tried short term options, Biotech, a lot of leverage, etc. and It was fun, but it also came with anxiety — lots of volatility, big moves up and down, and emotional swings.

I think 2026 could look similar: we may see big drawdowns like April and November, but also strong rallies. Instead of trying to chase the next “hot trade,” I want to focus on what I like best: small companies with real profits, low debt, good management, and niche markets.

You’ll still see a couple of positions that don’t fully match that checklist (like Ethereum and Evolv). For me, those are more like trades, and I expect to close them in the short term unless the story improves a lot.

Long term, I want to own companies where it’s hard to build a position (illiquid) and also hard to exit. That forces me to be more selective and patient.

As of January 6, 2026, the portfolio is around 20 positions, which is a number I feel comfortable owning. Some weights will likely change over time (for example, I feel a bit overweight in TGEN), but overall I like how it looks.

Not financial advice. This is mainly for my own accountability. But knowing someone is reading also pushes me to keep writing. Please do your own research.

1. TGEN — 11.95%

2. ETH — 11.95%

3. PPIH — 10.55%

4. MUEL — 9.14%

5. TTZ.V — 7.03%

6. KLNG — 6.89%

7. EVLV — 6.40%

8. REOP — 4.92%

9. ACFN — 4.57%

10. OPXS — 4.22%

11. FSI — 4.08%

12. PXHI — 3.59%

13. KTEL — 3.09%

14. MOJO — 3.09%

15. IDXG — 1.97%

16. FTEK — 1.97%

17. NTWK — 1.83%

18. MYE — 1.67%

19. RAVE — 1.09%
    
    

    

    
    

    ---

    Portfolio Changes

    Buys

    • Bought: MYE, REOP, RAVE, IDXG

    • Re-entered: ACFN

    Sells

    • Sold: VELO

    ---

    Sell Notes

    VELO

    I really like the company and what they are building, and I plan to re-enter in the future. But the valuation moved too fast. I’ve seen this kind of move before (for example with TGEN), and usually there are opportunities again later.

    I started buying around $5 and sold around $11.50, which was a great run in about 1.5 months.

    Currently the stock is trading near $20, which I think is a crazy rally. They also lowered their 2025 revenue to around $45–$55M (if I remember correctly), so at these prices the stock is trading at almost ~8× sales. The future still looks bright, and 50% YoY growth may be possible, but for me it’s too much. I prefer to buy this kind of company at more reasonable valuations, so I took the win and I’ll watch for a better re-entry later.
    

Holdings — News & Notes

TGEN — Tecogen

TGEN has been a roller coaster lately. I think there’s a lot of noise in the market, and this is a very binary position — basically zero or hero.

I like the technology, but as a shareholder I want to see real purchase orders. That’s what will confirm where the business is going. Until then, it’s still more of a great story than a proven business, even if the “picks and shovels” angle and the data center theme are very strong right now.

I added shares recently, which is why it became my #1 position. The stock dropped around 20% at one point, then IR posted comments on LinkedIn that helped explain the situation. People I respect on X were also defending the thesis, so I don’t feel alone here.

That said, I’m not blindly holding. I have a clear rule: if the thesis changes, or if there’s no meaningful progress by the end of the year, I’ll cut it — whether I’m up or down.

PPIH — Perma-Pipe International

Perma-Pipe ($PPIH) delivered a very strong quarter. Revenue came in at $61.1M, up ~47% YoY, clearly ahead of expectations. They booked $52M in new awards, and despite the strong revenue, backlog still grew to $148.9M, higher than earlier this year and well above last year’s levels. Growth was driven by continued strength in North America and the Middle East, with large projects tied to Saudi Aramco and Qatar. CEO David Mansfield summed it up well: “We are experiencing strong demand across multiple markets and regions, driven by increased activity in North America and the Middle East.”

Margins also stood out, with gross margin rebounding to 34%, showing real operating leverage as volumes scale. That said, I don’t think we can automatically take this $0.77 EPS as a clean run rate yet — it’s still too early to say how sustainable it is. What matters most from here is backlog conversion and whether margins hold. For context, in Q4 2024the company did around $45M in revenue and $0.22 in EPS, so they shouldn’t have any issue beating those numbers next quarter. If they manage to do ~$3 in EPS in 2026, which I think is possible, the stock is trading at roughly a 10x forward P/E at current prices. Looking ahead, a 15–20x multiple feels fair for a company with a solid balance sheet, strong backlog, and improving execution — but we’ll know a lot more once we see how the next quarter plays out.

MUEL — Paul Mueller Company

No recent news. The stock has been drifting lower, but that’s normal for MUEL.

It’s extremely illiquid (~900k shares outstanding, and often ~100 shares/day in volume). Small trades can move the price a lot.

Technically it’s near the 200-day moving average, so I’m watching that level. Valuation looks attractive: around $50 EPS, so roughly ~8× earnings at current prices.

TTZ.V — Total Telcom

No recent news.

Here’s a nice thread if you want to read a bit more on the company

KLNG — KOIL Energy Solutions

KLNG delivered a mixed but constructive Q3, posting $6.4M in revenue, up 22% YoY, with both services and product sales contributing to the growth. CEO Eric Wieck opened the call by emphasizing that “Coil Energy is growing again,” pointing to strong order intake and expanding traction in renewables, including a wind-farm cable-spooling project that earned “excellent feedback during the ongoing project execution.” The company also announced its first two contracts in Brazil, small in size but strategically important as they establish a local foothold in a deepwater market with long-term potential.

The downside of the quarter was the hit to profitability. Gross profit held steady at $2.1M, but margins compressed to 32% due to a heavier mix of pass-through costs. SG&A rose to $2.5M, largely because of a $569K bad-debt write-off tied to a non-responsive UK customer. “As a precaution, we have decided to write off the receivable this quarter… and have filed a lawsuit,” Wieck explained, framing it as a necessary cleanup step. The write-off, combined with higher legal costs and Brazil investments, pushed the quarter to a net loss of ($0.03) per share, versus a $0.04 profit last year.

Despite the earnings dip, the outlook remains strong. KLNG highlighted five significant contract wins across subsea tiebacks, control equipment, flying leads, and cable management, driving its record-high backlog. Wieck noted that customer feedback from the U.S., Brazil, and Norway suggests subsea tieback activity “may become significantly higher than previously anticipated,” aligning with rising global demand. With this backlog base, he said the company now has the flexibility to “strategically test and optimize price points” to lift profitability going forward.

From a thesis perspective, nothing really changed for me this quarter. The market’s reaction feels similar to prior periods where investors overreact to a lumpy print and forget that no real business grows in a straight line. What I actually like here is how management handled the write-off — openly, immediately, and without burying it in adjusted metrics. To me, that’s not weakness; that’s clearing the weeds now so the path ahead is clean. And if they collect the money later, that becomes pure upside optionality.

More importantly, the bigger picture still looks healthy: record backlog, renewables momentum, expanding service demand, and early success in Brazil. I don’t see a business losing momentum — I see one preparing for operating leverage and margin recovery once the backlog converts. For context, I did trim about 30% of my position at the end of October because the allocation had gotten too large. But after this quarter, with the long-term setup intact, I’m seriously considering adding those shares back.

They Just announced another contract — a significant fabrication award tied to offshore/subsea work. Execution starts immediately at their Houston facility and runs through Q1 2026.

EVLV — Evolv Technologies

I like Evolv because security has become a real, unavoidable priority across public venues. Unfortunately, the world we live in today requires better screening solutions that don’t ruin the experience for people attending games, concerts, or theme parks. With massive global events like the World Cup coming this year, the need for fast, non-intrusive, and scalable security systems is only going to increase. Evolv sits right at the intersection of safety, technology, and throughput, which is why adoption keeps growing across stadiums, arenas, and entertainment venues.

From a technical standpoint, the stock also looks interesting here: moving averages are compressing and the price has been consolidating for a while, even as the underlying business continues to expand. For me, this is more of a trade at these levels, but one that has a real chance of turning into a long-term investment if execution continues and adoption keeps building. That expansion is showing up in real life — Evolv continues to stack high-quality wins in sports and entertainment, with recent deployments like Pechanga Arena San Diego, alongside well-known venues such as SoFi Stadium, Crypto.com Arena, the Hollywood Bowl, and Oracle Park. Management recently noted that Evolv now has nearly 100 sports and entertainment customers worldwide, reinforcing the idea that this is a solution gaining real traction at large, high-traffic venues.

REOP

ACFN — Acorn Energy

I re-entered the stock on December 19 around $5.15 and tweeted about it at the time. The entry made sense to me from a technical analysis standpoint, and shortly after, this PR dropped from Acorn Energy.

While the press release is fairly open-ended and doesn’t spell out anything concrete yet, I still see it as positive news. To me, it’s a signal that management is actively looking for ways to support and accelerate their ~20% growth target, particularly across infrastructure assets like cell towers, data centers, and utilities.

I also recently watched a presentation suggesting that an $80/share outcome by 2030 could be achievable using very conservative assumptions. Obviously, execution matters, but between the improving technical setup and management clearly pushing to expand the opportunity set, I think this is a name worth paying attention to again.

OPXS

FSI — Flexible Solutions

Flexible Solutions turned in a decent top-line this quarter: revenue was $10.56 million, up ~13% year-over-year ($9.31 million in Q3 2024). That growth came despite headwinds—tariffs, higher cost of goods, and startup costs tied to their new food-grade contract. CEO Dan O’Brien stated: “In Q4, substantial revenue from the food contract has been generated and Panama has finished improvements leaving only final equipment installation and testing prior to startup later this year.”

However, profits took a step back. The company recorded a net loss of $503,358, or ($0.04) per basic share, compared to net income of $611,858 ($0.05 per share) in Q3 2024. Management attributed much of the loss to the preparation costs for the new food-grade business (installation, training new shifts, etc.), and higher tariffs and raw material costs. These are one-time or transitional in nature, though they do weigh on near-term margins.

Strategically, the story remains interesting. FSI is moving into the food-grade manufacturing space (large contract announced, production ramping), expanding their Panama factory for tariff-avoided production, and maintaining their legacy biodegradable polymer business. As O’Brien said: “While it would have been wonderful to achieve all this without a net loss for the quarter, it was not possible.” The implication: they’re investing now, accepting short-term pain for longer-term optionality. If execution goes to plan, revenue and margin upside could follow.

PXHI — PhoneX Holdings

No recent news.

KTEL — KonaTel

KonaTel’s quarter was mixed on the surface — revenue of $2.17M is still down year over year — but the underlying business is finally cleaner, leaner, and more focused. The IM Telecom restructuring removed meaningful recurring costs, the company collected $850K of its $1M holdback, and management trimmed another $600K in annualized expenses. CPaaS is becoming the real engine here, with wireless POTS installations up 20% sequentially and long-term demand tied to the national copper-line shutdown. For the first time in a while, the core business and IM Telecom aren’t tripping over each other, and KTEL has multiple lanes (SMS, IoT, POTS replacement) showing early momentum.

But the real catalyst — the one that matters more than any quarterly metric — is the California healthcare partnership. As CEO Sean McEwen put it, the model is capital-light: “we bear no financial burden for sales, marketing, or equipment.” This channel began promoting Lifeline to Medicaid customers in October, and its scale potential dwarfs everything else in the business. If adoption accelerates the way management expects, the partnership could fundamentally reset KTEL’s revenue base without the drag of customer-acquisition cost. In short: the company itself looks structurally healthier, but the stock hinges almost entirely on how quickly — and how broadly — this healthcare-driven Lifeline channel ramps.

MOJO

MOJO just reported full-year FY25 results, which helps put the strong Q3 print into proper context. Q3 was announced about a month ago, and at the time I didn’t get the chance to fully comment on it — I had already written a December update draft, but it never went out. That quarter was solid on its own: $1.18M in revenue (+~12% YoY), marking the third consecutive quarter above $1M, with gross profit improving meaningfully thanks to lower ocean-freight costs and a very lean operating structure. For a beverage microcap run with just two employees and an outsourced model, this type of consistency is far more important than any single standout quarter.

What’s more important now is that Q4 and the full-year numbers confirm Q3 wasn’t a one-off. FY25 revenue came in at a record level, reinforcing the idea that MOJO is settling into a higher and more repeatable revenue base. Q4 continued to show healthy demand and distribution traction, while gross margins remained structurally better than a year ago as logistics costs normalized. Profitability is still thin, but losses are now minimal compared to prior years, and the company is operating much closer to sustained breakeven than it was in FY24.

Capital allocation continues to be a quiet but meaningful part of the story. MOJO repurchased additional shares during the year, bringing shares outstanding down to roughly 9.08M. The pace of buybacks has been limited by liquidity and trading volume rather than willingness, but relative to the float, they remain meaningful. Cash on hand is still very tight, with the CEO continuing to provide working-capital support when needed. Taken together — record FY revenue, multiple $1M+ quarters, structurally improved margins, and ongoing buybacks — FY25 paints the picture of a management team focused on steadily building long-term per-share value rather than chasing aggressive or unsustainable growth.

FTEK — Fuel Tech

Fuel Tech posted a relatively soft revenue quarter, with Q3 sales at $7.5M versus $7.9M last year and below analyst expectations of $9.3M. Still, EPS landed at $0.01, matching Street estimates, and the company operated profitably with rising margins. CEO Vince Arnone opened the call by emphasizing that despite the dip in revenue, the underlying business strengthened: “For the third quarter of 2025, we operated profitably, enhanced our gross margins, broadened the client base… and maintained a strong financial position with nearly $34 million in cash and no long-term debt.” That balance-sheet strength is central to the story — it gives Fuel Tech the ability to fund growth in APC, FUEL CHEM, and DGI without tapping capital markets.

On the commercial side, the FUEL CHEM segment continues to outperform, with Arnone raising 2025 expectations to $16.5–$17M, their best year since 2022. The quarter saw a new six-month demo program for a U.S. customer, which Arnone said carries an annual revenue potential of $2.5–$3M if adopted full-time. Meanwhile, the APC segment saw revenue decline due to timing of project execution, but the APC backlog jumped to $9.5M, up more than 20% since June. Fuel Tech also completed a small but strategically important acquisition of Wahlco’s APC intellectual property for just $350K, adding flue-gas conditioning, ammonia-handling assets, and urea-to-ammonia conversion technologies. Arnone called it “a very solid strategic investment… strengthening our technology base.”

Where the call got most interesting — and where investors should be focused — is the data center emissions-control pipeline. The surge in power demand from AI and the digital economy is creating an entirely new market for SCR (Selective Catalytic Reduction) systems, and Fuel Tech is positioning itself as a key supplier. Arnone confirmed the pipeline now includes 8 to 10 active opportunities worth $80–$100 million, noting: “Interest in our technology solutions… has continued throughout the quarter… and we are continuing to engage with multiple potential customers.”Two to three of these opportunities are already in commercial stages with expected decisions before year-end or early 2026. He also highlighted the emergence of nontraditional entrants — including companies repurposing aircraft enginesfor data-center power — and system integrators now approaching Fuel Tech directly. That broadening funnel is one of the clearest signals yet that FTEK is becoming embedded in the early stages of the data-center buildout cycle.

Finally, the company continues to advance its Dissolved Gas Infusion (DGI) technology across water treatment, aquaculture, pulp & paper, and industrial end markets. The long-running fish hatchery demo remains on track into Q1 2026, and interest at WEFTEC (the largest U.S. water-tech conference) was strong. CFO Alan Albrecht highlighted 49% consolidated gross margins, profitable operations, and $33.8M in cash + investments, reiterating that Fuel Tech has “a great platform to evaluate and assist our potential customer base… with a lot of flexibility.” Between strong cash flow, a rising backlog, the Wahlco acquisition, and an enormous data-center emissions pipeline nearing real decision points, Fuel Tech enters 2026 with more optionality than it has had in years — but investor sentiment will hinge on whether even one of those major data center SCR contracts converts in the next few quarters.

IDXG — Starter Position

I read a thesis I liked and started a small position. It’s very illiquid and hard to buy, but it also looks cheap.

Elias’ Investing Journal

A Microcap Diagnostic Company Trading at 2x Earnings and Growing at 19%

Summary…

Read more

a year ago · 28 likes · 9 comments · Elias Papadopoulos

NTWK — NETSOL Technologies

NETSOL signed a $50M, four-year contract extension with a tier-one global auto captive, reinforcing the stickiness of its platform and the strength of its long-standing customer relationships. The deal adds solid revenue visibility at a time when the company is investing in Check AI and expanding in the U.S., helping support the broader transition toward higher-quality, recurring revenue. Not a flashy growth catalyst, but an important signal that the core business remains very much intact.

MYE — Myers Industries

RAVE

I’ve been interested in $RAVE for about a year, but only now it’s starting to look really interesting to me. I’m in the restaurant business, and the I$8 Pizza Inn buffet promotion feels like exactly the kind of simple, high-ROI value lever that can work in today’s environment (people are clearly trading down and looking for cheaper options). The business is also easy to understand: it’s basically a franchisor collecting royalties/fees with a lean HQ. And the story is honestly pretty amazing—when Brandon Solano took over as CEO in 2019 (coming from Domino’s), this used to be a very different company (more complexity, weaker economics). The key change is that it has evolved into a cleaner, more durable model that’s now centered on what actually works: Pizza Inn buffet franchising.

The recent Q4 FY25 + Q1 FY26 results reinforce the core elements of the thesis: 22 consecutive profitable quarters, strong Pizza Inn same-store sales (+6.3% in Q4, +8.1% in Q1) while many restaurant peers are struggling, and a balance sheet that keeps getting stronger with cash + short-term investments > $10.5M. Pie Five continuing to fade is fine—Pizza Inn is clearly the engine—and the standout datapoint is the I$8 promo itself: management disclosed roughly ~30% YoY sales lift and ~35% traffic lift in participating stores, plus continued rollout into FY26. Rave Restaurant Group, Inc. This is not an “exciting” company to follow (it’s slow, it’s not sexy, there’s no hype), but that’s exactly why it feels defensive to me.

Base case is, if they keep executing and the model keeps showing operating leverage, I think there’s a path to something like ~8% revenue growth and pushing toward a ~30% EBIT margin over the next couple of years. They also have meaningful NOL carryforwards (~$16M), which supports using EV/EBIT as a cleaner valuation lens. Rave Restaurant Group, Inc.+1 As of early January 2026, the market is valuing RAVE at roughly ~$44.5M market cap and ~$34.4M EV, reflecting that net cash position. If they do around $12.5M revenue at ~27% EBIT (~$3.4M EBIT), you’re at roughly ~10× EV/EBIT today. If in ~2 years they can get closer to $14.5M revenue at ~30% EBIT (~$4.35M EBIT), and the market starts paying 12–15× EV/EBIT, that implies ~$52–65M EV—and with net cash on top, the equity value can plausibly approach a double from here in a pretty stable, “safe” business (assuming execution stays consistent).

Myers Industries

Ticker: MYE
Price: ~$19.50
Market Cap: ~$725M

1. Why This One Caught My Attention

I recently watched the GeoInvesting open forum presented by and , and what immediately stood out to me is how easy this company is to understand. Myers Industries isn’t built on complex financial structures or aggressive assumptions — it’s a straightforward industrial business with physical products, long-standing customers, and clear operational levers. That simplicity is usually where I’m most comfortable taking a swing.

At the same time, Myers is going through a meaningful reset. Management has launched what they call the Focused Transformation Program — and this doesn’t feel like a slide-deck story. We’re already seeing concrete actions, not just promises. With analysts expecting $1.01 EPS in FY25 and ~$1.47 in FY26, MYE could be setting up for very favorable comps next year. At roughly 13x 2026 earnings, the market still seems unconvinced the changes will fully show up — and that skepticism is what makes the setup interesting.

2. The Business — and Why Material Handling Really Matters

Myers operates across four segments: Material Handling, Lawn & Garden, Engineered Products, and Distribution (MTS). As the company simplifies, it’s becoming clear which parts of the portfolio matter most — and Material Handling is one of the core businesses they are keeping and leaning into.

What they actually sell

Through brands like Buckhorn and Akro-Mils, Myers sells:

• Reusable plastic containers, totes, crates, and bins

• Plastic pallets (often replacing wood pallets)

• Large bulk bins for industrial and agricultural use

• Shelving and storage systems

• Composite matting used on construction and infrastructure sites

• Specialized containers for military logistics, including ammunition and consumables

These aren’t consumer products in the traditional sense. They’re physical infrastructure for logistics and operations.

Where and to whom they sell

Myers sells primarily B2B, directly into industrial supply chains:

• Factories and manufacturing plants, where bins and pallets move parts and finished goods

• Warehouses and distribution centers, often integrated into automated systems

• Agriculture and food processing, where hygiene, durability, and compliance matter

• Infrastructure and construction projects, using composite mats to stabilize heavy equipment

• Military and defense customers, including the U.S. military and NATO allies

Once these products are designed into a customer’s workflow, switching suppliers is inconvenient and risky — which makes demand stickier than it looks.

How they sell

This is not an e-commerce or transactional business. Sales are driven by:

• Direct sales teams

• Long-term contracts, especially in infrastructure and defense

• Customer-specific designs, where containers and pallets are engineered into operations

Some Akro-Mils products do show up in retail channels like Home Depot, Lowe’s, Amazon, and industrial suppliers like Grainger or Uline, but that’s not the core of the thesis. Retail exposure is relatively small and mainly supports brand visibility and incremental volume. The real value is in industrial, infrastructure, and military channels, where margins and customer retention are stronger.

Why this is a better business

This is exactly the type of segment Myers wants to emphasize going forward because it has:

• Mission-critical products — operations don’t run without them

• Low price, high consequence economics — customers don’t switch to save a few dollars

• Embedded demand — designed into logistics systems

• Durable but recurring revenue — products wear out, break, or scale with volume

• Manufacturing scale advantages, which improve margins over time

This is why Material Handling tends to be higher quality and more resilient than distribution or resale-heavy businesses.

3. The Transformation: Cost Structure and Focus

To address years of complexity and uneven execution, management launched the Focused Transformation Program, aimed at simplifying the organization, improving accountability, and lifting margins structurally.

On the Q3 call, management was very clear:

“We are on track to deliver $20 million in annualized cost savings, primarily SG&A, by the end of 2025, having already identified $19 million.”

That’s an important distinction — the savings aren’t theoretical. They’ve largely been identified, and execution is underway.

Actions already taken include:

• SG&A reductions and organizational simplification

• Manufacturing footprint optimization, including idling two of nine rotational molding facilities to improve utilization and lower costs

• Introduction of KPIs and incentive alignment to reinforce execution

This is about resetting how the company operates, not just cutting costs for a quarter or two.

4. Financial Review: Direction Is Improving

Q3 FY25 showed early signs that the changes are starting to work:

• Revenue: $205.4M, slightly up YoY despite softness in consumer and vehicle markets

• Gross margin: 33.9%, up 150 bps YoY, driven by mix, productivity, and lower material costs

• Operating margin: 10.2%, up 20 bps, even with some one-off SG&A noise

• Free cash flow: $21.5M, more than double last year, driven by working capital discipline and controlled CapEx

• Balance sheet: Net leverage down to ~2.6x, trending toward the 1.5–2.5x target range

Overall, cash generation is improving, leverage is coming down, and capital spending remains disciplined at ~3% of sales.

5. The MTS Sale, Near-Term Catalysts, and the Setup

One of the most important strategic moves underway is the planned sale of the Distribution / MTS business. After completing a strategic review, management concluded that MTS no longer fits with where they want the company to go.

CEO Aaron Schaper put it plainly:

“The completion of our MTS strategic review and the conclusion that the right decision is for us to sell this business… once complete, this divestiture will be a large step towards optimizing our portfolio.”

And just as importantly:

“The decision to sell MTS is a step in the right direction, as it will have a notable impact towards improving our margins.”

Selling MTS should:

• Improve consolidated margins

• Simplify the business

• Strengthen the balance sheet

• Allow management to focus on higher-margin manufacturing segments like Material Handling

That gives us two clear short-term catalysts:

1. Execution and progress on the sale of the Distribution (MTS) business

2. Tracking how the identified $19M in cost savings actually flow through the P&L over time

Final Thoughts

Myers Industries feels like a company in the middle of a necessary cleanup. If management executes — selling the lower-margin distribution division, continuing to simplify the organization, and letting cost savings show up in earnings — this becomes a much cleaner industrial business focused on better-quality segments like Material Handling.

If the company can sustainably earn ~$1.50 per share, it’s reasonable to ask whether the market eventually values that at 18–20x earnings, which would imply something closer to $30 per share. That outcome depends entirely on execution, which is why I’ve approached this as a starter position, not a full conviction bet.

For now, I’m watching two things closely: the MTS divestiture and how margins evolve as cost savings roll through. If those move in the right direction, MYE could look very different a year from now.

Sources & References

• Q3 FY25 Earnings Call

• Form 10-Q

• Company website

• GeoInvesting Open Forum

Big picture

FY25 was a strong year for OPXS. Revenue grew ~21.6% YoY, margins expanded, profitability improved, and cash generation remained solid. Q4 came in softer due to contract award and delivery timing delays, largely tied to federal budget uncertainty and shutdown-related noise. The market focused on those delays, and the stock sold off ~10–12%.

Looking past the quarter, the full-year fundamentals improved meaningfully. Backlog dynamics appear driven by timing and mix rather than lost demand, management stated on the call that they “continue to plan around double-digit growth,” and the company is planning $2.4M in capex to expand capacity and capabilities. Taken together, the business story looks better than the stock reaction suggests.

Q4 FY25 – Softer, but for the right reasons

Q4 revenue declined sequentially, reflecting delays in contract awards and deliveries rather than cancellations. Management explicitly pointed to government funding delays and shutdown-related disruptions pushing expected activity out of the quarter.

What mattered to me is what didn’t happen:

• Gross margins held up

• The company remained profitable

• There was no balance sheet stress

This reinforces the view that Q4 weakness was external and timing-driven, not operational. Importantly, on the earnings call, management reiterated that they “continue to plan around double-digit growth”, which doesn’t align with a narrative of deteriorating demand.

Backlog & orders – timing vs. demand

This is the key area investors are debating.

FY25 ended with backlog of ~$39.1M, down from ~$44.2M last year (-11.5% YoY). On the surface, that looks concerning, but the composition matters.

• The backlog decline was heavily concentrated in periscopes, which fell to ~$15.0M from ~$22.7M.

• Management tied this directly to delays in awarding ARC III Abrams replenishment contracts to prime contractors, which were expected earlier in FY25.

That points to timing, not lost demand.

Supporting this interpretation:

• Total new orders were essentially flat YoY

• Sighting systems backlog grew ~47% YoY

• “Other” backlog more than doubled

• OPXS operates under multi-year IDIQ-style contracts extending into 2030, and management disclosed an active bid for a new multi-year IDIQ that could be awarded in the next 3–6 months

Budget context matters

One important detail from the 10-K is that U.S. defense budget allocations are higher for both the M1 Abrams and AMPV programs, platforms where OPXS has a meaningful installed base and long-standing presence.

These are not fringe or experimental programs — they are core ground systems with long lifecycles and strong funding visibility. That matters because it:

• Reduces the risk that delayed periscope awards reflect program weakness

• Increases confidence that delayed ARC III-related work can convert as timing normalizes

In other words, backlog pressure looks more like a mix and timing issue within well-funded programs, not a deterioration in OPXS’s competitive position.

Financial review

The financials help cut through the quarterly noise and answer a simple question: did FY25 actually improve the business?
The answer is yes.

Balance sheet & liquidity

• Cash of roughly $6.4M

• No borrowings on the revolver

• Working capital up to ~$21.1M, a meaningful YoY improvement
  There are no near-term liquidity concerns.

Cash flow

• Operating cash flow of ~$6.9M in FY25

• Cash generation driven by core operations, not one-offs

• Modest capex supported healthy free cash flow

Income statement

• Revenue: $41.3M (+~21.6% YoY)

• Gross margin: ~29.2%, up YoY

• Operating income: ~$7.1M

• Net income: ~$5.1M

• Adj. EBITDA: ~$8.0M

Margins expanded alongside growth, pointing to operating leverage and disciplined cost control.

Capital allocation
Management plans $2.4M in capex over the next 12 months to expand capacity, improve capabilities, and enter adjacent markets. For a conservative micro-cap, this signals confidence in demand visibility, not caution.

Bottom line:
Strong balance sheet, real cash flow, high earnings quality, and low dilution risk.

Market reaction vs. fundamentals

The selloff appears driven by:

• Q4 revenue softness

• A headline backlog decline

• Contract timing uncertainty

But when viewed alongside:

• Double-digit growth planning

• Higher budgets in key programs (M1 Abrams & AMPV)

• Capacity expansion capex

…the reaction looks more like short-term uncertainty overshadowing longer-term execution.

Management Update – CEO Transition

One additional update worth noting: the CEO is stepping down from the role, with a new CEO taking over effective tomorrow.

Importantly, this does not look like a full exit or a loss of alignment. As the outgoing CEO stated on the call, “I’m still the largest shareholder and will continue to be Chairman of the Board and Facility Security Officer.” That matters.

This structure suggests continuity rather than disruption:

• The largest shareholder remains directly involved.

• Board oversight stays intact.

• Retaining the Facility Security Officer role preserves institutional knowledge and security continuity, which is critical in defense manufacturing.

CEO transitions can create short-term uncertainty in micro-caps, but in this case the setup looks more like an operational handoff than a strategic shift. With the former CEO remaining deeply invested — both financially and operationally — incentives remain aligned as the company moves into its next phase.

Final thoughts – sector view, risks, and why OPXS still matters

More broadly, I continue to like the defense sector, and I’m actively looking at another defense company as well. The setup across several niches remains attractive, particularly where companies sit inside long-lived, well-funded programs.

OPXS does have customer and program concentration risk, but that’s true for almost all micro-cap defense suppliers. What matters is whether that concentration is defensible — and in OPXS’s case, I think it is.

The company benefits from meaningful entry barriers, including:

• Required certifications and licenses

• Long qualification cycles

• Intellectual property and patents

• Deep integration into customer platforms

Once qualified, suppliers like OPXS are hard to replace.

There’s also an underappreciated moat in credibility. OPXS has a long operating history, a track record of execution, and is a U.S.-based manufacturer that produces the vast majority of its products domestically. That matters more today than it did a few years ago.

From the 10-K, it’s clear the company:

• Manufactures almost everything in the U.S.

• Aligns closely with “Buy American” and supply-chain resilience priorities

• Fits well with the current administration’s focus on domestic defense manufacturing and reshoring

That alignment doesn’t guarantee growth — but it does reduce risk and improve long-term relevance.

Overall, FY25 showed OPXS growing, expanding margins, and generating real cash. Q4 delays created noise, but not evidence of a broken business. Backlog deserves monitoring, but management’s guidance, budget exposure, entry barriers, and capital allocation decisions point to confidence rather than concern.

Disclaimer:

These are just my personal thoughts and notes on companies I follow — nothing here is financial advice or a recommendation to buy or sell. I may hold shares in some of the names mentioned (or not), and that can change at any time. Please do your own research and make sure any investment fits your own goals and risk tolerance.


Im currently long $REOP.

1. What REOP Really Is

At first glance, REO Plastics looks like a typical injection molding company: small, family-owned, OTC-listed, very illiquid, and with little investor communication. That surface view explains why the stock is largely ignored.

Looking deeper, REOP is not just a commodity job shop. It plays a much more important role inside its customers’ supply chains. The company is involved early in the product lifecycle, helping customers with material selection, design-for-manufacturability, mold-flow analysis, tooling, automation, and testing. Once a part is designed and validated with REOP, switching suppliers becomes expensive and risky.

REOP also works across a wide range of materials, from commodity plastics like PP and PE to high-performance and medical-grade polymers such as PPS, PEI, TPU, and PSU. That kind of process knowledge takes years to build and is hard to replicate. This is where the real moat exists, even if it doesn’t look exciting from the outside.

Because of this, I see REOP less as a simple manufacturer and more as a quiet engineering partner embedded in its customers’ products.

2. Revenue Quality and the Supply-Chain Role

Most of REOP’s revenue comes from long-running production programs. Once a program is in place, it typically runs for years and grows through volume rather than constant new customer wins. This makes the revenue more stable than people usually assume when they hear “injection molding.”

The biggest risk here is customer concentration. The top three customers represent roughly 55% of total revenue. Losing a large customer would hurt results in the short term, and this has happened in the past. That said, many of these relationships have existed for a long time and often span multiple programs, which suggests a meaningful level of stickiness.

This is also where I see similarities with the $VELO thesis, but applied to plastics instead of metal. Like VELO, REOP is a critical manufacturing link in its customers’ supply chains. Over time, there is also potential for more automation, process optimization, and data feedback, helping customers build better and cheaper products while strengthening those relationships.

3. Operating Leverage Starting to Show

One of the most attractive parts of this story is the cost structure. SG&A has remained relatively flat even as the company invested heavily in expanding capacity.

Over the last few years, REOP increased molding throughput by roughly 25%, added 13 new presses, expanded its facilities, and continued investing in automation. The fixed cost base did not grow at the same pace. As utilization improves, incremental revenue should flow more directly to operating income.

This is a classic operating leverage setup. It usually looks boring right before margins start to improve.

4. Balance Sheet, Ownership, and Share Structure

REOP has approximately 445,000 shares outstanding and has not diluted shareholders. In fact, shares outstanding have slightly declined due to small repurchases, which is rare for a micro-cap.

The balance sheet is conservative. Cash and short-term investments exceed total debt, and the debt that exists is tied to productive assets. There is no refinancing risk and no dependence on capital markets.

Book value per share is around $66–67, while the stock currently trades near $58. The company is profitable, cash-generative, and trading below book value.

Management owns about 81% of the company. That aligns incentives with long-term value creation, but it also explains two key risks: extreme illiquidity and the possibility of a future buyout that minority shareholders can’t control.

5. Valuation and Probability-Weighted Fair Value

At current prices, REOP trades around ~6× earnings and ~3–4× EV/EBITDA. The market is valuing it as a no-growth, commodity manufacturer.

Instead of picking a single price target, I prefer to think in scenarios and assign probabilities.

Bear case (20%)
The loss of a major customer leads to a sharp revenue decline. In a worst-case scenario, revenue could fall materially, even up to ~50%. I don’t think this is the most likely outcome given the long customer relationships, but it is possible. In this case, I assume a stock price of $40.

Base case (50%)
Revenue grows low-to-mid single digits as new capacity fills and utilization improves. Margins expand modestly due to operating leverage, and the market starts to recognize REOP as a specialty manufacturer rather than a job shop.

• EBITDA: ~$6.5–7.0M

• Multiple: ~6× EV/EBITDA

• Share price: $95–100 (midpoint: $97.5)

Bull case (10%)
Capacity is fully utilized, margins expand meaningfully, and REOP is valued closer to private-market or specialty manufacturing peers. There is also optionality for a strategic or private-equity acquisition.

• EBITDA: ~$7.5–8.0M

• Multiple: ~8–9× EV/EBITDA

• Share price: $130–165 (midpoint: $147.5)

Status quo (20%)
Nothing changes in the near term and the stock stays around today’s level of $58.

Putting all of this together:

• 20% × $40 = $8.0

• 50% × $97.5 = $48.8

• 10% × $147.5 = $14.8

• 20% × $58 = $11.6

Probability-weighted fair value ≈ $83 per share

That’s roughly 40–45% above the current price, without relying on aggressive assumptions.

Final Thoughts

REOP is not exciting. It’s illiquid, under-followed, and boring. That’s exactly why it trades below book value and at single-digit multiples.

From my view, this setup shares some DNA with the $VELO thesis. In both cases, the company is a critical manufacturing partner inside its customers’ supply chains. The value is not just in producing parts, but in helping customers design better products, lower costs over time, and improve efficiency through process know-how, automation, and data.

The core thesis here is the expansion. REOP has been doing roughly $50 million in annual sales since 2022, largely constrained by capacity. With the recent investments in new presses, facility expansion, and automation, the company finally has the ability to move out of that $50M zone. If utilization improves as expected, incremental revenue should come with operating leverage, not a bloated cost structure.

The risks are real — customer concentration and illiquidity matter — but they are also visible and largely priced in. What doesn’t seem fully priced is the combination of expanded capacity, operating leverage, a conservative balance sheet, and the role REOP plays in its customers’ businesses.

Disclaimer:

These are just my personal thoughts and notes on companies I follow — nothing here is financial advice or a recommendation to buy or sell. I may hold shares in some of the names mentioned (or not), and that can change at any time. Please do your own research and make sure any investment fits your own goals and risk tolerance

1. MUEL – 15.91%

2. PPIH – 11.44%

3. TGEN – 10.42%

4. TTZ.V – 9.95%

5. KLNG – 9.46%

6. FSI – 6.74%

7. OPXS – 6.62%

8. VELO – 6.40%

9. PXHI – 5.00%

10. KTEL – 4.94%

11. MOJO – 3.53%

12. KEQU – 3.44%

13. FTEK – 3.23%

14. NTWK – 2.92%
    
    

    

    
    
    
    What a month. By mid-October I was hitting fresh highs across both my microcap portfolio and my “other” account where I trade options, crypto, and everything in between. The update was basically written, everything looked great… so of course that’s exactly when I decided to head off to the Swiss Alps to drink Aperol spritzes.
    

    

    
    
    
    And naturally, the moment I stepped away, the market decided to implode. Instead of forcing an update mid-vacation — and pretending I wasn’t watching my screen from the mountains — I figured I’d wait until I got back, let all my companies report, and then assess things with a clear head.

    Now that I’ve gone through every earnings release, here’s the interesting part: the fundamentals were actually solid. No disasters, no broken theses, no big negative surprises. But the share prices? Different story. Practically every single name sold off — some violently — even on okay or good results. What can you expect in an environment where even NVDA beats estimates and still closes red the same day? People have big YTD gains, and they aren’t letting the market take a cent back. This entire earnings season has been “sell first, analyze later,” combined with the usual macro noise: wars, elections, recession calls — pick your panic.

    Since I was traveling, I couldn’t use technical analysis the way I had planned. Even so, I made a few risk-management moves. In FEIM, I exited the position to take some profits — not because I dislike the story, but because potential government delays could push revenue recognition, and in this market even tiny timing issues get punished aggressively. The chart wasn’t giving me much confidence either.
    

    

    In ACFN, I had already trimmed half around ~$30 and sold the remaining shares near ~$25 — luckily before it dropped to ~$13. I’ll likely re-enter next week. Now that I’m back and most companies have reported, I’m also starting to add to a few names again.

    Overall, I’m still happy with the businesses I own. Yes, prices dropped — but volatility isn’t the thesis. There’s always something going on in the macro backdrop, and in my (still short) investing career, there has never been a “quiet” period. So the plan remains the same: focus on the companies, ignore the noise, let the theses play out.
    

    Thank you for reading my stuff; I hope it helps you in some way.
    

    Subscribe now

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    MUEL Paul Mueller Company

    No recent news
    

    PPIH Perma-Pipe International Holdings, Inc.
    

    No recent news
    

    TGEN Tecogen Inc.
    

    Tecogen delivered another quarter of strong top-line growth as the company’s pivot into AI data-center coolingcontinues to gain real traction. Revenue hit $7.18M, up 28% year over year, driven almost entirely by a surge in product sales (+115%). CEO Abhinav Rangesh highlighted just how far the pipeline has evolved, saying: “A year ago, our leads were from independent developers. Now we’re presenting our solution to NVIDIA, AMD, and hyperscale developers… and across the board, the feedback has been positive.” The shift from niche HVAC applications to high-power AI facilities is becoming increasingly tangible, with developers visiting Tecogen’s sites and requesting modeling, test data, and dual-power-source chiller configurations.

    Profitability, however, remains pressured as the company invests heavily in service capabilities and engine upgrades. Gross margin fell to 30.4% (down from 44.1% last year), and the quarter ended with a net loss of $0.07 per share. Much of the margin decline came from labor and material costs associated with service-fleet engine replacements—a deliberate move Rangesh defended openly on the call: “If we can double our engine life… that will disproportionately improve our margin.” The company expensed roughly $700K in new engines, which temporarily drags service margins but provides long-term benefits in uptime, oil-change intervals, and reliability. Despite the loss, the balance sheet remains clean with no debt and ~$14M in cash, plus another $2.5M expected to be collected shortly.

    The strategic picture is where the story gets most interesting. Engagement with major developers is rising sharply, Vertiv has assigned the head of U.S. chilled-water operations to oversee the partnership, and validation work is happening in real time. As Rangesh put it: “Given the level of interest from the biggest names in the industry, my confidence level for our strategy continues to increase.” Developers are now modeling Tecogen’s systems into 30–50% of their cooling loads, with some hyperscalers indicating that traditional electric chillers and on-site generation are becoming too power-intensive and too expensive. A single 200MW AI data center can require up to 200 chillers—with Rangesh noting that even half that load “could mean $30 to $50 million” in potential sales. Tecogen doesn’t need the entire AI boom to materialize; it just needs a few projects to tip. And for the first time, those projects feel closer than ever.

    TTZ.V Total Telcom Inc.

    KLNG Koil Energy Solutions, Inc.

    KLNG delivered a mixed but constructive Q3, posting $6.4M in revenue, up 22% YoY, with both services and product sales contributing to the growth. CEO Eric Wieck opened the call by emphasizing that “Coil Energy is growing again,” pointing to strong order intake and expanding traction in renewables, including a wind-farm cable-spooling project that earned “excellent feedback during the ongoing project execution.” The company also announced its first two contracts in Brazil, small in size but strategically important as they establish a local foothold in a deepwater market with long-term potential.

    The downside of the quarter was the hit to profitability. Gross profit held steady at $2.1M, but margins compressed to 32% due to a heavier mix of pass-through costs. SG&A rose to $2.5M, largely because of a $569K bad-debt write-off tied to a non-responsive UK customer. “As a precaution, we have decided to write off the receivable this quarter… and have filed a lawsuit,” Wieck explained, framing it as a necessary cleanup step. The write-off, combined with higher legal costs and Brazil investments, pushed the quarter to a net loss of ($0.03) per share, versus a $0.04 profit last year.

    Despite the earnings dip, the outlook remains strong. KLNG highlighted five significant contract wins across subsea tiebacks, control equipment, flying leads, and cable management, driving its record-high backlog. Wieck noted that customer feedback from the U.S., Brazil, and Norway suggests subsea tieback activity “may become significantly higher than previously anticipated,” aligning with rising global demand. With this backlog base, he said the company now has the flexibility to “strategically test and optimize price points” to lift profitability going forward.

    From a thesis perspective, nothing really changed for me this quarter. The market’s reaction feels similar to prior periods where investors overreact to a lumpy print and forget that no real business grows in a straight line. What I actually like here is how management handled the write-off — openly, immediately, and without burying it in adjusted metrics. To me, that’s not weakness; that’s clearing the weeds now so the path ahead is clean. And if they collect the money later, that becomes pure upside optionality.

    More importantly, the bigger picture still looks healthy: record backlog, renewables momentum, expanding service demand, and early success in Brazil. I don’t see a business losing momentum — I see one preparing for operating leverage and margin recovery once the backlog converts. For context, I did trim about 30% of my position at the end of October because the allocation had gotten too large. But after this quarter, with the long-term setup intact, I’m seriously considering adding those shares back.

    FSI Flexible Solutions International, Inc.

    Flexible Solutions turned in a decent top-line this quarter: revenue was $10.56 million, up ~13% year-over-year ($9.31 million in Q3 2024). That growth came despite headwinds—tariffs, higher cost of goods, and startup costs tied to their new food-grade contract. CEO Dan O’Brien stated: “In Q4, substantial revenue from the food contract has been generated and Panama has finished improvements leaving only final equipment installation and testing prior to startup later this year.”

    However, profits took a step back. The company recorded a net loss of $503,358, or ($0.04) per basic share, compared to net income of $611,858 ($0.05 per share) in Q3 2024. Management attributed much of the loss to the preparation costs for the new food-grade business (installation, training new shifts, etc.), and higher tariffs and raw material costs. These are one-time or transitional in nature, though they do weigh on near-term margins.

    Strategically, the story remains interesting. FSI is moving into the food-grade manufacturing space (large contract announced, production ramping), expanding their Panama factory for tariff-avoided production, and maintaining their legacy biodegradable polymer business. As O’Brien said: “While it would have been wonderful to achieve all this without a net loss for the quarter, it was not possible.” The implication: they’re investing now, accepting short-term pain for longer-term optionality. If execution goes to plan, revenue and margin upside could follow.

    OPXS Optex Systems Holdings, Inc.

    No recent news

    VELO 3D
    

    Write up on VELO
    
    

    Q3 Earnings Review

    PXHI PhoneX Holdings, Inc.

    No recent news

    KTEL KonaTel, Inc.

    KonaTel’s quarter was mixed on the surface — revenue of $2.17M is still down year over year — but the underlying business is finally cleaner, leaner, and more focused. The IM Telecom restructuring removed meaningful recurring costs, the company collected $850K of its $1M holdback, and management trimmed another $600K in annualized expenses. CPaaS is becoming the real engine here, with wireless POTS installations up 20% sequentially and long-term demand tied to the national copper-line shutdown. For the first time in a while, the core business and IM Telecom aren’t tripping over each other, and KTEL has multiple lanes (SMS, IoT, POTS replacement) showing early momentum.

    But the real catalyst — the one that matters more than any quarterly metric — is the California healthcare partnership. As CEO Sean McEwen put it, the model is capital-light: “we bear no financial burden for sales, marketing, or equipment.” This channel began promoting Lifeline to Medicaid customers in October, and its scale potential dwarfs everything else in the business. If adoption accelerates the way management expects, the partnership could fundamentally reset KTEL’s revenue base without the drag of customer-acquisition cost. In short: the company itself looks structurally healthier, but the stock hinges almost entirely on how quickly — and how broadly — this healthcare-driven Lifeline channel ramps.

    MOJO EQUATOR Beverage Company

    MOJO put up another solid top-line quarter, generating $1.18M in revenue, up about 12% from last year’s $1.06M. This marks the third straight quarter with revenue above $1M—an important signal of consistency for a microcap beverage company that operates with only two employees and a network of outsourced partners. Gross profit improved meaningfully to $577K, up from $357K last year, thanks largely to sharply lower ocean-freight costs. The result is a business that continues to show real traction in distribution and demand, even without heavy marketing spend.

    Profitability was essentially breakeven, with a net loss of just $61K versus a loss of $428K last year. SG&A came down materially (excluding stock compensation), and the company continues to run lean. One standout detail this quarter: inventory jumped to $650K, up from $219K at year-end, suggesting they’re building stock to support higher revenue going forward—a healthy sign for a growing beverage brand. Cash is tight at $11K, but that’s typical for MOJO’s model, and the CEO continues to provide working-capital loans as needed.

    MOJO also repurchased 75,000 shares in Q3, bringing the year-to-date total to 225,000 shares. That’s below the company’s stated target of 150,000 shares per quarter from prior communications, but it appears volume constraints—not willingness—are the limiting factor. With outstanding shares now down to 9.08M, the buybacks continue to be meaningful relative to the float. While the company still operates with very tight liquidity, the combination of recurring million-plus revenue quarters, improved gross margins, and continued buybacks paints the picture of a management team trying to quietly build long-term per-share value rather than chase aggressive, unsustainable growth.

    FTEK Fuel Tech, Inc.

    Fuel Tech posted a relatively soft revenue quarter, with Q3 sales at $7.5M versus $7.9M last year and below analyst expectations of $9.3M. Still, EPS landed at $0.01, matching Street estimates, and the company operated profitably with rising margins. CEO Vince Arnone opened the call by emphasizing that despite the dip in revenue, the underlying business strengthened: “For the third quarter of 2025, we operated profitably, enhanced our gross margins, broadened the client base… and maintained a strong financial position with nearly $34 million in cash and no long-term debt.” That balance-sheet strength is central to the story — it gives Fuel Tech the ability to fund growth in APC, FUEL CHEM, and DGI without tapping capital markets.

    On the commercial side, the FUEL CHEM segment continues to outperform, with Arnone raising 2025 expectations to $16.5–$17M, their best year since 2022. The quarter saw a new six-month demo program for a U.S. customer, which Arnone said carries an annual revenue potential of $2.5–$3M if adopted full-time. Meanwhile, the APC segment saw revenue decline due to timing of project execution, but the APC backlog jumped to $9.5M, up more than 20% since June. Fuel Tech also completed a small but strategically important acquisition of Wahlco’s APC intellectual property for just $350K, adding flue-gas conditioning, ammonia-handling assets, and urea-to-ammonia conversion technologies. Arnone called it “a very solid strategic investment… strengthening our technology base.”

    Where the call got most interesting — and where investors should be focused — is the data center emissions-control pipeline. The surge in power demand from AI and the digital economy is creating an entirely new market for SCR (Selective Catalytic Reduction) systems, and Fuel Tech is positioning itself as a key supplier. Arnone confirmed the pipeline now includes 8 to 10 active opportunities worth $80–$100 million, noting: “Interest in our technology solutions… has continued throughout the quarter… and we are continuing to engage with multiple potential customers.”Two to three of these opportunities are already in commercial stages with expected decisions before year-end or early 2026. He also highlighted the emergence of nontraditional entrants — including companies repurposing aircraft enginesfor data-center power — and system integrators now approaching Fuel Tech directly. That broadening funnel is one of the clearest signals yet that FTEK is becoming embedded in the early stages of the data-center buildout cycle.

    Finally, the company continues to advance its Dissolved Gas Infusion (DGI) technology across water treatment, aquaculture, pulp & paper, and industrial end markets. The long-running fish hatchery demo remains on track into Q1 2026, and interest at WEFTEC (the largest U.S. water-tech conference) was strong. CFO Alan Albrecht highlighted 49% consolidated gross margins, profitable operations, and $33.8M in cash + investments, reiterating that Fuel Tech has “a great platform to evaluate and assist our potential customer base… with a lot of flexibility.” Between strong cash flow, a rising backlog, the Wahlco acquisition, and an enormous data-center emissions pipeline nearing real decision points, Fuel Tech enters 2026 with more optionality than it has had in years — but investor sentiment will hinge on whether even one of those major data center SCR contracts converts in the next few quarters.

    NTWK NetSol Technologies, Inc.

    Short thesis on X
    

    https://x.com/RodrigoLezama7/status/1981795192215605417?s=20
    
    
    NETSOL entered FY26 with the foundations of a classic software transformation story — rising recurring revenue, improving margins, and early traction for its AI-driven products. That was the core of the original thesis: if NETSOL could pair mid-to-high single-digit growth with expanding gross margins and growing SaaS mix, earnings power could inflect meaningfully. The long-term upside centered around Check AI, the company’s new AI underwriting engine, which promises faster credit approvals and higher profitability across its global auto-finance client base. With NETSOL trading around ~8× forward earnings, the setup looked asymmetric, requiring only steady execution to justify a materially higher valuation.

    Q1 FY26, however, was a reminder that transformations rarely move in straight lines. Revenue grew 2.8% — slower than hoped — and margins compressed as the company deliberately front-loaded investments in sales capacity and AI integration. The quarter ended with a net loss of $2.4M, driven heavily by FX volatility and a 36% jump in sales and marketing expenses. But beneath those near-term pressures, the structural pillars of the thesis strengthened: subscription and support revenue rose 9.4%, SaaS mix continued to climb, and the company secured meaningful strategic wins. Sonic Automotive, a Fortune 500 dealer group, selected NETSOL to lead a major digital transformation discovery phase, while in Asia, new deployments and partnerships reaffirmed the company’s dominance in the Chinese automotive finance ecosystem. As CEO Najeeb Ghori put it, “Our business fundamentals remain solid… our pipeline is stronger than it has ever been.”

    The big picture is unchanged: NETSOL is leaning into recurring revenue, expanding globally, and building an AI-enabled platform that could materially improve margins over time. The quarter introduces a delay, not a detour. The investments made today — particularly in Check AI and U.S. market expansion — increase the probability that FY26–27 deliver the margin expansion and earnings growth your thesis was built around. With a healthy cash position of $22.7M, no debt concerns, and a stronger pipeline across APAC and the U.S., NETSOL is still positioned to transition from “potential” to “execution.” The catalysts remain the same; the timeline simply stretched.
    
    
    

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    • X - @rodrigolezama7

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These are just my personal thoughts and notes on companies I follow — nothing here is financial advice or a recommendation to buy or sell. I may hold shares in some of the names mentioned (or not), and that can change at any time. Please do your own research and make sure any investment fits your own goals and risk tolerance

Q3 2025 Financial Highlights

Stock:
Share price: ~$4.90
Market cap: ~$97.5M

Velo3D’s Q3 wasn’t about surprises — it was about execution. Execution on RPS growth, on cost discipline, on backlog quality, and on the slow but steady march toward profitability. If Q2 was about resetting expectations, Q3 was about proving that the turnaround is moving forward quarter by quarter.

Arun Jeldi opened the call with a clear message:

“We are delivering steady growth, operational improvement, and expanding margins, all while maintaining a clear line of sight toward profitability in the first half of 2026.”

For a company that spent last year fighting through debt and structural issues, the tone has clearly shifted toward controlled growth and improving fundamentals.

Headline Numbers

• Revenue: $13.6M (vs $8.2M YoY)

• Adjusted loss per share: ($0.54) vs. ($23.59) YoY

• Gross margin: ~3% (improved from −11.7% in Q2)

• Adjusted EBITDA: −$7.3M (vs −$9.7M YoY)

• Net loss: $11.8M (vs $23.1M YoY)

• Operating expenses: $11.1M (vs $22.9M YoY)

• Backlog: $21.1M

• Cash: $11.8M

• Raised: $17.5M via public offering ($3.00/share)

Management reaffirmed 2025 guidance:

• $50–$60M revenue

• 30% gross margin in Q4

• EBITDA-positive 1H 2026

These numbers match everything the company has been communicating for almost a year.

Revenue, Margins & RPS Momentum

Revenue of $13.6M was solid and consistent with Q2, showing the business is stabilizing around a healthier quarterly rhythm. The YoY comparison looks even stronger given that Q3 2024 included a one-time $5M license fee that boosted margins last year.

Sequentially, gross margin improved meaningfully, climbing from −11.7% to +3%. CFO Al Xu explained why:

“Gross margin improved due to higher absorption of overhead as RPS volume increased.”

RPS continues to build momentum.

• Bookings up 22% QoQ

• 48% of bookings from Space & Defense

• New customers accounted for over 9% of bookings

This shift toward recurring, high-value production work is beginning to reshape the revenue profile.

Arun emphasized this:

“RPS is becoming the preferred pathway to production-grade additive manufacturing.”

Operating Expenses – Leaner, More Disciplined

This is one of the biggest changes in the company:

• OpEx cut nearly in half YoY

• Non-GAAP OpEx at $9M

The business is running far leaner than before without sacrificing growth initiatives or product development. Arun highlighted the importance of this discipline:

“Through disciplined cost management and targeted investments, we are improving margins and moving toward positive EBITDA in the first half of 2026.”

Backlog – High-Quality Growth

The backlog reached $21.1M, up from $16M in Q2.

Arun added:

“Backlog grew to $21 million… reflecting strong repeat orders and long-term production contracts from customers embedding Velo3D into their mission-critical supply chains.”

Just as important, management confirmed in Q&A that the legacy low-margin backlog will be cleared by Q4, which is critical for margin expansion:

“Yes, Q4 will have gone through most of the old legacy backlog.”

Balance Sheet – Better, but Still Tight

The uplisting and offering were critical:

• $17.5M raised

• Cash now $11.8M

• Inventory reduced from $50M → $35M (healthier mix)

• Total debt: ~$23M

The company is still not fully self-funding, and the 10-Q continues to flag going-concern risk, but the liquidity position is stronger than at the start of the year.

Cash Flow – Burn Improving but Not Gone

Nine-month operating cash flow improved materially:

• Operating cash burn: −$19.6M (vs −$30.5M YoY)

• Financing inflow: +$32.3M (public offering)

Burn is still meaningful, but the improvement shows the cost actions and working-capital efficiencies are real.

Strategic Wins – Building a Defense & Aerospace Moat

Q3 added several important long-cycle wins:

• $6M in Navy agreements (CuNi alloy qualification)

• Partnership with U.S. Army DEVCOM AvMC

• Partnership with Linde AMT for domestic CuNi 70/30

• AS9100D certification for RPS QMS

• iRocket partnership expansion

• Integration of Dyndrite LPBF Pro

Arun highlighted this shift:

“Recent partnerships with the U.S. Navy, Army DEVCOM, and Linde AMT strengthen our backlog and support delivery of high-value production capabilities.”

These are exactly the kinds of contracts that stick for years once qualified.

Guidance – Fully Reaffirmed

Management reaffirmed everything:

• $50–60M revenue for 2025

• >30% GM in Q4

• EBITDA positive 1H 2026

Arun closed the call with:

“We are improving margins, strengthening our operations, and scaling our technology for long-term growth.”

Conclusion – A Quarter That Strengthens the Turnaround

Q3 wasn’t flashy. It was steady, predictable, and exactly what a real industrial turnaround looks like.

What improved

• Revenue up strongly YoY

• Margins improved sequentially

• OpEx almost cut in half

• Backlog up to $21M

• RPS momentum accelerating

• Defense partnerships growing

• Balance sheet improved

• Legacy backlog clearing by Q4

What still needs work

• Gross margins still low

• Cash burn still meaningful

• Business not self-funding yet

• Execution required to hit EBITDA in 2026

The takeaway

The quarter confirmed a clear narrative:
Velo3D is becoming a lean, recurring-revenue manufacturing platform with growing exposure to defense, space, and reshoring — exactly the markets where long-cycle adoption rewards early innovators.

There’s still risk here, but for the first time in years, the path to profitability looks realistic.

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These are just my personal thoughts and notes on companies I follow — nothing here is financial advice or a recommendation to buy or sell. I may hold shares in some of the names mentioned (or not), and that can change at any time. Please do your own research and make sure any investment fits your own goals and risk tolerance

Ticker: $VELO (NASDAQ)
Market Cap: ≈ $99 million (as of Oct 2025)
Industry: Metal Additive Manufacturing / Advanced Manufacturing
CEO: Dr. Arun Jeldi
Headquarters: Campbell, California
FY 2025 Revenue Guidance: $50–60 million
FY 2026 Target: $65–80 million
Profitability Target: EBITDA positive in 1H 2026

“We’re not building another 3D-printing company.
We’re building an on-demand manufacturing network — a digital supply chain for critical parts.”
— CEO Arun Jeldi

Recently, and Atrium Research did an excellent interview with Velo3D’s CEO, Dr. Arun Jeldi, which helped me understand the company’s new direction much better.
Velo3d it’s not just about 3D printing anymore; it’s about reshoring, integration, and digital manufacturing.

One of my first write-ups on this blog was about a company called $HANZA — a European reshoring and manufacturing story.
That experience made me appreciate how powerful it can be when a company brings production back home and controls more of its own supply chain.
That’s why this story about Velo3D ($VELO) caught my attention.
The thesis feels very similar — just based in the U.S. instead of Europe.

For most of the past few years, though, Velo3D wasn’t exactly a success story.
It went public during the SPAC boom with big promises about “revolutionizing manufacturing,” but reality hit hard.
Sales were inconsistent, margins were negative, and the company was burning through cash.

By late 2024, Velo3D was deeply in debt and facing the risk of delisting.
That’s when Dr. Arun Jeldi stepped in — and started changing everything.

Arun Jeldi’s background is not what you’d expect for someone leading an advanced manufacturing company.
He started out in healthcare, not aerospace or industrial engineering.
But around 2021, he began investing in manufacturing businesses that focused on lightweight metals like magnesium and aluminum — materials that are becoming essential in defense, aerospace, and electric mobility.

He built a small ecosystem of companies around that idea:

• Lite Magnesium Products, which produces magnesium components for aerospace and defense.

• Crown Magnesium, focused on raw magnesium extraction.

• And Arrayed Additive, his own company developing additive manufacturing (AM) applications using those lightweight alloys.

Through Arrayed Additive, Jeldi became a customer of Velo3D.
He needed a 3D-printing system that could handle magnesium powder — a difficult and risky material that most OEMs refused to touch.
Velo3D was one of the few companies willing to work on that challenge.

That business relationship would eventually lead him to take over the company.

From Customer to CEO

By late 2024, Velo3D was in financial distress.
His company, Arrayed Additive, already held a portion of Velo3D’s debt through a subsidiary called Arrayed Notes Acquisition Corp.
Rather than let the business fail, Jeldi stepped in with a debt-for-equity exchange: canceling about $22.4 million (roughly 82%) of outstanding debt in return for new shares.

That deal made Arrayed Additive the majority owner of Velo3D, holding about 95% of its shares.
In December 2024, Jeldi became CEO and a member of the board, while six previous directors resigned.

So he didn’t just invest — he restructured the entire company.
He turned a struggling 3D-printing business into a clean, refocused platform with a new financial foundation and a clear mission.

Under Jeldi’s leadership, Velo3D isn’t trying to compete as another 3D-printing vendor.
He wants to build a digital foundry — a connected manufacturing network that can produce critical parts on demand, using Velo3D’s hardware, software, and data systems.

His strategy rests on three main pillars:

1. Financial discipline.
   Clean up the balance sheet, cut unnecessary costs, and focus only on profitable, recurring revenue streams.

2. Vertical integration.
   Control the raw materials (feedstock) through his other magnesium and aluminum ventures.
   This helps improve margins, secure supply, and align with the U.S. government’s reshoring and defense modernization initiatives.

3. Rapid Production Solutions (RPS).
   Instead of trying to sell a $2–3 million machine right away, Velo3D now offers to print parts for customers first.

   • They help clients develop and qualify a specific component.

   • Once that part proves successful, the customer usually scales up — buying multiple machines or entering long-term supply agreements.

   • This approach builds recurring revenue and reduces the upfront barrier to entry.

It’s basically a “try before you buy” model, but for industrial manufacturing.
Jeldi calls this approach “Reborn to Reshore” — the idea of rebuilding U.S. manufacturing capacity through a smarter, data-driven supply chain.

Why This Matters

The U.S. is going through a new industrial revival — reshoring production, modernizing defense, and expanding advanced manufacturing in areas like aerospace, semiconductors, and energy.
And Velo3D is one of the only American companies that can make large, complex metal parts domestically, with full digital traceability.

That traceability creates a strong moat: once a part is certified for aerospace or defense use, it can’t easily be re-made on a competitor’s printer without a long and costly requalification process.
That means long-term customer stickiness and recurring work.

If Jeldi executes — growing RPS, improving margins, and reaching profitability — Velo3D could move from a “broken SPAC” to a strategic manufacturing asset at the heart of America’s next industrial cycle.

The Business Model – From Machines to Manufacturing-as-a-Service

After the restructuring, Velo3D’s business model looks completely different from what it used to be.
It’s no longer about selling one expensive machine at a time and hoping customers figure out how to use it.
Now, it’s about building a profitable manufacturing network — one that combines machine sales, in-house production, and recurring service revenue into a single, scalable system.

The first part of the business is still hardware — the large-format Sapphire 3D printers that Velo3D designs and builds.
These machines can print metal parts with complex geometries that traditional manufacturing methods simply can’t handle

They’re mainly used in aerospace, defense, and energy, where weight, precision, and reliability really matter.
Instead of chasing volume, the company is now focused on selling fewer, higher-value systems to customers who can fully integrate the technology into production.

The second and most important piece is Rapid Production Solutions (RPS) — the model that really defines the new Velo3D.
Here’s how it works: instead of shipping a $2–3 million printer to a customer who then has to hire engineers, set up a facility, and go through a long learning curve, Velo3D installs and operates the machine inside its own facility.
The client buys the machine, but it stays at Velo3D’s site, fully managed by Velo’s team.

This setup saves the customer a lot of time and money — no need to build infrastructure or hire specialized operators.
At the same time, owning the machine gives the client priority access to production.
They can print parts whenever they want without waiting in line behind other RPS jobs.
It’s the best of both worlds: the efficiency of a shared production center with the control of ownership.

Once those parts are fully qualified and proven, customers often decide to buy more systems or transition the technology into their own facilities later on.
That’s why RPS is more than just a service — it’s a gateway into long-term machine sales and recurring contracts.
It also creates deep relationships with customers who now see Velo3D not as a vendor, but as a key production partner.

The third part of the business is services and consumables — things like maintenance, software licenses, metal powders, and replacement parts.
Every installed printer generates ongoing revenue throughout its life.
This segment may not sound exciting, but it’s the most stable and predictable one, helping balance the lumpier machine and project revenue.

Together, these three segments make Velo3D look less like an equipment manufacturer and more like a manufacturing-as-a-service platform.
The strategy is simple: grow recurring and production-based revenue (RPS and services) so that it stabilizes the business and gradually lifts overall margins.

Rapid Production Solutions (RPS) – The Core of the Strategy

The RPS model is a big shift in mindset — from selling hardware to solving customer problems.
Instead of saying “buy our printer,” Velo3D says “let’s prove what it can do for you first.”
The company helps each client identify a high-value part that’s difficult to produce with traditional methods, then prints it in-house using its own systems and engineers.

This approach removes barriers that usually slow adoption.
Customers don’t have to spend millions upfront or deal with technical risks before seeing results.
They just get working parts — faster, cheaper, and often lighter than before.
Once they see the results, they usually want more control and capacity, which leads them to buy additional systems.
It’s a smart way to turn short-term printing jobs into long-term partnerships.

In practice, this setup also keeps Velo3D’s facilities fully utilized, which helps absorb fixed manufacturing costs and smooth out cash flow.
It’s an efficient way to scale while improving margins — something the company desperately needed a year ago.

The Digital Advantage – Data, Traceability, and Trust

A big reason this model works is because of Velo3D’s software ecosystem.
Every print job on a Velo3D system captures thousands of data points — temperature, geometry, stress, and other variables.
All that data feeds into two proprietary platforms: Flow, which handles design and print preparation, and Assure, which provides real-time quality control.

Together, they create a digital twin — a detailed digital record of every part printed.
That’s incredibly valuable for aerospace and defense customers, who need traceability for every component they use.
It also allows production to be easily scaled or duplicated in other facilities while maintaining the exact same quality.
That’s what Jeldi means when he talks about building a “digital foundry” — a network of machines connected through shared data and process control.

Early Signs of Progress

Even though the turnaround is still in its early stages, the first signs are positive.
Operating expenses are down about 40% year-over-year, now roughly $8 million per quarter on a non-GAAP basis.
RPS bookings jumped 79% quarter-over-quarter, with nearly 90% of that growth coming from space and defense clients.
The company’s backlog grew to $17.8 million by July 2025, up from $15.9 million a month earlier.

Management reaffirmed their outlook for 2025: between $50–60 million in revenue, gross margins above 30% by the fourth quarter, and EBITDA-positive in the first half of 2026.
They’re also relocating out of California to reduce labor and overhead costs, a move expected to lift gross margins by roughly 15 %.

Customer Base and Market Focus

Velo3D’s customers include some of the biggest names in advanced manufacturing: SpaceX, Momentus, Vaya Space, Lam Research, Honeywell, and Mears Machine.
These are companies that care about precision, traceability, and repeatability — exactly what Velo3D’s systems and software are designed to deliver.

These types of partnerships take time to form but are extremely sticky once established.
In aerospace and defense, switching suppliers means going through a new certification process that can take years — which gives Velo3D a quiet but powerful competitive moat.

Financials

Over the past year, Velo3D has been completely reshaped, debt eliminated, expenses cut, and a leaner team focused on efficiency.
Operating costs are down to about $8 million per quarter, and management says they have enough capital to reach profitability in 2026.

In Q2 2025, Velo reported a $15.9 million backlog and reaffirmed $50–60 million in full-year revenue guidance.
The improvement isn’t coming from aggressive sales — it’s coming from a smarter model.
Instead of chasing one-off machine deals, the company is shifting toward recurring RPS contracts, where customers buy a system that stays inside Velo’s facilities and run parts on demand.
This approach gives customers flexibility without the cost of building their own setup, while giving Velo steady, high-margin revenue and better machine utilization.

Margins are still negative — about $19 million in printer sales vs. $23 million in cost of goods through the first nine months — but that gap is closing.
As production ramps from 8 machines this year to roughly 20 by year-end and 30 in 2026, fixed costs will spread out and margins should turn positive.
The move out of California is also expected to lift margins by around 15 % through lower labor and overhead.

Growth Outlook and Valuation

To reach around $80 million in revenue by 2026, Velo3D doesn’t need a miracle — just consistent execution. The company is guiding for roughly $55 million in 2025, so we’re talking about 40–50% growth over the next year. The mix shift is what matters: hardware grows steadily, but the real lift comes from Rapid Production Solutions (RPS) and recurring service revenue.

If things unfold as management expects, the model looks something like this — steady hardware deliveries, a fast-expanding RPS business, and higher recurring income from software and consumables. That combination pushes total revenue toward the $80–85 million range, with gross margins above 30% once the relocation savings and higher factory utilization kick in. With operating expenses around $45 million, that setup should get Velo3D to roughly breakeven EBITDA by mid-2026.

Longer term, if the installed base scales toward a few hundred machines over the next five years, annual revenue could reach the $150 million range, but the near-term focus is proving the model and hitting profitability. The KPIs are simple.

• Deliver around 30 systems in 2026.

• Keep RPS bookings growing at a strong double-digit pace.

• Hold 30%+ gross margins as volume builds.

• Maintain tight cost discipline while scaling.

At today’s market cap of about $100 million, the stock trades near 1x forward 2026 sales — inexpensive if management executes. Using reasonable assumptions:

• In a base case, where revenue lands near $80M and margins improve as planned, the company could be worth $250–300M over the next 18–24 months.

• In a bull case, if RPS adoption accelerates and profitability comes faster, valuation could stretch toward $500–600M.

• In a bear case, if growth stalls or delays extend breakeven, value might stay closer to $120–150M.

Assigning probabilities — 50% base, 25% bull, 25% bear — gives a weighted fair value around $275–300M, or roughly 2.5–3x the current market cap.

Risks

1. Execution & Margin Risk – scaling RPS, relocation timing.

2. Liquidity/Dilution – cash under $1 M; more capital likely needed before 2026.

3. Customer Concentration – 87 % of bookings from Space & Defense.

4. Competition – Desktop Metal, Markforged, SLM Solutions, 3D Systems.

5. Supply-Chain Scaling – quality control as production increases.

6. Government Budget Timing – contract delays can shift revenue.

7. Integration of Arrayed Additive – culture/system alignment risk.

**Q3 Earnings (Nov 10)

References:

Velo3D Q2 2025 Press Release (PDF)

Velo3D Q2 2025 10-Q Filing

These are just my personal thoughts and notes on companies I follow — nothing here is financial advice or a recommendation to buy or sell. I may hold shares in some of the names mentioned (or not), and that can change at any time. Please do your own research and make sure any investment fits your own goals and risk tolerance

IMPORTANT

I pulled my earlier $TTZ.V post because I realized I’d made a math mistake — I was using the $0.17 share price from when I first drafted it. I re-ran all the numbers at $0.26, and the picture’s still solid — not as dirt cheap, but still a profitable, cash-rich company with good upside. We all make mistakes — that’s how we learn. This is exactly why it’s so important to always do your own research — mistakes like this can happen to anyone. Everything I write here should be taken with a grain of salt; I do this mainly for myself. But sharing it publicly keeps me accountable and forces me to be more disciplined in my research.

Total Telcom ($TTZ.V) is one of those small, quietly profitable companies that keeps delivering steady results. It’s debt-free, cash-rich, and has grown consistently without any dilution — the kind of balance sheet that’s rare in microcaps.

And this time, there’s finally a catalyst worth watching: the company’s Water-TraX telemetry system is expanding into South America, with pilot programs underway in Brazil, Argentina, Chile, and Guyana. That’s real business development, and it shows that Total Telcom’s technology can scale well beyond its core North American market.

Key Highlights

• Revenue: $2.20 M (+12%) vs $1.97 M in 2024

• Gross profit: $1.34 M (+14%) with 61% margins

• Operating income: $279 K (+26%)

• Net income: $342 K (+17%) or $0.013 EPS

• Cash + term deposits: $3.21 M (+15%)

• Working capital: $3.55 M (+17%)

• Debt: None — only ~$335 K in lease liabilities

• Free cash flow: ≈ $370 K positive

The business continues to show slow but steady growth, and more importantly, it remains self-funded and profitable — no debt, no dilution, and plenty of cash.

Water-TraX – The Main Catalyst

Water-TraX has become one of the company’s most promising growth lines. It’s a real-time telemetry platform used for water management, flood monitoring, and environmental data tracking — a system that helps industrial clients and governments monitor key infrastructure remotely.

In FY2025, Total Telcom signed three new distributors to roll out Water-TraX in South America. Pilots are already active in Brazil, Argentina, Chile, and Guyana, targeting government, agriculture, and mining clients — industries where once you land a contract, it tends to stick for years.

If even one of these pilot programs converts into a full rollout, it could meaningfully move the needle on revenue and validate the product’s global potential.

Race Management & IP Monetization

Race-management services continue to provide stable recurring revenue. Revenue climbed about $135 K YoY, helped by the launch of new “All-in-One” tracking units that make client deployments easier.

Meanwhile, the company smartly monetized a non-core product: it sold its Wi-Fi / cellular heater-controller IP for US $70 K (C$96.8 K) in cash plus a US $25-per-unit royalty for the next 15 years. Only the cash portion was recognized in FY2025 — the royalties will be booked as received, meaning any future payments are pure upside.

Recurring communication and service fees now cover most fixed operating costs. That means additional hardware sales — which I estimate carry around 50% gross margins — add meaningfully to operating profit, since most overhead is already covered.

At today’s price of $0.26, the company trades around 3× sales, 6× EV/EBITDA, and 20× earnings, with nearly half of its market cap in cash. On a cash-adjusted basis, those multiples drop closer to ~1.6× sales, ~3× EV/EBITDA, and ~10× earnings, which highlights just how inexpensive the business really is once you back out the cash sitting on the balance sheet.

It’s not the “$1M EV” deep-value setup it looked like when shares were $0.17 (I used that older price in my first draft 😅), but it’s still inexpensive for a company this clean, profitable, and expanding globally.

Valuation:

I’m just playing with some numbers here to get a sense of what a fair value could look like today — these aren’t precise forecasts or targets, just rough scenario estimates to understand how the valuation might move under different assumptions.

Risks

Like any nano-cap, there are a few things to keep in mind. Revenue can be lumpy, and with three customers making up about 40% of sales, concentration risk is real — though that’s pretty normal for a company this size. The Water-TraX expansion in South America is promising but still in pilot stage, so execution will be key. Add in some FX exposure, U.S. tariffs, and low liquidity, and you’ve got the typical small-cap mix.

Still, with recurring revenue covering expenses, a solid cash cushion, and no debt, these risks feel manageable and largely priced in.

Outlook

Water-TraX’s international push could be the start of a new growth phase. Race-management stays steady, and the IP royalties offer free optional upside. With $3M in cash and consistent profitability, the company’s in a great position to grow organically — or to eventually attract a buyer.

At around $0.26, I think the market is underestimating just how solid this little business is. It’s not a deep-value hidden gem anymore, but it’s still a high-quality microcap that continues to execute — and I’m happy to keep holding it to see what happens.

FY25 and MD&A on Sedar:

https://www.sedarplus.ca/csa-party/viewInstance/view.html?id=0c11f8b7998bcd96412958d9fa4483120c8315dbdd910ad0&_timestamp=5129503661067854