Crexendo is a profitable cash-flow-positive cloud communications platform at a reasonable price, that may be crossing from being an ignored tiny telecom stock to an institutionally discovered growth stock with their cash funded acquisition strategy creating a high quality $100M+ recurring-revenue business.

At the current price, the market is still valuing CXDO like the pre-acquisition smaller company with single digit organic growth. While the new Crexendo has more scale, more contracted revenue visibility, a larger customer base, and a credible path to per-share value creation.

If management proves the recent large acquisition (ESI) was bought well and the combined platform creates growth, improves margins, and converts EBITDA into cash - the stock may get the “twin engines” of multi-bagger stocks with both earnings growth and valuation expansion.

Ticker: CXDO
Exchange: Nasdaq
Market Cap: approximately $217 million
Current Price Referenced: approximately $6.70
Shares Outstanding: 32.42 million
Cash: $7.2 million
Debt: effectively $0
2025 EPS: $0.17 basic / $0.16 diluted
Insider Ownership: approximately 40%

Crexendo, Inc. (NASDAQ:CXDO) announced it will hold its second quarter 2026 financial results conference call on August 4, 2026, at 4:30 PM ET. Jeff Korn, Chief Executive Officer, Doug Gaylor, President and Chief Operating Officer and Ron Vincent, Chief Financial Officer, will deliver prepared remarks and conduct a question-and-answer session.

Here is my recent video introducing Crexendo

And for paying subscribers, here is my longer deep dive with more research and opinion.

Read more

Instead I will give you this article - which will include several YouTube videos that have been reserved for my paying audience but I will make available here as an apology for my absence.

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The Tablelands of Gros Morne National Park in Newfoundland are one of the few places on Earth where rocks from the Earth’s mantle are exposed at the surface. Full of iron and magnesium the mantle is toxic to plants leaving the area devoid of most life.

Marble Mountain Ziplining over Steady Brook Falls, Newfoundland ⏬

As always the following is not financial advice. I treat these articles and videos as my own personal investing journal, and my goal is to create awareness and discussion in microcap stocks. My goal is NOT to encourage you to buy or sell a stock before doing your own research and forming your own convictions.

Before I get to the newer videos, here is some commentary on some recent releases.

Biosyent (TSXV: RX) is still one of my favorite stocks where every new stock I research gets compared to Biosyent. Is this new stock growing as quickly as Biosyent? Does it produce as much cash as Biosyent? How about that management team? Biosyent is profitable, growing, producing cash, high insider ownership, buybacks, dividends, and is growing 25% through a combination of organic and M&A growth. Since my video share price has only moved from C$14 to C$14.50 meaning valuation hasn’t exploded. The market always has a story, but stories are cheap. Cash flow, insider alignment, clean balance sheets, sensible acquisitions, and per-share value creation are much harder to fake. Long term I think Biosyent is hard to beat as it checks a lot of boxes for what I am looking for in a company and stock.

Crexendo (NSDQ: CXDO) is my American version of Biosyent, where I really like this company. Biosyent and Crexendo both recently completed large (shareholder friendly) acquisitions that will immediately add to the upcoming Q2 financials and will ensure positive momentum in earnings for 2026 and even into 2027. Crexendo sells NetSapiens which is the software platform telecom companies can build cloud communications on top of (saving them from having to build their own platform). This has been a profitable and growing business model for Crexendo, but their recent acquisition was for a company that is selling a cloud communication package built on Netsapiens. Meaning that Crexendo is now both the supplier and the marketer of cloud communications. Crexendo is effectively eliminating the middle-man and if this works out they could see higher margins moving forward than the market expects.

Since my video on Crexendo share price is only up 5% so the thesis remains unchanged. I think both Biosyent and Crexendo have positive catalysts in 2026 especially in their upcoming Q2 earnings.

Renoworks Software (TSXV: RW) is up 30% since my video was released on the Common Sense Investing discord. My argument for Renoworks was unless you believe AI is going to kill all small software stocks, then Renoworks is just too cheap. While some other software companies are trading between 4-8x ARR we had Renoworks sitting here between 2-3x and growing 36% while announcing 14 new clients over the past 6 months that should keep that high growth rolling through 2026. Now that share price is a little higher (C$0.285 in the video and C$0.375 today) we need to recalculate the ARR multiple, but if Renoworks keeps adding ~ 2 new clients per month like they have been - then long term the thesis remains unchanged.

Finally into the new videos 🔥

These videos are only available in this substack article for now, they will be released publicly after market close on Monday July 20th (Vitalhub) and then on Friday July 24th (Biorem).

Biorem (TSXV: BRM) isn’t an explosive stock, but it’s up 50% in two years with competent management aligned with shareholders and an industry sector with some momentum - that has value! What makes Biorem even more attractive is their valuation which is arguably one of the “cheapest” around. There are several other companies I like from BluMetric Environmental (water engineering) Atlas Engineered Products (Canadian housing) or Cematrix (cellular concrete) but none of these companies are quite at the low EV/EBITDA multiple that Biorem is at. If they can show some profitable growth moving forward then a nice re-rate could be in their future just to catch up to the valuation of their peers.

Vitalhub (TSX: VHI) shareholders desperately need a good Q2 earnings. In August of 2025 the share price of Vitalhub was crusing over $14 heading to $15. Then a combination of factors caused a share price crash down to $7 by April 2026 and it’s basically been stuck at this $7 level for the past three months. Despite the over 50% drop in share price in under a year, Vitalhub still isn’t arguably cheap sitting somewhere around 4.5x TTM ARR they need to continue to prove that “profitable high growth” is still possible despite the macro-challenges. Is that possible? Yes. Their organic growth has still been around 10-12% quarterly, and after filming this video they completed their first acquisition in almost six months. The question really becomes for Vitalhub whether the C$7 share price is the “bottom” and they can show a strong Q2 rebound, or whether the market just keeps selling.

Finally this is a “members only” livestream ⏫ I recorded recently on July 13th that gives a longer introduction to Vitalhub and an introduction to another interesting software roll-up company in the healthcare space …

CareCloud (NSDQ: CCLD) website link here https://carecloud.com/ where CareCloud was a distressed and messy stock with the company pumping cash from the business into the hands of preferred shareholders while their retail shareholder base got ignored. A new CEO has been brought in, the preferred shareholders have been (mostly) bought out, and CareCloud now looks to be a cash producing company at a distressed valuation multiple. High risk of course, but also high potential if they can execute.

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Conclusion

As always, microcap stocks come with significant execution “show me” risk. Biosyent and Crexendo need to prove that recent acquisitions can strengthen an already profitable growth engine. Renoworks needs to prove that its customer wins can keep turning into ARR growth. Biorem needs to show that cheap valuation plus competent execution can finally earn a better multiple. Vitalhub needs to prove that the selloff has gone too far and that profitable growth is still intact. CareCloud needs to prove that a distressed turnaround can become a real cash-flow story instead of just another value trap.

That is what makes microcap investing interesting. The opportunity is usually not obvious, clean, or comfortable. The work is in separating companies that are genuinely becoming more valuable per share from companies that only look cheap because the risks are real. Some of these names are higher quality. Some are higher risk. Some are still very much in “prove it” territory. But each one is worth studying because each one teaches us something about valuation, management, cash flow, dilution, and patience.

So while I am missing the regular Monday livestream this week, hopefully these videos give you plenty to work through. Enjoy the research, challenge the assumptions, and as always, use this as a starting point for your own due diligence — not a reason to blindly follow me into anything.

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Disclaimer: I own shares in Biosyent, Crexendo, Vitalhub, and CareCloud.

But each one also has a clear reason to be careful. That is usually the case in microcaps. As the market cap gets smaller and smaller most investors see higher potential for an easy 10-bagger, but the reality is usually the markets caps are usually smaller for a good reason that usually involves significantly more risk.

The five companies are:

• Kingstone Companies

• Cybeats Technologies

• Kidoz Inc.

• Intellicheck

• High Tide

• A surprise weird little “bonus” company…

Disclaimer: This article is for informational and educational purposes only and is not financial advice or a recommendation to buy, sell, or hold any security. This is just a short article introducing you to some companies that you may want to complete your own research on. The information may be incomplete or inaccurate and should be verified against company filings, financial statements, and your own due diligence before making any investment decision.

If you enjoy this article please consider becoming a paying subscriber for $80cad/$58usd annually (monthly options are available as well) and gain access to the discord and weekly members livestreams where I am constantly finding, researching, and discussing these stocks.

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Kingstone Companies (NSDQ: KINS)

• Market Cap: ~$235M

• Q1 FY2026 Net Premiums Earned: $55.9M

• Q1 FY2026 Net Premiums Earned Growth: +28.4%

• Q1 FY2026 Direct Premiums Written: $69.6M

• Q1 FY2026 Direct Premiums Written Growth: +19.6%

• Book Value Per Diluted Share: $7.70

• Debt: No holding company debt

Kingstone (KINS) is a small property and casualty insurance company focused primarily on homeowners insurance.

Are there any insurance companies in your microcap portfolio? Probably not.

Insurance is not usually the most exciting sector, but it can be a very good business when a competent and frugal management group runs a good operation where underwriting is disciplined, pricing is rational, and book value compounds over time. The problem is that small insurers can also look cheap right before large volume claims like weather events expose the weakness in the model.

That is what makes Kingstone interesting, but also why their share price dropped 20% on their Q1 earnings release. Bad weather events showed up in the numbers and the resulting share price drop left shareholders up only 7% in 12 months (and probably frustrated with those results).

Why it might be interesting?

The company is guiding for 15% to 20% direct premiums written growth, an underlying combined ratio of 74% to 76%, a catastrophe loss ratio of 7 to 10 points, and a diluted EPS of $2.20 to $2.90 with ROE of 24% to 30% for 2026.

If you don’t understand what that means, it’s fairly healthy guidance for a small insurance company especially after reporting a weak Q1. Which indicates that management believes Q1 was truly a temporary weather-event decline, and that the underlying business is still improving.

The really important detail is the reduced quota share. On the Q1 call, management said Kingstone reduced its quota share cession from 16% to 5% for the core New York business, which means it is retaining more economics from the policies it writes. That can improve earnings power if underwriting is good. It also increases retained risk if underwriting is not good. Management estimated the quota share reduction contributes about $0.20 of EPS for the full year, already embedded in guidance.

Kingstone is retaining more risk because management believes the book is better. If they are right, the earnings power could be materially higher than investors are giving them credit for.

If they are wrong, the same decision can magnify losses.

What would take KINS off my watch list?

Other than the reduced quota share I just told you about? ⏫

It’s my understanding the main opportunity for KINS is also their main risk. They have been entering the insurance space in geographically concentrated areas where the larger insurance companies have been exiting because they can’t make a good enough profit. KINS has the ability as a small more agile company to enter these abandoned markets, but there’s no guarantee they can consistently turn a profit. Right now they are heavily in the New York market and looking to expand to California and Connecticut.

So they currently have single market concentration risk, and as they expand, they also have execution risk into other higher risk challenging markets that the larger insurance companies have been leaving.

Investors are going to need a lot of trust in management to navigate this.

The question I would want answered

Mostly I want to hear a positive and confident sounding presentation from a management group that understands both the business and the insurance industry - inside and out. If I’m going to invest in a sector I’m not an expert in - I need to have more faith in management to tell me what the risks are, and how they are going to overcome them.

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Cybeats Technologies (CSE: CYBT - OTC: CYBCF)

The company operates in software supply chain cybersecurity, including Software Bill of Materials (SBOM) management. That is a real and increasingly relevant area. Companies need better visibility into software components, vulnerabilities, and supply chain risk - which is what SBOM management does.

The market opportunity is credible.

The company is still both early and unproven.

Why it might be interesting

The attraction is obvious: Cybeats is a tiny company with an important product in a market that should matter more over time. Regulated industries, enterprises, and software vendors all have reasons to care about software supply chain visibility.

I have looked, and cannot find another company doing what Cybeats does with SBOM until you get into ~$5B market cap companies where their SBOM business isn’t anything more than an afterthought. So with Cybeats you aren’t getting a moat, but you are getting a pure-play SBOM focused opportunity with no other distractions.

The company has also shown revenue improvement from a small base. Q1 2026 revenue was C$763,679, up 12% from Q1 2025. Cash expenses declined 15% year over year to C$1.62M, and net loss before non-cash expenses was C$857K.

Those are the (significant) positives as it’s hard to ignore a tiny company with a high demand product with long-term tailwinds. And despite the net loss, you have to respect that Cybeats was able to reduce expenses while growing revenue. That’s always worth a cheers 🍻

What would make me wrong

My largest concern is the current valuation already assumes meaningful improvement.

Cybeats has guided for C$5M ARR by the end of Q2, which would be a major improvement. But at a roughly C$35M–C$40M market cap, investors are still paying around 7x to 8x ARR depending on the days exact share price. For a company that is still subscale, burning cash, and sitting on just over C$1M of cash (and dropping) that is not obviously cheap.

That does not mean Cybeats is bad, just that expectations are high. Recently a very good company in Kneats.com was bought out by private equity at 8.5x ARR and that was considered a healthy premium.

Sometimes excited microcap investors push the share price a little higher than they should, based on future potential and “hopium”. When this happens and a stocks valuation is high, you are really paying for the future. A future which requires consistent improvement over time, and that’s sometimes a hard thing for tiny companies to deliver on.

Cybeats already moved from C$0.09 to C$0.225 this year for a 150% gain.

Now it’s down to C$0.17 for a C$36.7M market cap and a 90% gain.

So price is lower, but you’re also still paying C$36.7M for a company that just reported $763,000 in revenue, is low on cash, and is still burning cash.

Cybeats needs to show that growth can happen with improving cash efficiency. Otherwise, they will need another financing which would be great for interested accredited investors, but not so much for smaller retail investors.

The question I would want answered

Are you going to run out of cash and need another financing? That’s all.

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Kidoz Inc. (TSXV: KDOZ - OTCQB: KDOZF)

The company operates a privacy-first mobile advertising platform focused on reaching kids, teens, and family audiences in brand-safe mobile gaming environments. That is a specific niche, and it matters because digital advertising is moving away from personal-data tracking and toward more privacy-compliant, contextual advertising.

My major concern with the previous stock Cybeats Technologies is valuation.

I don’t like paying a premium valuation for an unproven company.

So I started looking around for the “next Cybeats”.

I was looking for another tiny company with a niche/moat in a growing sector with regulatory tailwinds, but a little less discovered/ expensive than Cybeats.

That led me directly to Kidoz!

But like Cybeats - Kidoz is still small, not fully proven, and Kidoz has the additional issue of being seasonally lumpy.

Why it might be interesting

Kidoz has exposure to a useful niche in digital advertising. Brands still want to reach younger audiences, but they need to do it in a way that is compliant with privacy rules and safe for their reputation. That gives Kidoz a clearer reason to exist than a lot of small adtech companies.

The company says its platform reaches more than 500 million monthly users across 40,000+ kid-safe games, with over 150 brand partnerships. That suggests Kidoz has built a real platform in a market where trust, compliance, and brand safety matter.

2025 was a real step forward with revenue of US$18.4M, up from US$14.0M in 2024, and net income of US$456,817. That is important because it shows the company has some growth and a profitable business model if they can continue to scale it.

But this is also where investors need to be careful.

Advertising businesses can be seasonal. Q4 is usually the strongest quarter, and one big quarter should not be blindly annualized.

The company still needs to prove that it can turn strong peak-season demand into more consistent full-year profitability and cash flow.

What would make me wrong

The biggest risk for Kidoz is the much broader weak adtech sector. 2025 has seen most adtech stocks get completely wrecked as advertisers pull-back spending in a weak economy, and that pull-back usually begins with their smaller less proven microcap companies. The following is an excerpt from “The Good, the Bad, and the Ugly (May 2026 Edition)” written by Mathieu Martin from Rivemont where basically the entire adtech sector is listed as “The Bad” 😢

The other concern I have is what these new changes mean to Kidoz. If you look anywhere on X these days you will find opposition to new bills being discussed in Europe, Canada, and potentially even the USA where the government wants to fully ban minors from social media. I didn’t think this was even possible as it’s quite ‘communist’ but apparently there is some support for this. I have no ideas what this would do to Kidoz’s business.

On the flip side, if this new push to ban minors from social media fails, would that be good for Kidoz as they would be the ‘backup’ option where if minors can’t be banned from social media, at least we can market to them responsibly.

I don’t know, and that’s a problem for me.

The question I would want answered

This isn’t a question, but I mostly just want to see if Kidoz can gain some attention from other investors. Yes, we should invest completely alone and not consider anyone else’s opinions - but I do want some social proof on Kidoz. I would gain some confidence if at least some other investors said that Kidoz looks interesting and is going on the watchlist.

My actual question, is I would like a better understanding about what the recent push to ban minors from social media could have on Kidoz. I would prefer honesty over promotional sounding language, and I think many investors have become very good at telling the difference between the two.

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Intellicheck (NASDAQ: IDN)

• Market Cap: ~$85M

• Q1 FY2026 Revenue: $5.5M

• Q1 FY2026 Revenue Growth: +13%

• Q1 FY2026 Gross Margin: 91.0%

• Q1 FY2026 Net Income: $636K

• Q1 FY2026 Adjusted EBITDA: $935K

• Q1 FY2026 Operating Cash Flow: $444K

• Cash: $10.1M

• Debt: None

Intellicheck might be the cleanest business model on this list.

I have to admit, I also almost didn’t cover it. I want to give a shout-out to Acorn Energy (NSDQ: ACFN) who was bumped from this list at the last minute by Intellicheck.

I didn’t want to cover Intellicheck because I believe their share price is being manipulated by social media influencers. If you look at the chart, they have rocketed up in price three times since 2025, and twice they have come crashing back down.

Recently the crashed down from a ridiculously high $9 share price to now $4, and given the strength of their business I feel like the company is good enough to make this list. But please keep in mind the insane volatility of this stock, both up and down.

I will try to ignore the share price, and focus on the company.

Intellicheck provides identity verification software that helps banks, retailers, fintechs, e-commerce companies, and other businesses detect fake IDs and prevent identity-based fraud. The basic pitch is simple: fraud starts with identity, and Intellicheck helps companies verify whether the person presenting an ID is real.

That is a real business problem, and Intellicheck claims to already have serviced almost half of North America so far, with plenty of room to grow still.

And unlike a lot of tiny SaaS companies, Intellicheck is not just talking about future operating leverage. It is starting to show up in the numbers.

The company reported Q1 2026 revenue of $5.5M, up 13% year over year, with SaaS revenue representing almost all revenue. Gross margin was 91.0%, net income was $636K, adjusted EBITDA was $935K, and the company ended the quarter with $10.1M of cash and no debt.

Profitable and growing with no debt, is a very good starting point compared to many other microcap software stocks.

Why it might be interesting

The reason Intellicheck is interesting is that it has the financial profile microcap investors are usually hoping to find before the stock gets too widely discovered.

High gross margin. Mostly SaaS revenue. No debt. Positive net income. Cash on the balance sheet. A real fraud-prevention use case.

This is not a company trying to convince investors that losses are “strategic investment.” It is already past that stage. In 2025, Intellicheck generated $22.7M of revenue, up 13%, with SaaS revenue of $22.4M and gross margin around 90%. The company also reported $1.27M of net income.

Then Q1 2026 improved again.

The other reason Intellicheck is interesting is that identity verification is not a discretionary nice-to-have product. Fraud is expensive, and businesses need better tools to stop fake IDs, account openings, synthetic identity fraud, and other identity-related losses. Intellicheck describes its platform as an omnichannel identity verification solution that works online, onsite, and on mobile devices, using authoritative North American barcode data to detect fake and altered IDs.

That is important because the product has a clear ROI argument with some tailwinds.

Intellicheck is doing what ever microcap company is trying to do, solve someone else’s problem, and do it profitably.

What would make me wrong

The main risk is that Intellicheck’s growth rate is still not high enough to deserve a big SaaS multiple. Revenue growth has been in the low-teens, not hypergrowth. At roughly an $85M market cap, investors are already paying around 3.7x 2025 revenue and a much higher multiple of current earnings.

That is not crazy for a profitable 90% gross-margin SaaS business.

But it is also not “deep value”.

For the stock to really work, Intellicheck needs to show that Q1 was not just a good quarter. It needs to show that revenue growth can stay at least in the low-to-mid teens while margins continue expanding and cash keeps stockpiling.

The second risk is customer concentration and sales-cycle timing.

Identity verification can be a great product category, but small software companies often depend on a small number of large customers or channel partners. One delayed rollout, one lost customer, or one slower enterprise sales cycle can make the quarterly numbers look weaker very quickly.

That is the part I would want to understand better. I see the potential of Intellicheck. But considering how volatile the share price has been, I want to understand the risk better, so I can more accurately determine what I think is a fair share price to buy.

The question I would want answered

I have only been researching this company for 1 months, so just about any information they give me will be appreciated. However I mostly want to understand their growth potential. When I see they are already services half the North American population, I want to understand what their total addressable market is, and how quickly they can capture it.

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High Tide (NASDAQ: HITI - TSXV: HITI)

• Market Cap: ~$200M

• Q1 FY2026 Revenue: C$178.3M

• Q1 FY2026 Revenue Growth: +25%

• Q1 FY2026 Gross Profit: C$44.4M

• Q1 FY2026 Adjusted EBITDA: C$11.5M

• Q1 FY2026 Free Cash Flow: C$2.9M

• Last Four Quarters Free Cash Flow: C$16.8M

Cannabis has been one of the most effective shareholder-capital destruction machines in public markets. Too many companies raised money, chased revenue, issued shares, talked about adjusted EBITDA, and never produced cash flow.

But High Tide has been different, and may be a way for investors to capture the immense upside in the (slow rolling) train of global cannabis legalization by buying a stock with almost no exposure to the risks of actually growing cannabis.

The company is a cannabis retailer, not a cultivation story. Retail is still hard, but it is a more understandable business model than trying to predict wholesale cannabis pricing, biomass oversupply, and cultivation economics.

Why it might be interesting

High Tide is often described as the “Costco of cannabis” because its Canna Cabana stores use a discount-club model instead of a traditional cannabis retail model. The idea is simple: offer cheap pricing for members and even cheaper pricing to paying subscription members. Build a large loyalty base, drive repeat traffic, and use scale to negotiate better purchasing economics.

Interestingly enough, if you listen to their previous investor conferences, they even target higher quality retail locations that are sometimes near Costco’s just because they want that higher quality traffic who are willing to travel some distance to obtain better more consistent quality. I don’t know why that amuses me so much.

High Tides business model is VERY different from the early cannabis retail playbook of opening stores anywhere with four walls and a door, with massive sales every day (despite being cash burning) to desperately hold onto cheap un-loyal customers.

High Tide’s Cabana Club is now a major part of the business. The company said Cabana Club had grown to 2.2 million members, with members representing over 90% of in-store sales across the Canna Cabana retail network. It also has a paid tier called ELITE, which had grown to 120,000 members. That matters because loyalty-driven retail can create a more defensible customer relationship than simply being another cannabis store on the corner.

The second reason High Tide is worth watching is Germany.

High Tide acquired a 51% stake in Remexian Pharma GmbH, giving it exposure to the German medical cannabis market. Remexian was already meaningful before High Tide bought in, with reported last-twelve-month revenue of €65M and 7 tonnes of cannabis flower sold in Q2 2025, representing about 16% of German quarterly import volume at the time of the announcement.

If you let yourself think a little bigger, Germany could become the bridge from Canadian cannabis retail (a mature and competent team of people growing the best cannabis in the world) into a larger European medical cannabis opportunity. Remexian is licensed to import from 19 countries, and High Tide has described it as having one of the broader sourcing footprints among German medical cannabis procurers.

Canada gives High Tide a proven operating base with cash flow.

Germany gives it a possible second growth leg.

Europe gives it optionality, if the medical cannabis markets continue to develop.

There is still some risk in all of this, but far less risk than I think most investors think about when they hear “cannabis stock”.

What would take HITI off my watch list?

The biggest risk is that free cash flow turns out to be less durable than it looks.

If High Tide keeps growing revenue but cash flow flattens or reverses, the thesis weakens. The whole reason to care about High Tide is owning one the first cannabis companies that can self-fund growth. Some added debt and dilution would still be OK for specific expansion opportunities such as a strategic acquisition that immediately improves the business (one just occurred as I was writing this article) But I think what attracted most shareholders to High Tide is probably the cash flow. Don’t fuck that up!

This already previously happened to me with High Tide. I was once a shareholder. I bought because I was impressed with their “Costco” business model in Canada. I sold when they became focused on the German expansion and their KPI’s in Canada started suffering. I felt like they lost focus. I am hoping they learn from their past mistakes.

The question I would want answered

I must admit I have a bias. I like companies that bring their CFO’s and COO’s to investor presentations and earnings calls.

High Tides CEO Raj is a passionate owner and entrepreneur and I respect that. I would also like to hear from other people within High Tide’s management group. As the business grows I am concerned Raj may be micromanaging a company that’s too large for one person to micromanage. I would like to understand how the company is structured for this international growth, and who is in charge of those operations.

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My Last Little “Weird Stock”

Perfect Corp is interesting. Headquartered in Taiwan, they operate an AI driven beauty site where you can experiment with different beauty products and techniques using a purely digital process. The ultimate try-it before you buy-it platform.

Nearly their entire market cap is in cash. And they currently have an active/ open offer to purchase the company at $1.95 per share. Roughly a 15% premium to me writing this article.

I wonder if they are trying to use PMC Vegas as a bargain chip to try and drive the acquisition offer price a little higher?

That is all.

To access the remainder of the list - where I think some real hidden gems are hiding - and to join my discord where we have active discussions and research on microcap stocks every single day … please consider becoming a paying subscriber.

In this article I am a shareholder of High Tide (TSXV: HITI) Kidoz Inc (TSXV: KDOZ) and Perfect Corp (NYSE: PERF). I receive no monetary compensation from any of these companies or anyone affiliated with these companies. The opinions are my own.

If you are currently a paying subscriber of SubStack and you have NOT joined the discord yet. Please send me an email at commonsenseinvestingman@gmail.com and I can send you a direct link to join.

commonsenseinvestingman@gmail.com

Link to my top 5 stocks for Planet Microcap Vegas article here.

This article is the next layer down the research funnel.

These are not necessarily my “best five” remaining ideas. They are five more companies I want to understand better in Vegas because each one has something interesting going on: profitability, operating leverage, turnaround potential, misunderstood growth, or a possible inflection point.

As always, this is not financial advice. This article is for informational and educational purposes only. These are short introductions, not full research reports. Microcaps are risky, illiquid, and often humbling. Verify everything against filings, financial statements, and your own due diligence.

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Jerash Holdings (NASDAQ: JRSH)

• Market Cap: ~$44M

• Q3 FY2026 Revenue: $41.8M, +18% YoY

• Q3 FY2026 Gross Margin: ~17%

• Q3 FY2026 Net Income: ~$1.2M

• 9M FY2026 Revenue: $123.4M, +6% YoY

• 9M FY2026 Gross Profit: $19.4M, +14% YoY

• 9M FY2026 Net Income: $2.0M vs. loss of $0.7M last year

• Q4 FY2026 Revenue Outlook: +23% to +26% YoY

Jerash manufactures custom sportswear and outerwear for major global apparel customers. This is not a glamorous business. It is apparel manufacturing: low-margin, customer-driven, working-capital intensive, and exposed to freight, tariffs, labor, customer concentration, and geopolitical perception. That is also why it is interesting, most of the macroeconomic factors right now are tailwinds for Jerash.

I explain this more in the following video:

A one-hour deep introduction to Jerash Holdings (NSDQ: JRSH) on YouTube.

Macroeconomic momentum seems to be gaining for Jerash. Trump and the trade war has created chaos for clothing manufacturers as countries have been threatened with higher tariffs, in some cases high enough to be considered a trading ban. Companies have been looking for stable and safe places to diversify their manufacturing.

Most of these companies are diversifying away from Asia, and unfortunately for Trump they probably won’t be expanding into the very expensive US labor market. Jordan has a cheap stable labor force, low tariffs, a business friendly government, and really isn’t an important enough country for anyone to threaten or intentionally harm. If I were a large clothing company I wouldn’t bet 100% of my business on Jerash, but it does offer some attractive low-risk diversity.

This momentum can be seen in the nine-month numbers. Q1 was weak with negative growth of 3%. Which then recovered in Q2 with 4% growth. Meaning Jerash was basically flat with no growth for the first half of the year.

However, the promised ramp-up showed up in Q3 with 18% growth, and guidance for Q4 is even more impressive at 23-26%. Jerash could potentially move from ~0% growth in H1 to ~20% growth in H2. And that should be enough to get investors a little more interested in what 2027 could look like.

Potential Rewards: Momentum looks good for Jerash to achieve the “twin engines” of a potential share price increase - earnings growth and multiple expansion.

Earnings growth: 18% growth in Q3 and management has guided Q4 revenue to increase 23% to 26% year-over-year, with a gross margin target of 14% to 16%. If the company delivers even the low end of that revenue growth while keeping margins stable, FY2026 should show clear operating progress with recent investments in capacity. Creating an attractive setup for even more growth momentum in 2027.

Multiple Expansion: I am hoping for some multiple expansion through discovery from microcap investors recognizing their current momentum.

• Jerash has been reducing their risk as customer diversification is improving: VF Corporation was still 57% of nine-month sales, but that was down from 67% last year, while New Balance, Acushnet, Hansoll, and other customers contributed more meaningfully.

• As an apparent show of confidence in their profitabl growth, Jerash has implemented a regular quarterly dividend of US$0.05 per share or around 6% annually at the current share price.

The reward case is that Jerash may be moving from a low-margin, lumpy apparel manufacturer into a more diversified, higher-utilization manufacturing platform. If they can produce $185M revenue in 2027 with ~15% EBITDA margins that should command more than their current $44M market cap.

Potential Risks: This is still a low-margin apparel manufacturer, so small margin changes can have an outsized impact on earnings. Right now I am somewhat concerned that shipping and insurance costs through the Red Sea may be impacting either margins or demand, and considering my “bull case” relies on margin expansion - this needs to be monitored closely.

Customer concentration also remains real. VF Corporation alone represented 57% of nine-month sales, and the U.S. represented 85% of revenue. Tariffs are another variable: U.S. tariffs on imports from Jordan had moved to 15%, and while customers typically pay the tariff, demand can still be affected by Jordan’s relative tariff position versus other sourcing countries.

⁉️ Question for Planet MicroCap: If Q4 revenue grows 23% to 26%, how much of that growth should convert into operating income and cash flow, and what is the realistic normalized gross margin for the business?

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Paying subscribers ⏫ receive access to the Common Sense Investing discord with daily research and discussion on microcap stocks and weekly member livestreams.

Usio (NASDAQ: USIO)

• Market Cap: ~$42M

• Q1 FY2026 Revenue: $25.5M

• Q1 FY2026 Revenue Growth: +16%

• Q1 FY2026 Adjusted EBITDA: $0.8M

• Cash: $7.7M

• Debt: Minimal

Usio is a small payments company providing ACH, card, prepaid, output solutions, and embedded payment capabilities. In laymen’s terms it’s a payment company and here is their website for more clarification.

Payments companies can be attractive when they scale because processing volume can grow faster than fixed costs. Basically when things go well, they can go very well with exponential increases to profits and cash.

They can also be frustrating when gross margin is thin and management always promises improving margins that never consistently show up.

Q1 2026 was one of Usio’s cleaner quarters. Revenue increased 16% to $25.5M, total payment dollars processed increased 28%, transactions processed increased 22%, operating income turned positive at $0.2M, adjusted EBITDA was $0.8M, and cash increased to $7.7M even after share repurchases. When a payments processor has a quarter like USIO’s Q1 it’s at least worth putting on the watchlist and asking some questions.

Potential Rewards: The potential reward is operating leverage. If Usio can grow payment volume and revenue without bloating SG&A, the earnings profile can improve quickly from a low base. The company also repurchased shares, which is rare for a tiny payments company and suggests at least some capital allocation awareness.

Potential Risks: Gross margin fell to 20.2% from 21.9%, and prepaid card services revenue declined. Adjusted EBITDA is positive, but still modest. This is not yet a high-margin fintech compounder. It is a small, high risk, improving payments business that showed one quarter of improvement but still needs to prove durable cash generation.

⁉️ Question for Planet MicroCap:

Fool me once - shame on you.

Fool me twice - shame on me.

I have never been a shareholder of USIO before, but I know other people who have, and have been disappointed in the past with guidance that was missed. I think the question for USIO management is how are they going to convince people this time is different?

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SANUWAVE Health (NASDAQ: SNWV)

• Market Cap: ~$127M

• Q1 FY2026 Revenue: $9.6M

• Q1 FY2026 Revenue Growth: +3.1%

• Q1 FY2026 Gross Margin: 77.3%

• Q1 FY2026 Operating Loss: $1.1M

• Cash: ~$10.8M

SANUWAVE is a medical device company focused on advanced wound care, including its UltraMIST system. This is the type of company that can get interesting if recurring consumable revenue grows, gross margins stay high, and the installed base expands.

However it’s also down a whopping 68% from 52-week highs, a massive loss for any shareholders still holding. So why the hell is Sanuwave in this article?

Sanuwave didn’t fall apart because of poor execution. The bigger issue was major changes to the wound-care market. New reimbursement pressure around skin-substitute products made providers more cautious, and that hesitation bled into the broader advanced wound-care ecosystem. Sanuwave was not the direct target, but it still sells into that same market, so customers slowed down, and deals were delayed.

The interesting thing for me, is these changes didn’t stop Sanuwave’s growth, it just slowed them down - and brought share price down to more reasonable levels. I was never a shareholder of Sanuwave because I thought $45 was crazy high, and I thought $35 was very high, and then I thought $25 was still too high.

As people changed their future growth models on Sanuwave from 35% growth down to just 15% growth, it also crashed the share price down to under $15. Now I’m wondering if Sanuwave isn’t “too cheap to ignore”.

If recurring consumables grow, gross margins stay high, and the installed base expands then Sanuwave still looks like a high quality business, just with less explosive growth than the market expected.

Potential Rewards: The core Sanuwave business hasn’t changed despite the macro-challenges. It has the kind of high gross margin profile investors like to see, and a recurring consumable revenue that can produce very high quality earnings as it scales. The company also operates in a large and important wound-care market where better outcomes can matter economically. There is still some risk here, especially since share price has been a falling knife for 11 months now (ouch!) but I have to admit as share price continues to drop Sanuwave actually looks more appealing to me, not less.

Potential Risks: The weak Q1 earnings is a problem. When share price has been dropping for 11 months straight, weak earnings and “trust me bro - the future will be better” isn’t exactly the inflection point desperate shareholders were hoping for.

The argument of “high gross margin” also falls apart when operating expenses grow faster than revenue.

Reimbursement dynamics, sales execution, reseller pricing, and clinical adoption all need watching. Unfortunately Sanuwave is now a closely monitored execution story and not a clearly improving winner.

Still good enough to make this list though.

⁉️ Question for Planet MicroCap: What is the clearest leading indicator that the macro-changes have been absorbed, and Sanuwave is going to start recovering?

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Paragon Advanced Labs (TSXV: PALS)

• Market Cap: ~C$79M

• Q1 FY2026 Revenue: ~C$2.2M

• FY2025 Revenue: C$4.37M for nine-month period

• Business: Mining assay and analytical lab services

Paragon Advanced Labs is one of the more unusual names on this list. The company provides analytical technologies and lab services to the mining industry, including PhotonAssay technology. That means Paragon is not a miner. It is a picks-and-shovels style lab infrastructure business serving the mining and exploration ecosystem.

The story is early but interesting. Volatile and risky, and has recently faced two major challenges pushing its share price down.

ONE - Paragon completed its RTO and began trading on the TSXV in December 2025. It has grown its PhotonAssay footprint to three machines across Hamilton, Surrey, and Sparks, and it is expanding sample prep and geochemical capacity. FY2025 revenue was C$4.37M for the nine-month period, and Q1 FY2026 revenue was expected to increase meaningfully from the prior quarter as a major client relationship ramped. That didn’t really happen. Q1 showed growth, but less than the market expected with delays being the focus of earnings and making shareholders worry they modeled the growth too aggressively.

TWO - In addition, Paragon’s CEO has also come under some critical questioning, as during his career and gaining experience for this CEO position, he was on the board of a couple companies that didn’t perform very well. One actually went bankrupt. This is the type of thing that gets classified as a “nothing burger” when your company is executing and shareholders are happy. However, when delays are causing higher than expected losses and potentially higher future dilution - that’s when all the skeleton’s in the closet get dug up and re-autopsied.

Potential Rewards: If Paragon becomes a real lab network with high utilization, recurring customer demand, and better margins as capacity fills, the upside could be meaningful. Mining assay bottlenecks are real, and faster analysis can matter for exploration teams. This is the kind of niche infrastructure story that can be overlooked early. Winning should create more winning with Paragon, as they will continue to receive capital from large investors to grow quickly.

Potential Risks: They don’t appear to be winning yet. After gaining some attention from investors as a potential long-term winning company, share price ran from C$1.60 all the way up to C$4.50 but with the delays and additional scrutiny suddenly share price has dropped to C$2.30 and worried shareholders. Paragon is still very early. Revenue is small, losses are material, and the company needs capital, utilization, and execution. Capacity expansion sounds great, but idle capacity is expensive. Investors need to see improvement soon or people will start talking about “just another failed RTO”.

For more information on Paragon I will direct you to this free article on substack from Sergio Heiber ⏫ LINK HERE

⁉️ Question for Planet MicroCap: Show me exactly what you believe has been “execution wins” for Paragon that should give me conviction to hold through downturns?

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Cannara Biotech (TSX: LOVE)

• Market Cap: ~C$159M

• Shares Outstanding: ~98.8M

• H1 FY2026 Revenue: C$57.3M

• H1 FY2026 Adjusted EBITDA: C$14.9M

• H1 FY2026 Operating Cash Flow: C$10.9M

• H1 FY2026 Free Cash Flow: C$1.5M

Cannara has a very simple business as a Canadian licensed cannabis producer operating mostly in Quebec capturing approximately 14% of the Quebec market and expanding nationally across Canada where they have approximately 4% of the legal cannabis market.

The problem is not many people care. Cannabis has been the most hated investment sector in recent memory. The cannabis hype was huge, and when the bottom fell out investors either lost money, or watched as other people lost.

However here we are in 2026. The market doesn’t realize the best cannabis companies have clearly risen to the top, and that is because the best (most profitable) cannabis companies are all in the microcap space. If you just ignore the whole “cannabis stock” issue you will find a simple business that is capturing market share by producing and selling a profitable and recession proof product more efficiently than their larger competition.

Potential Rewards: There are basically two potential drivers of future returns for Cannara. One is company specific, and the other is industry specific.

If Cannara can keep expanding market share while maintaining gross margin and converting EBITDA into cash, the stock could not only eventually earn a better multiple than the average cannabis ticker, but also eventually (long term) earn a better multiple as the headwinds against the cannabis sector start turning.

When will cannabis headwinds switch to tailwinds? I have no idea. That’s why if you are looking at the cannabis space I think it’s smart to look for cleaner financial operators that can survive a bad market without having to dilute shareholders just to pay the bills. Cannara has been one of those cleaner operators.

So I am watching for company specific execution. They are investing heavily in capacity, and if returns on that capital are actually attractive then it will be a huge boost for Cannara and “trust” in the management team. On the macro level I keep wondering how long before the USA legalizes cannabis.

Potential Risks: This is still cannabis. Regulatory risk, pricing pressure, excise taxes, category competition, and there is still risk invested capital doesn’t produce returns. You can see the risk in share price lately. Earnings and cashflow have been a positive for Cannara, but Q2 earnings was a “miss” and share price has been trickling down. The key question is whether expansion capex like the current Valleyfield investments creates per-share value or just makes the company larger.

Here is their weaker Q2:

• Q2 FY2026 Revenue: C$27.2M (Down 9.6% from Q1)

• Q2 FY2026 Adjusted EBITDA: C$6.0M (Down 31.8% from Q1)

• Q2 FY2026 Operating Cash Flow: C$2.9M (Down 63.8% from Q1)

• Q2 FY2026 Free Cash Flow: negative C$0.3M (Down $3M)

⁉️ Question for Planet MicroCap: What return on invested capital should shareholders expect from the Valleyfield expansion, and when should that investment clearly show up in free cash flow per share?

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Final Thoughts

The common thread across these five companies is simple: each has something worth watching to make this list, but none are perfect setups that deserve blind trust.

Cannara needs to prove cannabis cash flow can survive expansion. Jerash needs to navigate tariff and shipping concerns. Usio needs consistent operating leverage instead of one or two good quarters. Sanuwave needs recurring revenue to outrun expenses. Paragon needs to somehow build trust and conviction despite having no real history.

Pick your poison! Recently I was talking about investing strategies and unfortunately it’s hard to find the perfect company and stock. Believe it or not, there aren’t many A+ companies out there with a cheap share price. Investing involves compromise, and figuring out what risk you are willing to take, because the upside potential is high enough.

That is what makes Planet MicroCap useful. The goal is not to collect management stories. The goal is to ask uncomfortable questions and find out which risks may be overshadowed by quality and potential.

Below is my full list for paying members ⬇️ who get access to the discord where I am finding, researching, and discussing microcap stocks every day.

If you are currently a paying subscriber of SubStack and you have NOT joined the discord yet. Please send me an email at commonsenseinvestingman@gmail.com and I can send you a direct link to join.

commonsenseinvestingman@gmail.com

In the following free article I highlight five interesting companies at the top of my list for Vegas, and give a quick introduction to get you started in your research.

First though, I want to make sure we are all on the same page as to why Planet MicroCap is such an important event for investors, and what I am personally looking for from presenting companies.

Let’s get started.

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Why is Planet MicroCap Important?

The biggest single reason is Cash. Cash is king, especially in microcap stocks 💵

The investors travelling to Vegas are not doing it for the hotel coffee or the highly inflated beer prices. They are coming from around the world actively looking for companies to add to their portfolios, and many of them have been saving up cash just for this event.

I do it myself.

I know many of these companies have perfected their pitch. I know I’m going to see many impressive presentations that (despite all my restraint) will highly encourage me to FOMO buy the stock. I intentionally keep some cash free because I know I’m going to impulsively buy something. Now yes I do have rules (I only allow myself to buy 2 starter positions) but this is immediate volume to a microcap stock, and a new shareholder.

Other investors are more prudent, and may go home to complete more research before buying. But even if their research takes a couple weeks - it’s still a new shareholder and more volume for a small microcap company.

That matters because many microcap stocks are extremely illiquid. Some trade only a few thousand dollars per day. When concentrated microcap investors gather in one place, the amount of potential capital in the room can be meaningful relative to the daily trading volume of these companies.

Planet MicroCap said there are 531 investors registered and I wonder if they don’t end up with 550 investors (or more). If every one of these investors has $10,000 to spend on stocks (and I know many people will have far more cash saved up) that’s $5.5M of cash to spend on tiny microcap stocks. Many of these stocks average ~$20,000 worth of shares traded daily.

A small company converting even just a handful of serious investors into shareholders can make a real difference.

I will be watching share price and volume around the event, not because one or two days of trading proves anything, but because volume can sometimes tell you which companies have impressed investors the most.

Last year in 2025 Planet MicroCap Vegas was held in April, and I believe it started a bull market for microcap stocks that lasted into the summer.

Better shareholders

Day traders are not flying to Vegas to sit in meetings with management teams.

The investors attending Planet Microcap are usually the type of investors every good microcap company wants: patient, fundamental, long-term oriented, and willing to reward good execution over time.

These investors are not just looking for a quick trade. They are looking for companies they can follow, support, and possibly buy more of if the business continues to improve.

That matters in microcaps. Better shareholders can help stabilize the shareholder base, reduce volatility, and support the stock during periods when the company is executing but the broader market is not paying attention.

Companies get the shareholders they deserve.

Access to capital

Support comes in many forms.

Sometimes support means open-market buying. Sometimes it means helping a company get noticed. Sometimes it means accredited investors are willing to participate in a financing if the company needs capital for growth, acquisitions, or balance-sheet repair.

That is especially important for companies pursuing active M&A strategies.

A good microcap company does not just need a good business. It often needs the right people around it.

Attention

Attention matters.

I know that sounds uncomfortable because nobody wants to admit that investor attention can matter as much as financial results in the short term. But in microcap stocks attention can be reflected in share price.

Attention can come from social media. It can come from investor write-ups. It can come from meetings with institutions. It can come from one respected investor telling five other respected investors, “You should look at this.”

For some nanocaps and small microcaps, simply getting on the right watchlists can change the future investor base. A company can release good news, but if nobody is watching, the market may ignore it. Planet Microcap helps put companies in front of people who actually care.

Low quality companies usually pay for inorganic attention from social media pumpers.

For good companies, Planet MicroCap is an opportunity to get some attention organically through hard work and execution.

Conclusion

Planet Microcap brings together some of the best microcap investors in the world. A good small company converting even a handful of those investors into shareholders can make a meaningful difference to its success as a publicly traded company.

That does not mean every stock attending deserves to go up. Most do not.

But the event gives good companies a chance to stand in front of serious investors and prove they deserve more attention.

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What Investors are Looking For

We can debate this list. Maybe you disagree with one or two points. That is fine.

This is the core criteria I use when ranking companies attending Planet Microcap. These are the traits I believe investors will be looking for when deciding whether a presenting company is worth buying, researching further, or ignoring completely.

Good management - A Believable Pitch

Microcap investors love numbers, but nobody flies to Vegas just to read financial statements in a hotel room.

The purpose of an in-person event is to judge the people.

Investors want to match the numbers with the management team. They want to look management in the eye and ask hard questions. They want to know whether the CEO understands the business, whether the CFO understands cash flow, and whether the company is being realistic or promotional.

At Planet Microcap, the qualitative matters.

Good management should be competent, confident, honest, and specific. They should understand their numbers. They should not dodge obvious questions. They should be able to explain capital allocation clearly.

A great business with weak management becomes average quickly.

An average business with disciplined management can sometimes surprise you.

Good company - Preferably Growing and Profitable

Every microcap investor’s dream is simple:

Find a consistently growing profitable company, with a strong management team, a bright future, and a “cheap” share price.

That is the dream. It is also rarer than you would think.

This is the quantitative side of investing, and it is usually my number one reason to buy shares of a company. Revenue growth, improving margins, high quality earnings, operating cash flow, balance sheet strength, and no dilution.

At Planet Microcap, I still care deeply about the numbers.

But because this is an in-person event, I temporarily give slightly more weight to the management team and the story they tell. A company that is not quite profitable yet can still earn investor attention if management can explain why profitability is close, what needs to happen, and how they plan to get there without destroying shareholders through dilution.

Still, the numbers have to matter.

A good investor deck cannot hide bad cash flow forever.

Reasonable valuation - Good Risk vs Reward

This is where some people will disagree with me.

There are companies that may be interesting but will not make it into my portfolio simply because the valuation already prices in too much success. I am not interested in paying a premium multiple for an unproven business priced for perfect execution, when there are already high-quality companies trading at reasonable valuations.

In microcaps, the downside is extreme. These companies are tiny. A single bad quarter can break a thesis. A bad acquisition can destroy years of progress.

Risk versus reward matters. Valuation has to leave room for mistakes and lumpiness.

Now don’t get me wrong - I am willing to pay a fair price for a good company. I am just not willing to overpay for extremely bullish potential, or what I typically call “Hopium”.

“Secret” Knowledge - Inflection Points & Management Emphasis

This is the wildcard of Planet Microcap, and it is a major reason why 1-on-1 meeting request are at 3,100 and growing. That’s an average of 6 personal company meetings per registered investor.

Management teams are not allowed to disclose material non-public information. They know that. Investors know that.

But management can still emphasize things that are easy to miss in filings. They can explain priorities. They can clarify timelines. They can discuss what they are focused on. They can help investors understand whether a business is closer to an inflection point than the market realizes.

Sometimes a line buried in the MD&A becomes far more important after hearing management explain it in person.

Maybe growth is accelerating. Maybe margins are about to improve. Maybe an acquisition is going better than expected. Maybe a customer relationship is more durable than investors realized. Maybe the market is misunderstanding the business model.

Forming an opinion based on the best information available is why private meetings matter.

Social proof (we don’t want to admit it, but it matters)

We all like to pretend we sit alone for weeks, reading filings from A to Z, ignoring the world while drinking coffee and finding the perfect stock before anyone else.

And yes, sometimes that happens.

But let’s be honest: it feels good to buy a stock and later hear a few respected investors say, “I own that too.”

That does not mean we should blindly follow anyone. We should not. Social proof is dangerous if it replaces research.

But in microcaps, good investors often find the same good companies. That matters. When smart, patient, fundamentally focused investors start talking about the same business, I pay attention.

Planet Microcap is a social event as much as an investing event. Have conversations. Share opinions. Challenge each other. Ask what others are seeing that you might have missed.

There are plenty of other days to sit alone with your spreadsheets.

Per-Share Value Creation

Growth is not enough.

A company can grow revenue, EBITDA, and market cap while shareholders still lose because the share count explodes, debt increases, margins deteriorate, or cash flow never shows up.

The question I think more microcap investors should ask is

Are shareholders becoming better off per share?

Microcap investors are used to companies talking about growth.

The better companies will explain how that growth creates durable per-share value.

Conclusion

I think an event like Planet Microcap is a beautiful competition. Everyone wants to have fun, network, learn, and share ideas. We also want to find the best companies before anyone else and make money. I hope everyone manages to do a little bit of both.

Below is the list of 25 interesting stocks for Planet MicroCap Vegas 2026 for my paying subscribers (with daily discussion in the discord) ⬇️

Obviously this is not financial advice, it’s just a list.

If you are currently a paying subscriber of Substack and you have NOT joined the discord yet, please send me an email at commonsenseinvestingman@gmail.com and I can send you a direct link to join.

commonsenseinvestingman@gmail.com

I release my research to discord in real time, and by around March I had my top 20 picks roughed in, and since May 1st three of my top five picks are already up 30%+

Today (for free) I will release a short description of my top five companies attending Planet MicroCap Vegas.

To obtain the remaining 20 stocks on my top 25 list (where some interesting companies can still be found) please consider becoming a paid subscriber. It’s only around C$80 annually or after currency conversion $10 USD (damn this Canadian-peso). OK it’s probably closer to $58 USD.

Disclaimer: This article is for informational and educational purposes only and is not financial advice or a recommendation to buy, sell, or hold any security. This is just a short article introducing you to some companies that you may want to complete your own research on. The information may be incomplete or inaccurate and should be verified against company filings, financial statements, and your own due diligence before making any investment decision.

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Pro-Dex (NSDQ: PDEX)

• Market Cap: $216.8M

• Shares Outstanding: ~3.20M basic / 3.30M diluted

• Cash: $10.0M

• Debt: $18.5M notes payable

• 2025 EPS: $2.73 basic / ~$2.67 diluted

• Insider Ownership: ~36% but needs verification

Pro-Dex designs and manufactures powered surgical and medical device systems, with meaningful orthopedic device concentration. This is not another typical med-tech platform story stock with big promises and poor execution. PDEX has a history of profitable growth as a proven precision manufacturing business tied heavily to specific customer programs (yes that does mean customer concentration).

Potential Rewards: PDEX has been a winning stock since October 2025 and that momentum might continue with more investor discovery in Vegas. The company has real profitability, cash generation, and a shrinking share count. Rare for a microcap stock! They also have huge optionality with the potential of being the future supplier of robotic arms for one of the largest robotic surgery companies in the world in Zimmer Biomet (NYSE: ZBH). And as a sweetener they recently made an intelligent looking acquisition in APM that helps me believe management are making good decisions. Basically PDEX for the past 7 months has been the perfect stock. An improving core business, a competent looking management group, a potentially massive future TAM in robotics, and a share price that just keeps going up.

Potential Risks: Two major risks. Customer concentration is the headline risk: one customer represented 79% of nine-month sales! This customer has signed a contract extension to December 31, 2028 which includes minimum purchase volumes for calendar years 2026 and 2027. That reduces the temporary risk, but it has to be considered when calculating both valuation and your position sizing. Secondly, it’s my understanding that PDEX has right-of-refusal for supplying robotics arms for Zimmer Biomet, but they still need to meet certain pricing and production metrics. This means that while there is good chance they land this future contract, it’s not quite the 100% slam-dunk that some people on social media might imply.

⁉️ Question(s) for Planet MicroCap: I would want some clarification around the contract terms and conditions around the potential future Monogram/ Zimmer Biomet contracts.

Crexendo (NSDQ: CXDO)

• Market Cap: $314.7M

• Shares Outstanding: 32.42M

• Cash: $7.2M

• Debt: Effectively $0

• 2025 EPS: $0.17 basic / $0.16 diluted

• Insider Ownership: ~36% owned by Steven Mihaylo alone

Crexendo provides cloud communications, UCaaS, contact center, and software platform services. That’s a fairly vague description - I really suggest some website research on this one.

Potential Rewards: The revenue base is scaling, and the company is profitable on a GAAP basis, which separates it from many software microcap stocks. Service revenue grew, software revenue grew, and the company still has a large insider ownership base. If integrations are clean and customer churn stays controlled, Crexendo could earn a higher-quality recurring revenue multiple. My investing style typically prefers companies that are growing and profitable on a tight share structure with insider ownership and good capital allocation (somewhat of a modified CANSLIM model). Crexendo checks almost every box on my “things I need from a stock” list.

Potential Risks: The model has recurring-revenue characteristics, but the acquisition layer matters because purchased growth can make organic quality harder to read. Recently cash dropped sharply due to an acquisition, and there is significant execution risk involved with each acquisition. They purchased Estech Systems / ESI Hosted Services on March 1, 2026 for about $34.7 million total consideration which is a VERY large 10% of their entire market cap. Most of the purchase price was allocated to intangible assets, mainly customer relationships and trade names. Crexendo said those intangibles were preliminarily valued at $23.4M but this is more of a “trust me bro” situation as it’s not easy for investors to confirm this value. Therefore, the risk here might be how much you trust management to make continued high quality acquisitions with transparent discussion into what went right (or wrong).

⁉️ Question(s) for Planet MicroCap: Because I feel like trust in management is a huge risk vs reward debate for Crexendo - I don’t have any specific questions for them. I have a more general concern about managements plans for the company, and how I should evaluate this acquisition (and future acquisitions).

My research that placed Crexendo in the #2 spot was done in March-April at a share price of $6-7 and after hitting a $10 share price today I would need management to try and convince me why I should pay this higher price? Share price may be too high compared to some other opportunities.

Paysign (NSDQ: PAYS)

• Market Cap: $419.8M

• Shares Outstanding: 55.17M basic / 61.02M diluted

• Cash: $20.55M unrestricted

• Debt: $0 bank debt

• 2025 EPS: $0.13 diluted

• Insider Ownership: ~48.8%

Paysign operates payment programs, with major exposure to pharma patient affordability and plasma donor payment programs. The business is a payments processor, but the quality depends heavily on program growth, customer retention, and regulatory/compliance execution.

Potential Rewards: Q1 2026 revenue grew 50.8% to $28.0 million, with pharma revenue becoming the major growth driver. Gross margin improved to 65%, which suggests mix is moving in the right direction. If pharma programs keep scaling, this could become a higher-quality earnings story rather than just a low-margin payments processor. Earnings like this make Paysign a potentially perfect example of my favorite images on YouTube where revenue growth + margin growth + multiple expansion = happy shareholders.

Potential Risks: Payments businesses can look clean until program concentration, compliance cost, or customer churn shows up. Restricted cash also makes the balance sheet more complicated than the simple net-cash suggests. The key thing to verify is whether EBITDA and net income are converting into cash after growth investments and program funding needs.

⁉️ Question(s) for Planet MicroCap: Pharma patient affordability is now the major growth driver. How concentrated is that revenue by program or custoer, and what evidence should investors watch to know this growth is durable rather than a temporary program ramp?

M-Tron Industries (NYSE: MPTI)

• Market Cap: $310.4M

• Shares Outstanding: 3.50M basic / 3.57M diluted

• Cash: $52.0M

• Debt: $0 disclosed notes payable

• 2025 EPS: $2.62 diluted

• Insider Ownership: ~6.9%

M-tron designs and manufactures highly engineered electronic components for aerospace, defense, avionics, and space applications. This is a real niche industrial business with secular defense demand behind it.

Potential Rewards: This is one of the cleaner operating companies on the list. Q1 revenue rose 15.3%, gross margin improved to 44.9%, diluted EPS rose to $0.67, and backlog increased 38.4% YoY to $76.8 million. The company was looking so strong they issued a rights offering at $59 per share,, which materially strengthened the balance sheet, giving the company more flexibility/ options. Basically this is a high quality cash-rich microcap company in one of the hottest industry sectors of 2026. That’s hard to ignore!

Potential Risks: The stock has already been discovered to some extent. In fact, I thought the rights offering at $59 would put a drag on share price and I could buy it for cheap, but instead all the happy new shareholders have been saying good things about MTron and share price has continued rocketing up to $90. However, with great power comes great responsibility 😉 and with discovery and a higher share price shareholders may now demand sustained execution. Any earnings weakness could cause a sustained drop. Where this weakness could happen is on a per-share metric due to the rights offering, which gave them a bunch of cash - but also dilution. So M-Tron does have execution risk to show the rights offering cash can be put to good use and increase per share value despite the dilution. That can be a tough thing to accomplish.

⁉️ Question(s) for Planet MicroCap: Easy to pick a couple questions for M-Tron. What are the highest-return uses of that cash, and how does management want investors to measure whether the capital deployed improves value per share?

BioSyent (TSXV: RX)

• Market Cap: ~C$160.7M

• Shares Outstanding: 11.44M latest company-reported

• Cash: C$14.2M

• Debt: C$4.0M short-term debt

• 2025 EPS: C$0.80 basic / C$0.783 diluted

• Insider Ownership: ~9.8% individual insiders; ~19.3% if including private-company insider/control blocks

BioSyent markets specialty pharmaceutical and oral health products in Canada and internationally. The model is asset-light relative to drug developers: acquire or license products, then commercialize them through established channels.

Potential Rewards: Saving the best for last? 😉 BioSyent was a hugely popular microcap stock 10 years ago, and since then somehow they have fallen off investors watchlists. This is still one of the higher-quality Canadian microcaps (and the first Canadian company to make the list) because it has a long record of profitability with double digit sales growth and significant cash production. The only reason they have $14M cash and a newly acquired $4M of debt is because they recently completed huge acquisition (Oral Science) for a total of $25.5M where they paid $22.5M in cash! 🤯 That’s incredible! The acquisition gives the company a new diversified growth pillar that I don’t believe the market fully appreciates yet. While you are considering all of this, don’t forget they also pay a dividend and love buying back their own shares.

Steady sustained growth (especially since 2023) with a declining share count 🚀

Potential Risks: Pretty simple risk vs reward profile here in my opinion. The main risk is acquisition quality. The cash balance fell materially because of the Oral Science deal and the company is talking about top line growth, but I think the market is waiting to see what quality Oral Science can produce in EBITDA and more importantly cash. I expect that if Oral Science can show strong cash production then Biosyent re-rates to a higher price, but that’s an educated guess right now, not a fact.

⁉️ Question(s) for Planet MicroCap: With Oral Science now added to the platform, what return-on-capital target should shareholders use to judge whether the acquisition was successful, and when should the deal start contributing meaningfully to EPS and free cash flow per share?

In reality the question for each company on this list should probably be

To access the remainder of the list - where I think some real hidden gems are hiding - and to join my discord where we have active discussions and research on microcap stocks every single day … please consider becoming a paying subscriber.

If you are currently a paying subscriber of SubStack and you have NOT joined the discord yet. Please send me an email at commonsenseinvestingman@gmail.com and I can send you a direct link to join.

commonsenseinvestingman@gmail.com

When the microcap market hits a bear market and the tide is moving out quickly - there’s no point swimming against that tide. Market momentum is a huge factor in microcap stocks.

So I have been waiting for some potential catalysts that could signal a return to a bull market, and there are some catalysts coming:

• Slow “lumpy” de-escalation of the Iran war.

• Potentially improved Q1 for many companies both YoY and QoQ.

• Hopefully improved 2026 visibility and raising early conservative guidance.

• Planet MicroCap Vegas June 16th 2026 with hundreds of eager cash-heavy investors.

In 2025 Planet Microcap Vegas started a bull run in microcap stocks that lasted until October. I feel like this year Planet MicroCap is more important than previous years. Microcaps have been in a 6 month bear market. Investors have lost money, and I think they are holding significantly more cash than usual.

Investors are tired of the losses, see the opportunity for a rebound, and are eager to find some good companies to deploy that stack of cash to make gains in the second half of 2026.

So in the background, for my paying audience, I have been supplemented my AI powered stock research with my own human opinion - and introducing some potentially good companies for Planet Microcap Vegas in one-hour long deep introductions. Recently I released some of these videos for free on YouTube.

Pro-Dex (NSDQ: PDEX) is a small medical device and precision manufacturing company that has significant upside in a partnership with a large company aggressively pursuing medical robotics technologies (that may go fully commercial in 2027). So the core PDEX business has been improving, and if the company can keep expanding margins and produce more consistent cash flow - then PDEX could become a much better core business over time. But the real opportunity here may be getting into a massively growing sector niche using a sneaky partnership play in an undiscovered little microcap stock.

EnWave (TSXV: ENW) has IP protected drying technology used in food, cannabis, pharma, and other markets. They claim it’s significantly better than any existing legacy drying technology in the market - increasing quality while decreasing expenses and drying time. The story is interesting because EnWave’s current revenue comes from selling their drying units, but the real long-term opportunity is the “sticky” high margin royalties if more customers buy and use their units. The key question is whether EnWave can hit that inflection point where the recurring royalty business can self-fund the manufacturing growth… which then results in more royalties. If that can occur then EnWave looks like a consistently repeatable growth machine, but it isn’t there yet.

If you’re interested, I also introduced Caldwell Partners (TSX: CWL) in this video here, but they are not attending Planet Microcap Vegas. Caldwell is an interesting company that some people would call boring, but sometimes boring can be successful. A growing consolidator of executive position hiring consultants. If your company needs a new CEO, CFO or board member - you hire Caldwell. They pay a noticable dividend and may also offer some growth in 2026.

The New Research System

I have been working on my new AI-integrated research system.

The goal is not to let AI pick stocks. That would be stupid.

The goal is to use AI to speed up the boring parts of research so I can spend more time thinking. I love it !

Members of my discord now get the following on the stocks I’m researching:

• AI buy side reports (to introduce the company).

• AI Earnings preview reports (to remind investors what to watch for in upcoming earnings).

• AI earnings report cards (to judge earnings quality).

• A spreadsheet tracking all this information to help track key KPI’s and whether a company is trending to improvement or declining.

I talk more about this in this article here ⬇️ and introduce my AI’s top ten picks.

Seriously, this is NOT financial advice.

I mean it. None of this is financial advice—I say it all the time, and I genuinely mean it. I don’t know you. I don’t know your experience level, risk tolerance, debt situation, or anything else about your financial position.

So please - don’t buy, sell, or hold a stock just because of my opinion in this article.

I have been wrong plenty of times, and I strongly encourage everyone to invest within their own capabilities and consult a financial advisor if needed.

Owning a stock can create bias so please be aware of this. At the time of writing this article my microcap portfolio has the following positions on stocks discussed in this article: Pro-Dex (NSDQ: PDEX) 1% starter position. Caldwell Partners (TSX: CWL) 2% starter position. EnWave (TSXV: ENW) 0% no position.

I was not paid (or compensated in any way) for this article from any companies I discussed, or anyone affiliated with the companies discussed in this article.

Thank you! 🙏

I screen.
I read filings.
I listen to conference calls.
I dig through investor decks.
I check balance sheets.
I look for weird share structures, ugly dilution, customer concentration, insider ownership, improving margins, hidden cash flow, and whether management is actually saying anything useful.

This year, I expect to spend roughly two months and probably 50 hours researching companies before the event. The most valuable product/ service I provide to my subscribers is my time.

But is my time becoming less valuable?

There are now over 125 companies attending PMC Vegas 2026 and when I tasked my AI to do the same research as me, it gave me a list of the top ten stocks in about 180 seconds.

50 hours of work over two months - verses 3 minutes of AI time. Who will win?

The actual goal for me isn’t to beat AI, but to improve my AI prompts. I want to find weaknesses in my AI prompts and continuously improve them until I have the best AI prompts in the microcap space. Maj has some of the best advice on this topic …

Like Maj, I believe the best microcap investors for the next decade will be the investors with the best strategy - improved and accelerated by learning how AI can support their strategy.

Human Research

If you enjoy this article, and want to continue doing actual human research - please consider joining Common Sense Investing. By becoming a paying member for only C$80/ year ($58.50 USD) you get access to an active discord of microcap stock investors talking stocks, and the daily research I am providing - both using my AI prompts and giving my human opinion. Here is an excerpt/ example of my daily recap.

The AI’s Top 10 Stock Picks for Planet MicroCap

1. Pro-Dex

The AI’s top pick wan understand why. Fiscal 2025 sales rose 24% to $66.6 million, gross margin improved to 29% from 27%, and operating income increased 49% to $10.7 million.

That checks a lot of boxes.

Revenue growth? Yes.
Margin expansion? Yes.
Real operating income? Yes.
Actual profitability? Yes.

The big issue is customer concentration. One customer represented 75% of 2025 sales, and the top three customers represented 94%. That is not a small risk. That is “one bad phone call could ruin your quarter” risk.

Still, the numbers are strong enough that I understand why AI put it at the top. This is exactly the type of profitable, growing microcap that can be easy to overlook because it does not come wrapped in hype.

2. NCS Multistage

The second AI pick was NCS Multistage, which is one of the cleaner operating stories on the list. In 2025, adjusted EBITDA rose 20% to $26.7 million, free cash flow after minority distributions reached $18.9 million, and year-end cash was $36.7 million. That is the kind of EBITDA-to-cash-flow conversion I like to see.

Now this is the first sign of deviation between AI and human research that I am working on improving. NCS had a great year and shareholders have been rewarded with a 168% share price gain, but I personally don’t have NCS in my top 10 list. The company has guided for minimal growth in 2026, and in my human opinion for the share price to continue rising you have to hope the company is sandbagging that guidance and beats expectations. I don’t like investing on hope.

So the AI has flagged a company with a very successful fiscal 2025, but can that success continue in 2026 ? We shall see.

3. PaySign

The AI’s third pick was PaySign, which had a strong 2025. Fourth quarter revenue rose 45.8% to $22.76 million, full-year net income nearly doubled to $7.55 million, adjusted EBITDA more than doubled to $19.94 million, and the company ended the year with $21.07 million of unrestricted cash and zero debt.

That is a solid setup.

I would still haircut the adjusted EBITDA somewhat because stock-based compensation was $4.26 million in 2025. That is not the end of the world, but it matters. Adjusted EBITDA is useful, but sometimes companies adjust so much that shareholders are left wondering if the only thing not adjusted is reality.

Even with that caveat, PaySign looks like a profitable, cash-backed grower rather than a pure hope-and-hype stock, and I am enjoying my deeper research on them.

4. BioSyent

BioSyent was one of the more “Common Sense Investing” names on the AI list, and proof the AI isnt biased against TSX venture listed stocks 😂 This is not a hyper-growth technology story. It is more of a quiet compounder. The company reported 2025 revenue growth of 23% while maintaining a 21% NIAT margin. Revenue was C$43.1 million, and pre-tax income was C$12.0 million.

That is real growth with real earnings.

I tend to like these types of businesses because they are not always obvious. They do not usually attract the same attention as artificial intelligence, robotics, biotech moonshots, or whatever sector is currently being promoted.

But boring and profitable can work, I am personally watching the share price to see if it drops down to a more attractive level.

5. Armanino Foods

The AI’s fifth pick was Armanino Foods, another high-quality, boring-but-good type of company that is already well know to MCC investors through Ian Cassel. The company delivered record 2025 results, with full-year net sales up 9.7%, operating income up 31%, EPS up 31%, and free cash flow of $13.1 million.

It also returned capital through dividends and buybacks. Earlier in 2025, it had no reported debt and $24.6 million of cash at September 30. Hard not to like that.

This is not the kind of company that is likely to make someone scream “10-bagger” five minutes after opening the investor deck - but it is profitable, cash-generative, and shareholder-friendly.

Those are not bad qualities. In fact, in microcap land, those qualities are rarer than they should be.

6. TAT Technologies

TAT Technologies is a little larger than some pure microcaps, but the operating profile is strong enough that I understand why AI included it. In 2025, revenue grew 17% to $178.0 million, net income rose 50.6% to $16.8 million, adjusted EBITDA rose 36.7% to $25.5 million, and operating cash flow swung to positive $15.0 million from negative $5.8 million.

The backlog plus long-term agreements rose to about $550 million, up from $429 million entering 2025. That is an important detail.

This is the type of name where I would want to understand customer concentration, margin sustainability, and how much of that backlog converts into actual free cash flow. Good looking company though.

7. OptimumBank

Among the financial companies on the list, OptimumBank stood out to the AI because of its growth and credit metrics. Net loans reached $947.3 million at year-end 2025, up $152.3 million during the year. Nonperforming loans were only about 0.3% of gross loans. Net income increased to $16.6 million in 2025 from $13.1 million in 2024.

That is impressive growth, and I may even end up with OPHC on my top ten list.

The part I do not love is the loan-to-deposit ratio at 103%. That does not automatically make it a bad bank, but it does mean this is not a no-risk setup. Banks always look safe until they suddenly do not. The numbers here look controlled, but I would want to spend more time on deposit quality, funding costs, loan types, and whether growth is being pushed too hard.

Fast-growing banks can look brilliant right up until the moment they look reckless, and this is a fast growing bank in a hot Florida market.

8. NewtekOne

NewtekOne is less straightforward than OptimumBank, but the numbers are moving in the right direction. In Q2 2025, total revenue rose 15% year over year to $70.2 million, pre-tax income rose 27% to about $18.8 million, and tangible book value per share reached $10.55, up 21.5% year over year.

For my style, the rising book value and earnings matter.

That said, NewtekOne is not a simple business. I would need to spend more time understanding the quality of earnings, the banking model, the risk profile, and whether the market is correctly valuing the company relative to its actual return on equity and balance sheet risks.

AI can flag the name quickly. It cannot fully replace the boring but necessary work of understanding what the company actually owns, earns, and risks.

9. High Tide

I normally discount cannabis names heavily, but HITI isn’t really a cannabis stock - it’s a retail stock that sells cannabis. Important distinction in my opinion.

The company reported 2025 results and remained free-cash-flow positive for the year with about C$12 million of free cash flow, and then followed that with Q1 2026 revenue up 25% year over year to C$178.3 million. Free cash flow improved to C$2.9 million from negative C$1.9 million. That is real progress.

The caution is that Q4 2025 GAAP net income was messy because of impairment and derivative fair-value noise. So this one still needs more trust-building than the names above it.

Shareholders are disappointed that share price isn’t higher. The company is (stupidly) opening an investigation into share price manipulation. But if you zoom out on the chart, you will see higher lows and higher highs since 2023.

10. Backblaze

The final AI pick was Backblaze, which it described as the only “turning the corner” software name it would put in the top 10. Full-year 2025 revenue rose 14% to $145.8 million, B2 cloud storage grew 26%, gross margin reached 61%, operating cash flow rose to $23.5 million, and adjusted free cash flow improved to negative $5.4 million from negative $20.1 million.

That is a improvement.

But it is not yet truly free-cash-flow positive for the full year, which is why it was ranked below the cleaner profitable names, and brings up the question: is the company genuinely inflecting toward profitable growth, or is it just “less unprofitable” than before?

There is a big difference. Less bad is not the same thing as good. But less bad can become good if the trend continues.

What the AI Got Right

The AI did not just throw out a list of random promotional microcaps. That is what makes this list interesting.

It seemed to understand that I generally prefer companies with:

Revenue growth.
Margin expansion.
Positive earnings.
Improving free cash flow.
Cash-rich balance sheets.
Some evidence that the business is actually getting better.

That is a good starting point.

A lot of stock screens fail because they focus too much on one metric. Revenue growth alone is not enough. Adjusted EBITDA alone is not enough. A cheap valuation alone is not enough. The best setups usually involve a combination of improving fundamentals and reasonable valuation, with some kind of catalyst that could make more investors notice.

The AI list captured part of that.

What the AI Cannot Do Well Enough Yet

Here is where I still think the human process has an edge.

AI does not truly know what it feels like to sit through 50 microcap presentations and realize that half the CEOs are basically saying the same thing with different fonts.

It also does not always understand the softer but important questions:
Does management overpromise and underdeliver?
Is the improvement durable, and for how long?
Is the balance sheet clean, or is dilution hiding around the corner?
Has share price exceeded business value?

That is where human judgment still matters.

At least for now.

The machine is fast, but speed is not the same as insight.

My Challenge for Planet MicroCap Vegas 2026

I am going to do my normal research process heading into Planet MicroCap Vegas 2026. I will spend the time.

Then I will compare my final list against this AI-generated top 10.

The AI list took less than 3 minutes.

My list will probably take 50 hours.

That means I need to beat it by enough to justify the work.

No pressure.

Seriously, this is NOT financial advice.

I mean it. None of this is financial advice—I say it all the time, and I genuinely mean it. I don’t know you. I don’t know your experience level, risk tolerance, debt situation, or anything else about your financial position.

So please - don’t buy, sell, or hold a stock just because of my opinion in this article.

I have been wrong plenty of times, and I strongly encourage everyone to invest within their own capabilities and consult a financial advisor if needed.

Owning a stock can create bias so please be aware of this. At the time of writing this article my microcap portfolio has the following positions on stocks discussed in this article: High Tide (TSXV: HITI) and Pro-Dex (PDEX)

I was not paid (or compensated in any way) for this article from any companies I discussed, or anyone affiliated with the companies discussed in this article.

Thank you! 🙏

Quick Article Summary

• Kidoz unaudited recent Q4 2025 press release was objectively strong. Q4 revenue hit a record $9.60M USD, up 29% YoY and 162% sequentially versus Q3, with quarter-end cash rising to $4.45M USD and quarterly free cash flow of $2.68M USD.

• The key tension is earnings quality. The company produced excellent cash in Q4, but Q1–Q3 2025 had still been loss-making and cash consumptive, so the full-year picture improved sharply only because Q4 was such a strong quarter.

• Kidoz looks more credible today than it did a year ago because 2024 already showed a return to profitability and positive operating cash flow, and Q4 2025 suggests management’s “scale-up” narrative may be real.

• This is still a microcap adtech name with customer concentration, campaign lumpiness, and heavy dependence on a few large quarters. The thesis is investable, but durability is not yet fully proven.

I am cautiously bullish as the company appears to be improving. However I’m not confident enough yet to move past a tiny starter position and moving Kidoz higher up my watchlist.

Why I Took a Deeper Look

The press release for Q4 is showing me that Kidoz is becoming more interesting as the business is finally showing the combination investors want: accelerating revenue, operating leverage, real cash generation, no obvious balance-sheet stress, and meaningful industry tailwinds tied to privacy-first advertising. My judgment is the thesis is improving meaningfully, but still needs more consistent confirmation.

What the Company Does

Kidoz operates an adtech platform for mobile gaming. It was built around kids-safe and privacy-compliant advertising, and management says the platform now also serves teens and adults across the broader mobile gaming ecosystem using contextual targeting rather than personal identifiers. The technology stack is described as combining direct SDK integrations, Kidoz Privacy Shield, and the Kite IQ contextual AI engine.

Economically, the company derives substantially all of its revenue from adtech advertising, while content revenue is less than 10% of total revenue. Revenue is generally recognized at a point in time, with many arrangements governed by insertion orders that are typically short term in nature. That matters because it means this is not a classic SaaS recurring-revenue model, even if management increasingly frames the business as platform-like.

Why the Story Matters

The story matters because Kidoz sits at the intersection of three attractive themes: privacy regulation, mobile gaming ad spend, and contextual targeting. Management’s argument is that as identity-based targeting gets weaker and youth protections tighten, a compliant contextual ad stack becomes more valuable. That narrative is plausible, and recent company materials consistently emphasize those tailwinds.

What makes the name newly relevant is that the narrative is starting to show up in results. FY2024 returned to profitability and positive operating cash flow. Then Q4 2025 delivered the highest quarterly revenue in company history with strong free cash flow. That is the first time Kidoz has looked like a potentially self-funding microcap growth story rather than just a concept with regulatory tailwinds.

My quick <10 minute introduction on YouTube

Company Snapshot

C$34M market cap

131.3M shares outstanding

C$6.23M cash (according to recent press release)

No real debt.

Giving KDOZ an Enterprise Value of ~C$27.91M.

The unaudited Q4 press release for earnings 👇

Assuming Kidoz Q4 2025 unaudited release reflects actual final audited results, FY2025 revenue was approximately C$25.76M and full-year pre-tax profit was about C$0.60M, using the CAD/USD ratio implied by the company’s Q4 release. With the company’s 131.3M share count, that implies an EPS of roughly C$0.0046/share on a pre-tax basis. Full-year EBITDA and operating cash flow were not fully disclosed, though operating cash likely ended positive at roughly C$2.38M if Q4 free cash flow is treated as a close proxy for Q4 operating cash flow.

Valuation:

Trying to provide a valuation on earnings is impossible right now as their profitability isn’t consistent enough. Based on a C$34.129M market cap and C$27.91M EV 👇

• P/ S = 1.33x

• EV/ S = 1.08x

• P/ OpCash = 14.34x

• EV/ OpCash = 11.73x

More bullish Kidoz shareholders would probably disagree with me, but I think share price is fairly valued given the risk. It’s not priced for growth like it should be, but it’s also hard for me to value it higher based on one good quarter per year. However, I will admit that if Kidoz can start reporting more consistently profitable quarters, I suspect this valuation would look “cheap” in hindsight.

NOTE: You have to be a bit careful when researching Kidoz, as they report in USD currency however their primary ticker is KDOZ.V which is CAD currency. I am Canadian so I tend to convert everything to CAD when doing my calculations, but feel free to use the US ticker KDOZF on the OTCQB if that’s easier for you.

Balance Sheet Risk & Financing Pressure

Kidoz reported $2.78M cash at Dec. 31, 2024, $1.79M at Sept. 30, 2025, and then $4.45M at Dec. 31, 2025 in the unaudited Q4 release. FY2024 and Q3 2025 filings did not show financial debt. Working capital also improved to $5.13M at Dec. 31, 2025 from $4.22M at Dec. 31, 2024.

This is a fairly large (arguably unrecognized) de-risking moment for Kidoz. Financing pressure has clearly eased because the company now appears capable of funding operations internally if Q4-like performance repeats even at a lower level. The risk, though, is that 9M 2025 still consumed operating cash, so this is not yet a “never needs capital” story. It is a “probably does not need capital near term unless growth investments re-accelerate faster than monetization” story.

Dilution pressure has been limited in actual issued shares, which stayed flat at about 131.3M through Sept. 30, 2025. That is a real positive. However, compensation overhang exists: the company granted 1.056M options to current directors and officers in 2024 and 913,333 options to current directors and officers during 9M 2025, and it sought approval for an Equity Awards Plan covering up to 13.13M shares, equal to 10% of shares outstanding as of April 1, 2025.

It’s improvement - an improving balance sheet has my attention combined with a cleaner (still far from perfect) share structure.

Latest Earnings Review

The unaudited Q4 2025 press release was strong on the metrics management chose to disclose. Revenue reached $9.60M, up 29% from Q4 2024 and up 162% from Q3 2025. Pre-tax profit was $1.79M, versus $2.02M in Q4 2024 and a pre-tax loss of $(0.18)M in Q3 2025. Cash ended the year at $4.45M, with quarterly free cash flow of $2.68M.

The nuance matters. Pre-tax profit was down YoY despite much higher revenue, which suggests the company deliberately spent more into sales and R&D. Sales and marketing was $564K, up 13% YoY and 66% sequentially; non-capitalized R&D was $1.32M, up 25% YoY and 8% sequentially. That means Q4 was not a “milk the margins” quarter. It was a “grow fast while still producing strong profit and cash” quarter, which is actually a healthier signal.

The limitation is disclosure. The release does not provide a full income statement, balance sheet, or cash flow statement, and it does not disclose net income, gross margin, or EBITDA/adjusted EBITDA for Q4 or FY2025. So the quarter looks very good, but investors are still relying on a management-selected unaudited summary until full audited numbers arrive.

Unequivocally, the quarter showed improvement. Revenue, pre-tax profit, cash balance, working capital, and free cash flow all improved sharply relative to Q3 2025, and revenue also improved materially versus Q4 2024.

The stronger claim is whether the business as a whole has improved, not just the quarter. On that question, the answer is still yes, but with less certainty. FY2024 already showed a turn to profitability and positive operating cash flow. 9M 2025 showed topline acceleration but still losses. Q4 2025 then delivered a very large catch-up quarter. That pattern is consistent with a real step-up, but also with a lumpy ad campaign cycle.

Management Quality

Insider Ownership

Using 2024 audited earnings (because 2025 isn’t out yet) insider ownership is around 18.75% on a current shares outstanding basis (24,620,052 / 131,304,499) or around 20.31% on a fully diluted basis (28,776,302 / (131,304,499 + 10,359,750). 20% ownership is (in my opinion) enough “skin the game” but everyone has their personal preference on this.

Management Commentary Check

Management’s commentary in the Q4 release says the company invested heavily in infrastructure, AI capabilities, and team expansion during 2025, and that the expanded foundation should support faster growth and operating leverage. The disclosed numbers broadly support that statement. R&D, sales, and headcount investment all increased, yet Q4 still delivered strong revenue and cash generation.

That said, management is still promotional in tone. Phrases about defining standards in a large and rapidly developing market and benefiting from structural industry shifts are directionally plausible, but investors should remember that the hard proof is still only one major breakout quarter plus a profitable FY2024. The numbers do not yet prove multi-year durability.

Management Credibility Track Record

Management credibility has improved. In the 2025 circular, management leaned hard into 2024 as an inflection year, stressed profitability, cash generation, platform leverage, and strategic investments to support larger volumes. Through Q3 2025, the story was only partly confirmed because revenue rose but losses remained. Then Q4 2025 produced the kind of quarter that does validate the “scale-up” framing.

I would not call credibility perfect. Management has historically highlighted adjusted metrics and strategic potential, and the business still has lumpiness and concentration risk. But relative to many microcaps, Kidoz has one important credibility marker: it has not blown out the share count to finance the story, and 2024’s cash flow/profitability improvement was real rather than purely adjusted.

Starting to Form a Final Opinion

Key Positives

Kidoz’s biggest positive is obvious: Q4 2025 was a real breakout quarter with record revenue and strong free cash flow.

Second, the company already demonstrated in FY2024 that it could turn revenue into GAAP net income and operating cash flow, with adjusted EBITDA also moving positive. That reduces the chance Q4 2025 was built on a structurally broken foundation.

Third, dilution has been restrained at the common-share level. For a microcap adtech company, holding basic shares flat while building the business is a meaningful plus.

Fourth, the setup is helped by privacy-first adtech positioning and a niche where regulatory compliance can be a competitive advantage rather than only a cost burden.

Key Concerns

The first concern is durability. One outstanding Q4 does not eliminate the fact that the first nine months of 2025 still showed a net loss and cash burn.

The second concern is revenue concentration and contract visibility. The company disclosed that two customers each represented more than 10% of FY2024 revenue, and the business model relies heavily on short-term insertion-order-driven advertising arrangements.

Third, management continues to issue equity incentives. While issued share count has been stable, option and awards capacity is meaningful, and that could become a larger dilution issue if the stock performs well or if compensation becomes more aggressive.

Fourth, disclosure quality around the Q4 release is incomplete because investors still do not have the full audited FY2025 statements.

Inflection Point Assessment

I view Kidoz as at an inflection point, but not beyond it.

FY2024 was the first leg: modest growth, return to profitability, positive operating cash flow. Q4 2025 may be the second leg: evidence that the company can hit much higher revenue levels while still generating substantial cash.

The company crosses from “story stock” to “real operating story” only if the next few quarters show that at least part of Q4’s gain is sticky. Right now, the evidence is strong enough to say inflection is happening, but not strong enough to say inflection is complete.

What I Am Watching Closely

Catalysts & Timeline

Over the next 6–18 months, the most important catalyst is the release of full FY2025 audited financials, because investors need the complete bridge from 9M losses to full-year results, including net income, full cash flow, and any EBITDA/adjusted EBITDA disclosure.

Second, the next two quarterly reports matter more than usual. If revenue remains materially above the 2024 run-rate and cash stays positive, the market will likely treat Q4 2025 as a real base reset rather than a one-off spike.

Third, evidence of more direct brand relationships and broader non-kids monetization would strengthen the quality-of-revenue argument. Management has emphasized both themes repeatedly.

The Bear Case & Thesis Breaking Risk

The bear case is straightforward: Q4 2025 was a campaign-heavy outlier, not a new normal. If revenue snaps back toward the pre-Q4 trend and margins/cash flow fade again, the current “inflection” narrative will look premature.

Another thesis-breaker would be deterioration in customer concentration or receivables quality. Kidoz already has a small number of meaningful customers, so losing one can move the whole P&L.

A third risk is that management’s heavy R&D and go-to-market spend continues, but revenue growth proves more episodic than durable. In that scenario, the company could return to the pattern of “positive adjusted framing, weak consistent cash compounding.”

The Financials

The first thing to watch is gross margin and net income in the full FY2025 audited results, because the Q4 release did not disclose them. That will tell investors how much of the quarter’s success dropped through economically.

Second, watch operating cash flow excluding working-capital noise. FY2024 looked solid, 9M 2025 did not, and Q4 was excellent. That bridge needs to become smoother.

Third, watch customer concentration and direct-brand mix. A stronger direct business and less concentration would improve revenue quality materially.

Fourth, watch share-based compensation and equity awards usage. Stable share count has been a plus; investors should want that discipline to continue.

Microcap Investment Quality Scorecard

Business Model Quality: 6.5/10. Real niche differentiation and platform attributes, but ad campaign lumpiness keeps it below premium quality.

Revenue Growth Quality: 6.0/10. Growth is now strong, but concentration and short-duration campaign structure reduce confidence in repeatability.

Margin Profile: 6.5/10. FY2024 gross margin was strong, and Q4 2025 suggests operating leverage, but the company has not yet shown stable multi-quarter profitability at the new scale.

Balance Sheet Strength: 7.5/10. No obvious debt stress, better cash, better working capital, self-funding increasingly plausible.

Dilution Risk: 6.5/10. Actual common-share dilution has been low, but option/equity-award overhang is real.

Management Credibility: 7.0/10. More credible after FY2024 and Q4 2025, but still needs a longer proof set.

Catalysts & Strategic Positioning: 7.5/10. Good tailwinds and clear near-term catalyst path through audited results and follow-on quarters.

Valuation vs Opportunity: 7.5/10. Not obviously expensive relative to the improving story, especially if Q4 represents a true run-rate shift.

Final Conclusion !

Kidoz looks materially better than it did a year ago. FY2024 gave investors proof of life on GAAP profitability and operating cash flow. The unaudited Q4 2025 press release then added proof of scale. That combination deserves attention.

My conclusion is Kidoz has probably crossed into the “worthy of serious follow-up work” category. The stock can work if the next two quarters confirm that the revenue base has permanently stepped up and that cash conversion remains healthy. If that confirmation arrives, the current valuation can look cheap. If it does not, the name could easily fall back into the bucket of volatile microcap adtech stories with one standout quarter and limited durability.

Sources

Primary materials reviewed:

1. Kidoz Inc. unaudited Q4 2025 press release, Feb. 26, 2026.

2. Kidoz Inc. Form 20-F for FY2024, filed Apr. 24, 2025.

3. Kidoz Inc. Q3 2025 unaudited interim financial statements, filed Nov. 20, 2025.

4. Kidoz Inc. 2025 Management Information Circular, dated Oct. 7, 2025.

5. Kidoz investor presentation / fact-sheet materials for 2025.

6. Supplemental market-data references from Yahoo Finance and TMX for recent share price / market cap context.

   ---

Seriously, this is NOT financial advice.

I mean it. None of this is financial advice—I say it all the time, and I genuinely mean it. I don’t know you. I don’t know your experience level, risk tolerance, debt situation, or anything else about your financial position.

So please - don’t buy, sell, or hold a stock just because of my opinion in this article.

I have been wrong plenty of times, and I strongly encourage everyone to invest within their own capabilities and consult a financial advisor if needed.

Owning a stock can create bias so please be aware of this. At the time of writing this article my microcap portfolio has the following positions on stocks discussed in this article: Kidoz Inc (TSXV: KDOZ) an approximate 0.5% position in my microcap portfolio. What I consider a small starter position, where 1% is a starter position and 5% is a full position.

I was not paid (or compensated in any way) for this article from any companies I discussed, or anyone affiliated with the companies discussed in this article.

Thank you! 🙏

I see investors on social media mocking AI and saying it’s garbage. That AI simply can’t replicate an experienced human investor and real human analysis.

I disagree.

I am now fully convinced that most investors simply don’t know how to use AI, how to write effective prompts, how to train an AI to fact check it’s own inaccuracies, and are probably mostly just resistant to change.

Humans have bias. Confirmation bias. Recency bias. Overconfidence bias. Anchoring bias. Herd bias. A human author may unintentionally due to bias focus only on the positives, and ignore all the negatives.

All these issues are gone with AI.

Will AI occasionally make errors? Sure. So do humans. That’s why you have to obviously read and fact check what AI produces to ensure the best quality product, the same as you should when reading human produced content. But can AI provide 100% more research in 10% of the time? Yes. Why would you not take advantage of that?

The main complaint I have received from people using my AI prompts?

It does a poor job of being overly bullish.

I wrote my AI prompts to be skeptical and factual. The most common ‘complaint’ is “the AI didn’t factor in enough forward growth”. The AI prompts I have built do not consider the complete 100% execution of {insert speculative product or service here} … like a human does when we get overly excited about a stock and start ignoring more conservative estimates.

Is this a weakness or a strength? I consider being overly conservative a strength.

Anyway. I’ll just shut up and let you read for yourself. Here is an AI generated buy-side report for Propel Holdings (TSX: PRL) including a “Mock Investing Strategy” on point #23. I have been producing ~5-10 of these reports per week on my discord which can be accessed by paid subscribers of this Substack.

And of course none of this is financial advice, or a solicitation to buy, sell or hold Propel Holding stock. There is a full disclaimer at the bottom of the article.

Subscribe now

Propel Holdings on the TSX ticker PRL.

$696M Market Cap with 39.36M shares outstanding and 26.71% insider ownership.

Propel pays a quarterly $0.225 dividend a 5% annual return at todays share price.

1. Investment Memo Snapshot

● Propel finished 2025 with record revenue, record ending balances, and record full-year adjusted EBITDA, but Q4 profitability deteriorated sharply because the company accelerated originations late in the quarter and absorbed the related provisioning and acquisition costs up front.

● The core bull case is that this was a timing and accounting compression quarter, not a broken model: management kept underwriting tight in Q3/Q4, saw credit trends improve late in Q4, then leaned back into growth heading into 2026.

● The key near-term reason the story still matters is funding and product expansion: Propel launched FreshLine, added a US$60 million Mesirow forward-flow commitment, then announced an additional commitment of up to US$150 million tied to FreshLine’s rollout.

● The goeasy situation is an important read-through. In March 2026, goeasy disclosed a major LendCare-related charge-off/write-down situation, historical reporting corrections, covenant waivers, higher funding spreads, and a reduced warehouse line. That likely improves the relative perception of Propel’s underwriting discipline and funding model, though it also reminds investors that this sector can re-rate violently when credit quality slips.

● My bottom line: the operating story remains attractive, but earnings quality is mixed rather than pristine because adjusted profitability still overstates underlying cash generation in a growth-lending model that consumed operating cash in 2025.

2. AI Analyst Summary

Propel is still one of the more interesting North American listed subprime/underserved-consumer fintech lenders: it has grown revenue from US$129.6 million in 2021 to US$589.8 million in 2025, increased full-year net income from US$6.6 million to US$59.5 million, and expanded into Canada, the UK, bank-partner programs, and LaaS.

But the latest quarter was not clean. Q4 2025 revenue rose 21% to US$155.8 million, while net income fell 49% to US$5.9 million and adjusted EBITDA fell 32% to US$21.6 million. Management’s explanation is plausible: tighter underwriting held back growth through much of 2025, then improved credit performance late in Q4 allowed it to accelerate originations in December, bringing forward provisioning and acquisition costs while the revenue remains to be earned over future periods. That explanation is supported by the reported figures, but it does not eliminate risk; it simply means investors need proof in Q1/Q2 2026 that margins and credit normalize as promised.

The strategic setup improved after year-end. FreshLine and the Column relationship broaden Propel’s U.S. addressable market, while Mesirow and the additional US$150 million commitment show third-party capital is still willing to fund new Propel-originated programs. That matters because this is a lender/platform that can grow only as long as it has durable capital support.

Verdict: still investable, but no longer a “just trust the compounder” story. It is now a show-me-the-margin-recovery story.

3. Company Snapshot

Propel Holdings is a Canadian-listed fintech focused on underserved consumer credit, operating through MoneyKey, CreditFresh, Fora Credit, QuidMarket, Propel Bank, and LaaS/bank-partner programs. The shares traded at C$17.86 on March 26, 2026, with a market cap of about C$702.9 million per TMX. The company had 39.36 million common shares outstanding at December 31, 2025, and 42.23 million diluted weighted-average shares for 2025. Directors and executive officers as a group beneficially owned 35.91% of outstanding shares per the 2024 AIF.

On the fundamentals side, 2025 revenue was US$589.8 million versus US$449.7 million in 2024; Q4 2025 revenue was US$155.8 million, up 21% year over year. Full-year net income was US$59.5 million and diluted EPS was US$1.41 / C$1.97; adjusted EBITDA was US$130.3 million. Year-end cash was US$23.9 million, restricted cash US$50.0 million, credit facilities US$329.6 million, and lease liabilities US$9.4 million. Loans and advances receivable ended 2025 at US$459.8 million, while ending combined loan and advance balances were US$589.5 million. Backlog is not a meaningful disclosed metric for this business.

Using the March 26, 2026 share price and year-end fundamentals, valuation looks roughly as follows: P/E ~9.1x on 2025 diluted EPS in CAD; P/S ~0.85x on 2025 revenue converted to CAD using the company’s disclosed FX convention; EV/Revenue ~1.2x; and EV/EBITDA ~5.6x using market cap plus year-end debt less cash. Those are approximate analytical calculations, not company-reported metrics.

Historical context is strong. Revenue has risen from US$129.6 million (2021) to US$226.9 million (2022) to US$316.5 million (2023) to US$449.7 million (2024) to US$589.8 million (2025). Net income moved from US$6.6 million to US$15.1 million to US$27.8 million to US$46.4 million to US$59.5 million over the same period. Share count, however, also rose from 34.33 million issued in 2021 to 39.36 million in 2025, with the biggest step-up in 2024 due to the bought-deal financing tied to QuidMarket.

4. What the Company Does

Propel provides online credit products to consumers underserved by traditional financial institutions. Its operating brands include MoneyKey, CreditFresh, Fora Credit, and QuidMarket, and it also offers Lending-as-a-Service capabilities to third-party institutions plus bank-partner products and, more recently, Propel Bank and FreshLine.

The economic model is a mix of owned-balance-sheet lending, participation interests, fee income from bank/partner programs, and LaaS service revenue. That mix matters because it means not all growth is equally capital intensive: LaaS and forward-flow structures can support revenue growth with less balance-sheet usage than direct lending.

5. Why the Story Matters

The story matters because Propel sits at the intersection of three durable themes: underserved consumer demand, migration from storefront/high-friction lending to digital origination, and institutional appetite for specialty-finance assets when underwriting is strong. Management is explicitly targeting growth via product expansion, new geographies, bank partnerships, UK scaling, Propel Bank, Column/FreshLine, and further AI-enabled efficiency.

It also matters because the public market now has a live contrast case. goeasy’s March 2026 disclosures showed how fast sentiment can collapse when credit quality, reporting integrity, or funding flexibility come into question. Relative to that backdrop, Propel’s messaging around tighter underwriting, improving late-Q4 credit, and new third-party capital commitments becomes more valuable if the numbers validate it in 2026.

6. Revenue Quality Assessment

Revenue quality is above average for the sector, but not elite. The positives are clear: 2025 revenue grew 31%, average combined balances grew 32%, and LaaS service fees grew 191% to US$18.0 million, giving Propel a larger stream of fee revenue that is less balance-sheet intensive than direct lending. QuidMarket also added a new geography and another growth vector.

The main caution is that the business is still fundamentally credit-driven, not SaaS-like recurring revenue. Revenue is linked to outstanding balances, product mix, yields, and credit performance. Annualized revenue yield was 113% in 2025, down slightly from 114% in 2024, while Q4 yield fell to 109% from 113%. That suggests mix is shifting somewhat toward lower-yielding or differently structured products, which is not necessarily bad if it comes with better credit and larger addressable volume.

Cash conversion remains the biggest quality question. Despite positive net income and adjusted EBITDA, net cash used in operating activities was US$25.5 million in 2025 because loan growth consumes cash. Management argues that reclassifying net additions of loans and advances would give a better operating view; analytically that is fair, but from an equity holder’s standpoint the business still requires external funding to scale.

Customer concentration is not disclosed as a major issue. The more relevant concentration risk is funding/partner concentration through bank partners, forward-flow buyers, and institutional funding relationships. That is a real risk even if end-borrower concentration is diffuse.

7. Balance Sheet Risk & Financing Pressure

Balance-sheet risk is manageable, but central to the thesis. At December 31, 2025 Propel had US$23.9 million of cash, US$50.0 million of restricted cash, and US$329.6 million of credit facilities plus US$9.4 million of lease liabilities. Shareholders’ equity was US$261.2 million.

This is not a distressed balance sheet, but it is also not a self-funding lender with abundant excess liquidity. The business model depends on continued access to warehouse/facility capital and institutional forward-flow partners. That is why the February and March 2026 announcements matter so much: the US$60 million Mesirow commitment and additional commitment of up to US$150 million tied to FreshLine are not just “news flow,” they are evidence that the capital markets still trust Propel’s underwriting and servicing platform.

The positive offset is that Propel reduced funding costs in April 2025 by upsizing the CreditFresh facility to US$400 million, refinancing the MoneyKey facility, and lowering weighted average cost of capital by roughly 150 bps assuming full utilization.

Likelihood of a near-term equity raise appears moderate to low based on currently disclosed information. 2025 did bring dilution from the QuidMarket-related financing, but since then management has emphasized debt/funding diversification, forward-flow structures, and even NCIB activity rather than equity issuance.

8. Latest Earnings Review

Q4 2025 was a classic “good growth, bad margin” quarter. Revenue increased 21% to US$155.8 million, loans and advances receivable increased 23% to US$459.8 million, and ending combined balances increased 23% to US$589.5 million. But net income fell 49% to US$5.9 million, net margin dropped to 4% from 9%, adjusted net income fell 53%, and adjusted EBITDA fell 32% to US$21.6 million.

For the full year, the picture was much better: revenue rose 31% to US$589.8 million, adjusted EBITDA rose 7% to US$130.3 million, and net income rose 28% to US$59.5 million. So the issue is not that 2025 was weak overall; the issue is that the exit rate on profitability was weaker than investors wanted.

Provision for loan losses and other liabilities was US$296.9 million in 2025 versus US$222.5 million in 2024, and Q4 net charge-offs as a percentage of average combined balances rose to 14% from 13%. That is the core reason the market was uneasy.

9. Did the Quarter Show Improvement?

Partly, but not cleanly. Credit indicators showed some signs of stabilization by late Q4, and management said delinquency trends improved as underwriting tightening implemented in Q3 and early Q4 began to work through the portfolio. That supports the idea that Q4 may have been the trough in margin pressure.

However, reported quarter-on-quarter improvement in economic quality is not yet proven. Q4 still showed higher realized losses, lower revenue yield, lower net margin, and weaker adjusted EBITDA margin. So the real answer is: the quarter may have set up improvement, but it did not itself demonstrate broad-based improvement in the income statement.

10. Management Commentary Check

Management’s main narrative is that it stayed tight on underwriting, credit improved late in Q4, then it accelerated originations in December, which caused upfront provisioning and marketing costs to hit Q4 while the revenue will be earned later. The numbers broadly support that story. Revenue was only at the low end of the 2025 target range, but ending balances outperformed the updated target, implying a lot of the growth arrived late.

At the same time, management did not fully hit profitability targets. Actual 2025 adjusted EBITDA margin was 22%, below the updated 23%–25% target; net income margin was 10%, below the 10.5%–14.5% initial target; adjusted return on equity was 27%, below the updated 29%+ target. So management’s tone on the long-term opportunity may still be justified, but 2025 was not a clean beat year.

My read: management commentary is credible but self-serving. The explanation fits the data, yet it still amounts to “trust us, the costs came first and the revenue comes later.” Investors should require proof over the next two quarters.

11. Management Credibility Track Record

Management’s track record is good, but no longer flawless. In 2024 the company achieved or exceeded most targets, including revenue growth, adjusted EBITDA margin, net income margin, and returns.

In 2025, performance was mixed. Propel outperformed its updated ending-balance growth target and hit the low end of revenue guidance, but fell short on profitability and return metrics. That does not destroy credibility, but it does downgrade the story from “consistent executor” to “credible management navigating a tougher credit year.”

There is also a positive credibility point relative to sector peers: unlike the recent goeasy situation, Propel has not disclosed historical reporting corrections, covenant waivers, or funding-line concessions tied to sudden charge-off shocks. In the current environment, that relative stability matters.

12. Key Positives

Propel has built a very strong multi-year growth record, with 2025 revenue up 31% and ending balances up 23% despite tighter underwriting.

It has broadened the model beyond pure on-balance-sheet lending through LaaS, bank partnerships, forward-flow structures, and FreshLine/Column. That should support faster growth with better capital efficiency over time.

Institutional capital still appears available to Propel. The Mesirow and additional FreshLine commitments are meaningful votes of confidence.

Insider alignment is strong, with directors and executives collectively owning 35.91% of common shares.

13. Key Concerns

Earnings quality is not as strong as headline adjusted metrics suggest. Full-year adjusted EBITDA was US$130.3 million, but operating cash flow was negative US$25.5 million because loan growth consumes cash.

Q4 2025 margins weakened sharply. Net income margin dropped to 4% and adjusted EBITDA margin to roughly 14% in the quarter, versus much stronger prior-year levels.

Provisioning and credit remain the swing factors. Net charge-offs rose, and the allowance for credit losses remains one of the key audit matters given the judgment involved.

The business remains dependent on external funding markets and partner structures. That is normal for this model, but it is a real risk if investor appetite or warehouse conditions tighten.

14. Inflection Point Assessment

Yes, potentially — but the evidence is incomplete. The likely inflection is that underwriting tightened during 2025, credit improved by late Q4, and new product/funding channels are launching into 2026. The company’s 2026 targets imply meaningful re-acceleration in both revenue and profit.

The problem is that inflections in subprime lending can be faked by timing. A strong ending-balance number can coexist with weak near-term profitability and weak cash conversion. So the inflection is possible, not proven.

15. SWOT Analysis

Strengths: strong revenue CAGR, diversified product/funding model, high insider alignment, proven digital underwriting/servicing platform, growing fee-based LaaS component.

Weaknesses: earnings quality only mixed, funding dependence, complex accounting around ECL and adjustments, sensitivity to credit performance.

Opportunities: FreshLine rollout, Column partnership, Propel Bank, UK scaling, more forward-flow capital, more LaaS states/partners.

Threats: regulatory “true lender” challenges, macro deterioration, funding market tightening, adverse credit turns, sector de-rating after goeasy’s issues.

16. Catalysts & Timeline

Over the next 6–18 months, the main catalysts are: evidence that Q1/Q2 2026 margins recover from the weak Q4 exit rate; FreshLine scaling nationally with the new capital commitments; visible contribution from Column and Propel Bank; continued LaaS growth; and proof that UK/QuidMarket integration is additive rather than distracting.

A softer but still relevant catalyst is relative valuation re-rating if Propel can demonstrate stable credit while peers remain under pressure. The recent goeasy disruption creates an opening for that.

17. Variant View / What Could Prove This Thesis Wrong

The thesis is wrong if Q4 2025 was not timing-related but instead the first sign of a structurally worse credit book. In that scenario, 2026 revenue could still grow while provision expense, net charge-offs, and acquisition costs keep margins depressed.

It is also wrong if FreshLine, Column, or Propel Bank scale slower than expected, or if third-party capital becomes more selective. This is especially important because the 2026 plan assumes strategic initiatives launch well without needing new acquisitions.

A final variant risk is regulatory or legal disruption in bank-partner structures. That is a known risk in the AIF.

18. What Investors Should Watch Next

Watch Q1 and Q2 2026 for four things: whether net charge-offs and provision ratios improve; whether Q4’s weak margin was truly temporary; whether revenue converts into better cash generation; and whether new funding/product partnerships produce revenue without excessive upfront cost drag.

More specifically, I would watch revenue versus the US$725–775 million 2026 target, adjusted EBITDA versus the US$152.5–177.5 million target, and whether return metrics actually move back toward management’s goals.

19. Microcap Investment Quality Scorecard

Business Model Quality: 8/10. Strong digital lending platform with multiple brands, geographies, and partner structures.

Revenue Growth Quality: 7/10. Growth is strong and increasingly diversified, but still credit/funding-dependent.

Margin Profile: 6/10. Full-year margins remain solid, but Q4 deterioration was meaningful.

Balance Sheet Strength: 6/10. Adequate, but not fortress-like; external funding remains essential.

Dilution Risk: 6/10. Manageable now, but 2024 showed equity can be used for strategic expansion.

Management Credibility: 7/10. Good long-term execution, mixed 2025 target delivery.

Catalysts & Strategic Positioning: 8/10. FreshLine, Column, Propel Bank, UK, LaaS.

Valuation vs Opportunity: 8/10. Current multiples look modest if 2026 recovery lands.

Composite: 7.0/10. Good microcap/small-cap quality, but not a no-brainer because credit and cash-conversion risk remain real.

20. Microcap Red Flag Detector

Dilution patterns: Possible Concern. Share count rose materially in 2024 for QuidMarket financing, though 2025 dilution was modest.

Promotional management behavior: None Detected from the primary materials reviewed. Disclosure is detailed and target misses are explicitly acknowledged.

Revenue growth with deteriorating margins: Significant Concern in the latest quarter. That is the core issue in Q4 2025.

Declining cash despite growth: Possible Concern. Cash was modest, and operating cash flow remained negative due to loan growth.

Weak cash conversion relative to EBITDA / adjusted EBITDA: Significant Concern. Adjusted EBITDA was positive and growing, but operating cash flow remained negative.

Customer concentration: None Detected / Data limited. No major end-customer concentration disclosure found.

Related-party transactions: None Detected in reviewed materials.

Aggressive adjusted metrics: Possible Concern. Adjusted EBITDA adds back Stage 1 ECL and certain guarantee liabilities; the rationale is understandable, but these are economically relevant in a lender.

Weak disclosure: None Detected. Disclosure quality is relatively strong for a company of this size.

21. Microcap Multi-Bagger Probability Framework

TAM vs current size: favorable. Propel is still small relative to the underserved credit markets it serves in the U.S., Canada, and now the UK.

Scalability: good. The platform supports multiple brands, bank partnerships, and LaaS structures.

Accelerating growth: mixed. Full-year growth is strong, but Q4 profitability decelerated.

Operating leverage: real over time, but not visible in Q4 2025.

Insider alignment: strong.

Differentiation: meaningful, through underwriting/AI, distribution, and flexible funding structures.

Early market penetration: still early enough to matter, especially with new geographies/products.

Overall classification: Moderate Multi-Bagger Potential. The upside path exists, but it depends on maintaining credit discipline while scaling. This is not a software multiple story; it is a specialty-finance execution story.

22. Final Analyst Take

Final call: constructive, but selective.

Propel still looks like one of the better-run public names in underserved consumer fintech. The company has real scale now, strong multi-year revenue growth, high insider ownership, improving product breadth, and fresh evidence that external capital partners remain willing to fund new initiatives. Relative to what just happened at goeasy, Propel currently looks like the steadier operator.

That said, the latest quarter was not clean, and investors should not dismiss that. The 2025 report showed mixed quality of earnings: net income and adjusted EBITDA were positive, but adjusted metrics benefited from credit-loss-related add-backs, while operating cash flow stayed negative because growth consumed cash. In other words, the business appears profitable, but not fully self-funding in the way a casual glance at adjusted EBITDA might imply.

My judgment is that Propel deserves a positive bias only if you believe Q4 2025 was a transition quarter rather than the start of a worse credit cycle. The evidence so far leans in management’s favor, but not decisively. I would describe the stock today as promising, undervalued on normalized 2026 numbers, and still carrying real credit/funding execution risk.

23. Mock Investment Strategy (Conceptual)

Conceptual only, not investment advice.

OPINION: The stock looks inexpensive enough that a margin-recovery confirmation could drive a meaningful rerating, but the market is unlikely to fully reward 2026 targets until it sees at least one or two clean quarters. Current valuation already reflects skepticism.

My base case is C$22 for 2026 and C$26 for 2027.

What has to happen for that to work:

• 2026 lands roughly around the middle of management’s revenue and EBITDA target range.,

• Q4 2025 turns out to be a timing/provisioning issue, not the start of a structurally worse credit book.,

• FreshLine / Column / new capital commitments support growth without a big new margin reset. Propel announced FreshLine plus an additional commitment of up to US$150 million, on top of the earlier US$60 million Mesirow forward-flow commitment.,

Why I am not using a higher multiple:

• Propel is still in a sector where the market is paying close attention to credit quality and funding durability.,

• The recent goeasy disruption likely makes investors less willing to pay up until Propel proves margin recovery with real results. That is a relative positive for Propel if it executes, but a valuation cap until then.,

My practical framing:

• Below ~C$16: the market is pricing in something closer to a structural credit problem.,

• Around C$22: fair value if 2026 is a decent but not spectacular recovery year.,

• Above C$30: you need clean credit, strong FreshLine scaling, and convincing 2027 self-funding progress.

Looking at the risk vs. reward profile for 2026:

• Bear case is a 15% drop in share price (minus the dividend) so closer to ~10% loss risk. Plus a chance at recovery in 2027.,

• Base case is a ~25% gain plus the dividend. Using all fairly reasonable numbers in a normal market.

• Bull case is probably a 75% gain when you combine price and dividend.

24. Human Opinion

An investor who has researched Propel Holdings more than myself read this report and made the following comment…

I think the upside potential with the relationship with Column and general growth in banking isn’t really considered. Otherwise, pretty reasonable. I still think 10 PE should be the baseline. Which to me is $20 right now, expectations for $25 next year and $30+ the next.

Which tells me the AI is doing exactly what I want (and what I warned about). It’s arguably not factoring in enough forward growth from aspects of the business that are harder to measure (more speculative or human connected) and it’s arguably not tacking on a high enough valuation multiple. It’s being conservative and isn’t just another “I love this stock I’m super bullish” human produced hype article that’s so common on Substack.

This AI report discussed the obvious potential of Propel Holdings, while also pointing out the risks that a bullish human author may not.

25. Sources

Primary materials reviewed:

● Propel Holdings Q4 and FY2025 audited financial statements.

● Propel Holdings Q4 2025 MD&A.

● Propel Holdings FY2024 audited financial statements and Q4 2024 MD&A.

● Propel Holdings FY2023 and FY2022 audited financial statements; FY2021 year-end financial statements.

● Propel Holdings 2024 Annual Information Form.

● Propel Holdings March 2, 2026 earnings release.

● Propel Holdings February 25, 2026 Mesirow/FreshLine funding announcement.

● Propel Holdings March 10, 2026 FreshLine launch and additional US$150 million commitment.

● Propel Holdings April 28, 2025 funding-cost/facility announcement.

● Propel Holdings IR stock/analyst coverage page and TMX quote page.

Recent comparator / sector context:

● goeasy March 10, 2026 operational update.

● goeasy March 24, 2026 amended financing arrangements.

● Reuters reporting on goeasy’s March 2026 charge-offs, covenant relief, facility repricing, and delayed results.

Seriously, this is NOT financial advice.

I mean it. None of this is financial advice—I say it all the time, and I genuinely mean it. I don’t know you. I don’t know your experience level, risk tolerance, debt situation, or anything else about your financial position.

So please - don’t buy, sell, or hold a stock just because of my opinion in this article.

I have been wrong plenty of times, and I strongly encourage everyone to invest within their own capabilities and consult a financial advisor if needed.

Owning a stock can create bias so please be aware of this. At the time of writing this article I own a 2% position in Propel Holdings in my microcap portfolio.

I was not paid (or compensated in any way) for this article from any companies I discussed, or anyone affiliated with the companies discussed in this article.

Thank you! 🙏

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Given the rise of AI (and articles being written by ChatGPT) …

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When I say “boom or bust” many of these stocks are more likely to “bust”.

From my 2025 list of “tiny stocks” only two are in the green, two are in the red, and one stock (Evome Medical) went “bust” as it got delisted and is probably bankrupt. So when you look at some of these stocks and think to yourself “OMG this stock could 10x” the likelihood of that is very VERY low.

Position sizing and strategy is hugely important on these tiny stocks. Don’t invest more than you can lose. Only invest more as the company de-risks. Protect your capital !

Now in saying that. In my defense 2025 was a brutally shitty year for tiny stocks. In 2024 I had several tiny stocks report 300-1000% share price gains like ZOMD, NCI, and NOW. Even in 2025 if you sold your tiny stocks in July you probably made money, as most of the worst part of 2025 has been the back half. However, you have to be prepared for this type of volatility in your strategy especially for companies this small. Some years you might get one winner, sometime you get a few winners and think you’re a genius (and make incredible returns), only to come crashing back to earth with a year of nothing but losers. It happens to all of us - so don’t feel alone!

Two of these stocks are backed by investors I know and respect. There is only one stock on this list I have been researching for less than 3 months. I do feel like this years list is higher quality than last year.

Disclaimers on what I own (or don’t own) are at the bottom of the article, of course with the additional disclaimer that this is not financial advice.

Was that 15 disclaimers? 🤣 Let’s discuss some stocks !!!

Nowhere to go but up ?

NEXGEL, Inc. is a small U.S. medical and consumer products company that makes ultra-thin hydrogel sheets—basically “wet bandage” material—for wound care, medical devices, and skin-contact consumer products. It sells its own branded items like blister pads, scar and wound dressings, and cosmetic/skin patches, and also manufactures custom hydrogel products for other brands on a contract basis. The core business is taking its hydrogel technology and turning it into ready-to-use patches and dressings that can stick to skin comfortably, deliver ingredients (like cooling or active compounds), and then peel off cleanly.

🐂 The Bull Case:

• Would you be interested in a company on the Nasdaq that has grown revenue from $2M in 2022 to $12M in 2025 and is probably going to reach profitability in 2026 thanks to a large European company making this tiny stock its US distributor ? How about if I told you this company would be only 1x 2025 sales ? Yes that is Nexgel Inc. They have guided for ~$12.5M revenue in 2025 and they have a market cap of $12.2M which looks crazy to me considering their consistent growth and how close they are to profitability.

• NexGel reached a 52-week high of $5.10 on anticipation that their new large customer AbbVie would finally commence operation of their $500M equipment and NexGel would gains tens-of-millions of new revenue. The market found out this project was not starting (and maybe cancelled forever) and the stock has now crashed to C$1.50 - is that oversold? I think so. These tiny stocks can move up too quickly on greed, and down too quickly on fear - as they are mostly traded by small retail investors. Right now the narrative is negative fear due to the loss of AbbVie, but I feel like the negative sentiment is completely ignoring their growing core business excluding AbbVie.

• For astute investors AbbVie was always the gravy and dessert and not the meat and potatoes. In 2025 NexGel launched the sale of Histalov an antihistamine intolerance supplement for Stada (a German pharma company with $4 billion of annual sales) the second product is launching in Q4-2025 and will contribute to Q1-2026 revenue and if these product launches go well then NexGel has guided to launching 5 additional STADA products (SKUs) launching in 2026.

So NexGel is a $12.2M market cap company with a moat in “hydrogel” that is expected to produce $12.5M revenue in 2025 and could be launching 7 new SKU’s in 12 months with many of them contributing starting in Q1 2026.

Beyond the potential revenue growth, their manufacturing facility for HydroGel is operating under 20% capacity and any increased production should also increase margins.

AbbVie was exciting and potentially a huge inflection point for NexGel, but with AbbVie cancelled that doesn’t mean NexGel isn’t still a good growing little company that could become profitable in 2026.

🐻 The Bear Case:

• NexGel without AbbVie is cobbling together their company in confusing little pieces. I like simple companies that are easy to understand, but in 2026 NexGel will be selling everything from pharmaceutical products to first aid supplies to beauty products. Most of these products are still early stage and it’s hard for investors to dedicate the research time needed to build conviction in these products (and the company).

• Stada appears to be the new AbbVie. NexGel has launched one Stada product now, a second in Q4, and then five more in 2026 - if the launches are successful. What if the launches are not successful? It sometimes takes NexGel a year to land a new customer, as NexGels product HydroGel needs to be tested with whatever product a potential customer wants to sell. So if the Stada launches are unsuccessful then NexGel could be dead money for a long time.

• Something smells off. NexGel filed a special meeting proxy (Oct 30, 2025) to ask shareholders to increase authorized common shares from 25,000,000 to 1,000,000,000 shares. That vote was supposed to happen at a Special Meeting on Nov 26, 2025. On Nov 21, 2025, the Board cancelled the special meeting and explicitly said they will not pursue stockholder approval for the proposed increase. Authorized common stock is still 25,000,000 shares, not 1 billion. It’s great that the board did their damn job (full credit to them here) but why was the company asking for ONE BILLION shares?

Don’t get me wrong, NexGel is a high risk company (every $12M market cap is) however investing means balancing risk verses potential reward, and I still think NexGel has a promising future as I really like the potential applications of their Hyrogel product.

NOTE: As I was writing this article the following news dropped from NexGel.

This looks like a very smart decision for NexGel ! and I will continue to break down this company (and this news) in my discord which you can reach through Substack or Patreon. To figure out which is better for you, check out www.commonsenseinvesting.ca

Here is a 1 hour and 11 minute interview with their CEO completed recently (November 2025).

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This article is not “Runner-Up Stocks for 2026” or “Stock Picks 6-10 for 2026”. These stocks are not simply good companies that couldn’t crack the top 5 … NO … this article is “wildcard” stocks. These are stocks that could be terrible stock picks for 2026, but for some reason I can’t get them out of my mind.

Most of these companies need significant positive change (whether through skilled execution - or luck) to really find success.

My article with some higher quality microcap stocks is {LINK HERE} for some more consistently higher quality companies, but let’s have some fun looking at some misfit stocks.

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December is tax season - investors have the opportunity to sell some winning stocks to lock in profits (capital gains) and then sell some losing stocks to reduce the tax burden on those gain (capital losses).

This results in some good “winning” stocks dropping in share price, and some unlucky losing stocks also dropping in share price. You have a choice between buying good companies at reduced valuations, or take a bet on a losing stock that looks “stupid cheap” if they can recover in 2026. It’s a buyers market!

2025 has been a shitty year overall. I won’t get into how bad or why (as that will be discussed in another article) however if December is when stocks are normally on sale, I think we can consider December 2025 as a bankruptcy sale. Many good companies (hopefully) are down 30-40-50% from their highs, and some of the unlucky “losers” this year are quite literally priced for bankruptcy.

Bad news for 2025, but good good news for 2026?

Hell if I know 🤣 We can’t control the stock market and we sure as hell can’t predict whether the 2026 economy returns to normal (experts constantly make predictions on this - almost always incorrect predictions). All I know, is that every December I rebalance my portfolio to make my bets for the next year.

What are some bets I am making on for 2026 ?

Before I get into some specific stocks, let’s cover some things I am looking for in 2026.

• I feel like there are some good companies for sale at very good valuations.

  • What this means is that I am more likely to buy a stock I already know well (and maybe already own) rather than get excited about new stocks. If I already have 20+ hours of research into a stock and I think it can give me 25%+ returns in 2026 - that’s heavy competition for any “new” stock I am researching that’s higher risk because I don’t understand it as well.

• Low risk - vs - high risk is VERY evident right now.

  • 2025 wasn’t just a bad year on stock charts, it was a bad year for financial fundamentals. Some companies are struggling so badly I have started to worry about their future. What this means is I have to be very clear on what stocks I will allow myself to buy larger positions on. There are some high risk stocks out there that look very attractive, but many of these companies are “priced for bankruptcy” because they could actually go bankrupt. These need to be managed into very small positions I am willing to lose. There are enough high quality companies at cheap valuations I don’t need to chase risk.

• I am betting on a “return to normal” in 2026.

  • This is a big and important point to make right now. 2025 was a very volatile unpredictable year for most companies. If a company normally has 20% margins but in 2025 only had 10% margins I am not going to immediately throw them in the garbage. I am willing to put in some research and find out whether those margins can return to 20% in 2026. So yes, many of the stocks I am interested in right now are DOWN in 2025, but I don’t care - my question is whether they can be UP in 2026.

OK - let’s get to this discussion. And this is just a discussion - these are NOT my “top picks” just me writing down some ideas as I try to narrow my decisions.

I plan to write several articles on stocks that have my interest in 2026:

• Stocks above $20M USD market cap (this article)

• Stock below $20M USD market cap

• Wildcard picks

• What else … ?

  ---

Can the US Economy return to normal ?

Cematrix Corp is basically a specialty construction materials contractor: they make and install lightweight cellular concrete (“foam cement”) for infrastructure and industrial projects across North America. Their mobile batch plants show up on site, mix cement slurry with a proprietary foaming agent, and pump this low-density, highly flowable material into place as backfill or insulation for roads, bridges, tunnels, runways, retaining walls and other jobs where soils are weak or frost-prone. The pitch is that their product can be cheaper and faster to install than alternatives like geofoam or traditional granular fills, with better thermal and durability characteristics, so the business lives or dies on winning chunky infrastructure contracts and keeping that project backlog converting into actual high-margin pours.

🐂 The Bull Case:

To invest in Cematrix you have to understand the story. In 2023 Cematrix reported a record $53M revenue, and a $55M backlog suggesting continued growth - that growth never happened. Cematrix is a sub-contractor to sub-contractors on large US construction sites - they do not control the timing of their work. And in 2024 that work largely either shut down or slowed thanks to the US election, a changing government, and then an economy adjusting to tariffs. That $53M revenue in 2023 slowed to a dismal $35M revenue in 2024.

• How is this declining revenue part of the “bull case” ? Well that work hasn’t gone away, it was just put on pause. In 2025 the US economy started restarting projects, and Cematrix is expected to report at least $45M revenue in 2025. The even better news is they now have a $75M backlog that should get rolling along more consistently, and analysts are expecting Cematrix to report $67M of revenue in 2026.

• Having a good 2026 would add to an already strong financial fundamental company. Cematrix has $9.9M cash, and has produced $5.6M of operating cash in 9-months 2025. They have no long term debt. Analysts expect Cematrix to produce $67M revenue and $10M EBITDA in 2026 which should add more cash to their balance sheet. As I write this article they are using some cash to buy back shares, and they have talked about acquisitions - either acquiring a company for their own expansion into the USA, or to get bought out by a larger company. All fairly decent outcomes for shareholders in my opinion.

• Cematrix has options. They have enough cash and have been talking about someday acquiring a company in the US-south where they could operate more consistently in the winter months and reduce their seasonal volatility. They are also a good candidate for other larger companies to buy them out. A potential buyer would be getting cash, no debt, well maintained equipment, high quality loyal employees, and exposure to Canada. Both options would be good for shareholders.

Lots of momentum here. Macro tailwinds. Backlog tailwinds. A good balance sheet that gives them options. Maybe they acquire a company in the USA to expand. Maybe they get bought out at a nice premium. Lots of potential rewards here.

🐻 The Bear Case:

• Seasonal, lumpy, volatile, and unpredictable. Did I miss any words here to describe a company that is not in charge of their own future? As discussed, Cematrix is a tiny company on large projects - they don’t control when they work (or don’t work). So if anything changes in the USA to suddenly put a halt on infrastructure projects, that $67M of expected revenue could get significantly reduced (and there would be nothing Cematrix could do about it).

• Did I mention that Cematrix is also a seasonal company that shuts down in the winter to repair and maintain equipment? Because of their seasonality and unpredictability, Cematrix is never going to get a high valuation. Right now with a C$52.5M market cap and ~C$10M cash that’s a C$42.5M EV with C$10M of expected EBITDA in 2026 - that’s a 2026 expected EV/EBITDA of 4.25x and while that seems “cheap” I would be surprised if Cematrix ever trades for a 10x multiple. In fact I would be happy if they could get 8x.

• Tariffs do not effect Cematrix, but for some reason the market thinks tariffs do effect Cematrix. In March of 2025 when the stock market was down due to tariff fears and scary news about a “trade war” Cematrix was right there at rock bottom with a shovel trying to dig further down.

Not a perfect company, it’s seasonal, and relies heavily on the US infrastructure economy rolling forward without problems (good luck with that) but if investing is a balance of risk verses reward - Cematrix has a good line-up of potential rewards in 2026.

Here is their recent presentation at Small Cap Discoveries.

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People that follow me closely know that as far back as July I changed my focus from 2025 to 2026. The chart below shows that I believed other than a short bull-run in October, that most of the second half of 2025 was going to be “in-the-red” and that I was going to use that time to buy my highest conviction stocks at the lowest prices. I was also showing concern for a “Broad Market Crash” that we are getting right now.

I was eerily accurate!

I like being correct! And the good news about this chart (and me being correct so far) is I am also predicting a good market for microcap stocks in 2026. Why? Because I think the economy returns to normal.

Maybe I am being naive, but I believe that after 2025 being a year of tariffs and trade wars that the USA calms things down and focuses on economic growth ahead of the mid-term elections in November 2026. Voters tend to be angry with their government during recessions (especially if they think the recession was directly caused by government policy).

The common theme for microcap stocks in 2025 has been lower than expected revenue growth, higher than expected expense growth, and surprise delays in either contracts or timing of orders. The result? I would suggest ~95% of the stocks I cover have dropped on earnings. There have only been a few “outliers” who reported earnings in 2025 and it resulted in a share price gain.

My expectations hope for 2026 is the US Fed cuts rates, tariffs remain stable/ reduced, and both contracts & shipping returns to normal operations. The result should be a return to stronger earnings in 2026, and given how challenging 2025 has been - the year-over-year comparables for many companies should create attention.

If you agree with me that 2026 might be an improved year, then right now in late November (and early December) seems like the most important time of the next 12 months for making money - selecting the stocks that are most likely to give us the best returns in 2026.

Which then takes me to the stocks I think could make me the most money in 2026, and I completely agree with Ian’s post about how the “best new ideas are old ideas” as “you already know where the skeletons are buried”. If a stock you already have 100 hours of research into has potential to 2x - then why would you go looking at other stocks?

So today I have a company with a LOT of buried skeletons, but I can walk you through why I think those skeletons will be less scary in 2026 than they were in 2025.

Let’s take a look at NTG Clarity Networks …

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A cash heavy value stock with significant share buybacks, a shiny new 2% dividend, and the potential for growth in 2026 has me interested enough to buy a 1.5% position in my microcap portfolio and will be watching for greater execution in 2026.

Lets get started.

As always this is NOT financial advice. I know nothi…

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🛑 This article is NOT for experienced investors!

✅ This article is for NEW investors looking to learn some basics!

Investing is more simple than you think.

How? By using common sense 😉

Financial institutions don’t want you investing your own money because they take a percentage of every dollar you i…

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This is a huge opportunity as it brings discovery to Canada with investors bringing capital and looking for places to invest outside of the USA. With 70+ presenting companies and 500+ investors, this isn’t just …

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