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  5. SPOT: Can you please comment on this stock. [EarthLabs Inc]
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Q: Can you please comment on this stock. Is it a buy, sell or hold? What is the significance of the most recent news regarding 'adoption of advance notice by law'. Does it signal trouble in the company? Thanks
Asked by Charles on March 15, 2024
5i Research Answer:

SPOT is a microcap mining investment and technology company, that provides AI and data science to mineral deposits in Canada. It has a decent balance sheet with minimal debt and total cash at $47.6M. Cash from operations and free cash flow is negative in fiscal year 2023. Profit margins are frequently fluctuating between being slightly profitable and coming in at a loss. There is not much significance to the recent news.  The adoption of an "Advance Notice By-law" refers to the company's implementation of a policy that requires shareholders to provide advance notice when making director nominations. This by-law sets out specific procedures and deadlines that shareholders must adhere to when proposing nominees for the board of directors. SPOT is too small and risky for us to consider at its current size and things will likely be volatile for a while until the company can sustain profitability. We would say sell, but if one is interested in the business, it could be worth monitoring financials.