Small-Caps: Breakouts, Breakdowns, and Future Trends (RELI, SLNH, AUUD, LTRY, TBLT)

3/10/20246 min read

Shedding light on five small-cap companies for the upcoming week, our primary objective is to identify forward-looking catalysts. Additionally, we meticulously examine critical entry points to steer clear of chasing potential bottom bouncers.

Reliance Global Group Inc. (NASDAQ: RELI) - Reliance Global Group Inc. saw its company shares conclude last week's trading session at $0.39, marking a decrease of less than 1%. In November of the previous year, the company disclosed its entry into a Letter of Intent (LOI) to acquire a well-established benefits enrollment company, referred to as the "Target." This Target is recognized as a primary provider of voluntary benefits to approximately 45,000 employees across the United States, distinguished by its utilization of cutting-edge technology within the industry. The acquisition remains contingent upon the execution of a definitive agreement and other customary closing conditions, with the transaction anticipated to finalize in the first quarter of 2024. Ezra Beyman, CEO of Reliance, expressed enthusiasm regarding the announcement, citing it as the company's most significant planned acquisition to date. He highlighted the expectation of more than doubling the current revenue, presenting attractive EBITDA returns. During fiscal year 2024, it is projected that the Target will generate revenue exceeding $21 million, consequently elevating Reliance's anticipated consolidated revenue by over 100% to $35 million. This substantial increase is anticipated to yield significant cash flow for the combined entities throughout 2024 and beyond. Meanwhile, as we await further company updates, we will focus on a potential resistance break in the $0.44 area.


Soluna Holdings, Inc. (NASDAQ: SLNH) - Soluna Holdings, Inc. shares concluded last week's trading session at $4.20, experiencing a slight decline of less than 1%. Towards the end of December, the company unveiled Project Kati (166 MW), which continues its momentum into 2024 and is slated to exit the ERCOT planning phase by the end of Q1 2024. Additionally, Project Dorothy 2 (50 MW) is set for a construction bid period in early 2024, with the ERCOT model update submission already completed and approval anticipated in early 2024. Last week, the company provided further updates, including the signing of its first AI Hosting deal at Project Sophie and initiated necessary preparations. Moreover, curtailed energy consumption surged by 20% since December. CEO John Belizaire also discussed Soluna's innovative approach to sustainable data centers in a video. As we anticipate further updates from the company, attention is focused on a potential resistance breakthrough at the $4.45 mark.


Auddia Inc. (NASDAQ: AUUD) - Auddia Inc. saw its company shares close last week's trading session at $3.07, marking a decrease of slightly over 6%. The company recently announced the withdrawal of the S-1 filing, which aimed to secure financing for the acquisition of Radio FM, a prominent AM/FM radio streaming app. Jeff Thramann, Executive Chairman of Auddia, commented, "We've been actively pursuing an ambitious strategy to acquire AM/FM streaming apps, negotiating with three targets simultaneously. However, it's evident that current market conditions are unfavorable for securing our largest acquisition as the initial target. Therefore, to maximize shareholder value, we are withdrawing the current S-1 filing related to the Radio FM acquisition." The company intends to proceed with discussions for the remaining two targets under Letter of Intent (LOI), with plans to sign a purchase agreement for target #2 in Q2. John Mahoney, CFO of Auddia, further explained, "As we progressed with the purchase agreement for Radio FM and explored financing options, we recognized the opportunity for a more capital-efficient approach. This involves acquiring target #2 followed by target #3, both of which require significantly less cash at closing. Upon successful integration and demonstration of synergies with these targets, we'll be better positioned to pursue larger opportunities in our sector." While awaiting further updates from the company, attention is directed towards a potential resistance breakthrough at the $3.25 level.

--, Inc. (NASDAQ: LTRY) -, Inc. concluded last week's trading session with shares at $2.50, reflecting a 2% decline. In October of the previous year, the company unveiled its agreement to acquire Nook Holdings Limited (Nook), renowned for its innovative presence in the sports, fitness, and wellness sector. Nook's distinct co-working approach in Dubai, coupled with its exclusive partnership with the Dubai Multi-Commodities Centre Free Zone (DMCC), positions it as a hub for sports entrepreneurs, offering a spectrum of services including business setup support, insurance, VAT registration, and networking opportunities. Following this acquisition, Nook is set to be rebranded as In December, the company disclosed additional funding, paving the way for full operational resumption. Furthermore, is proceeding with the acquisition of Nook Holdings Limited to bolster its brand presence in the Middle East. The infusion of new capital also facilitates the advancement of strategic acquisitions. Revised terms of the original purchase agreement with Nook have been established, with poised to finalize the acquisition by the end of the first quarter of 2024 upon completion of the deposit payment. Awaiting further updates from the company, attention is drawn towards a potential resistance breakthrough at the $2.77 mark and we would also like to mention the company filed an S-3 that has not gone into effect as of the writing of this article.


ToughBuilt Industries, Inc. (NASDAQ: TBLT) - ToughBuilt Industries, Inc. saw its company shares decrease slightly by under 1% to $3.74 by the end of last week. In January, the company unveiled the release of 16 new products to its StackTech® mobile toolbox system, bringing the total to 24 SKUs accessible to customers both in stores and online. Michael Panosian, Co-Founder and CEO of ToughBuilt, emphasized the company's commitment to achieving profitability and enhancing shareholder value. He highlighted a comprehensive strategy, including implementing cost-saving measures such as overhead and headcount reductions, price adjustments, and optimizing shipping costs. Moreover, the company has introduced numerous innovative product lines across various categories to drive additional revenue. Panosian expressed pride in the performance of the expanded StackTech line, projecting substantial revenue impact to accelerate progress towards fiscal goals. Last month, Panosian expressed optimism about the company's trajectory, citing revenue and gross margin growth and nearing the point of covering SG&A expenses. He outlined a focused approach on new product sales, attracting new customers, and operational efficiency to achieve positive operating cash flow by Q3 2024. Additional cost-saving measures, including workforce reductions and senior management salary adjustments, are anticipated to contribute to this objective. Panosian also extended gratitude to the company's team, retail partners, and shareholders for their unwavering support during this growth phase. As updates from the company are awaited, attention is directed towards a potential resistance breakthrough at the $3.85 mark.

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