Relevium Technologies Inc. (TSXV: RLV) operates in the health and wellness industry and is majorly focused on online distribution. The principal business of the group is the identification, evaluation, acquisition and operation of brands and businesses in the health and wellness markets.

Key Updates:

• The company failed to file its annual and first quarter financial statements for the period ended June 30, 2020 and September 30, 2020. The deadline was on October 28, 2020 for the annual and November 30, 2020 for the quarterly results. The company stated that the delay was due to the company’s engagements with new auditors RSM Canada LLP, and the impact of COVID 19 pandemic.

• Until the Annual Financial Filings are filed, RLV would issue a bi-weekly default status reports in accordance with the National Policy 12-203 - Management Cease Trade Orders. The Company confirms that there have been no material business developments or other material information relating to its affairs as of the date of this news release that have not been generally disclosed.

Q3FY20 Financial Highlights for the period ended March 31, 2020:

• Revenue stood lower at CAD 0.529 million, as compared to CAD 1.038 million in the previous corresponding period (pcp).
• Gross margin stood higher at 79% in Q3FY20, as compared to 54% in Q3FY19, aided by higher selling of high-margin products.
• The company posted a net loss of CAD 0.19 million, as compared to a net loss of CAD 0.95 million in the previous corresponding period, partially supported by lower quarterly expenses of CAD 0.434 million, versus CAD 1.50 million, a year ago.
• The company posted total assets of CAD 8.338 million on Q3FY20, while current assets were recorded at CAD 1.573 million.

Risks:

One of the major challenges for the Company, in terms of its ability to execute its strategy, is its ability to secure financing for the upcoming projects.

Stock Recommendation:

The stock of RLV corrected ~28% and ~16% in the last six-months and one year, respectively. During October 2020, the corporation announced that it had shipped a total of CAD 215,000 worth of generic formulations to its customer, Innova Health Care based in Saudi Arabia through the company’s subsidiary, BGX E-Health LLC. Despite certain operational activities, the company’s performance seems gloomy due to a lack of business activities. Further, we do not have clarity on the company’s financial and operating performance as the group did not file the reports for the last two filings periods. On the technical front, the stock is trading in a bearish trend, with price closing below the 10-day, 20-day, 30-day, 50-day, 100-day, 150-day and 200-day simple moving averages (SMAs). Further, 14-day RSI is hovering near oversold territory, implies further fall can take place in the counter. Also, the leading momentum indicator, MACD is falling with the difference between 12-day and 26-day EMAs is negative and MACD oscillator hovering below its 9-day SMA signal line, which is a bearish indicator.  

Hence, considering the above mention facts, we prefer to remain on the sidelines. Hence, we recommend investors to ‘Avoid’ the stock at the closing price of CAD 0.025 on December 15, 2020.

RLV Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

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