April 02, 2023: Bullish End To The Week And Q1 2023

After an uninspiring start, the markets made a bullish turn in the second half of the week. Dow Jones was up 3.2%, S&P 500 rose 3.5%, and Nasdaq was up 3.4%. Twitter was recently valued at US$20 billion in a new employee stock grant, even as Fidelity marked down its stake in Twitter by another 7.9%, bringing its total writedown on its stake since its acquisition to 63.5%. Disney cut its metaverse division as part of a broader restructuring. EA is laying off 6 percent of its workers. Alibaba stock jumped 10% as the Chinese tech giant begins its biggest reorganization ever and eyes new IPOs. Alphabet’s DeepMind and Google Brain set aside rivalry, and target OpenAI. Microsoft now claims GPT-4 shows ‘sparks’ of general intelligence. Bill Gates says self-driving cars will be as revolutionary as the PC after riding in one. Apple reportedly demoed mixed-reality headset to executives in the Steve Jobs Theater last week, even as mass production was reportedly pushed to Q3 2023. Netflix appears to be working to bring games to TVs with the iPhone as a controller. Meta Platforms will allow European users to opt out of personalized advertising on Facebook and Instagram after the European regulators in January fined Meta 390 million Euros for unlawfully forcing users to consent to personalized ads in its apps. Bitcoin has stormed to a 72% gain over the last three months and is on track for its strongest quarter in two years. The token has outperformed both the Nasdaq 100 and gold, which are up 15% and 9%, respectively, in the same stretch. In Canada, Sophic Clients, UGE and Jasper, both plan on closing second tranches of their previously announced financings in the coming weeks, with Jasper announcing an increase of the offering to $900,000 from $750,000. UGE’s Green Bonds’, which mature on June 30, 2027, and bear interest at a rate of 9% per annum, payable semi-annually, second tranche is expected to close by the end of April 2023.

Sophic Client UGE International (UGE-TSXV, UGEIF-OTC) announces initial closing of C$1.42m Private Placement of Green Bonds.

The Company has completed a first tranche closing of the brokered private placement of green bonds of the Company, previously announced in its March 8, 2023 press release, for aggregate gross proceeds of C$1,423,545. The Offering comprised of a brokered “best efforts” private placement led by Canaccord Genuity Corp., on behalf of a syndicate of agents including iA Private Wealth Inc. and Raymond James Ltd., for gross proceeds of $604,095 and a concurrent issuer-direct offering for aggregate proceeds of US$607,000. A second tranche is expected to close by the end of April 2023. The Green Bonds mature on June 30, 2027, and bear interest at a rate of 9% per annum, payable semi-annually in arrears calculated on the last calendar day of June and December, with the first interest payment to be made on December 31, 2023. Net proceeds from the Offering will be utilized for the development of solar and energy storage projects of UGE and its subsidiaries. The Green Bonds will be subject to a four month hold period from their date of issuance. http://bit.ly/3nAQ4S9

Sophic Client UGE International (UGE-TSXV, UGEIF-OTC) achieves Notice to Proceed milestone for 1MW rooftop community solar project at Foxcroft Academy in Maine.

The project is poised to become Maine’s largest rooftop solar installation, as well as UGE’s first rooftop project in the state. To be built atop a new 80,000-square-foot fieldhouse at Foxcroft Academy, an independent high school in Dover-Foxcroft, the project will offset nearly 16,500 metric tons of CO2 over its lifetime – the equivalent of about 40 million miles driven by a car. Once operational, the Foxcroft project is estimated to produce an average of $150,700 in annual revenue, with a total facility lifetime of 20 years. With this project, UGE has reached NTP on 7.2MW of projects and commercial operation on 1.4MW of projects so far this year. Construction on the Foxcroft project is set to begin this spring. http://bit.ly/3nwk0id

Sophic Client UGE International (UGE-TSXV, UGEIF-OTC) achieves Notice to Proceed milestone for 2.8MW community solar project in Bangor, Maine.

The project is UGE’s largest community solar project to-date. It will be built on a vacant field in the outskirts of Bangor, Maine owned by Grant Realty. UGE has had the project appraised by an independent third party at a value of $3.24 per watt, with the project’s total fair market value at $9.2 million. Once operational the project is estimated to produce an average of $626,402 in annual revenue, with a total facility lifetime of up to 35 years. The Company currently expects average recurring revenue to carry gross margins at or around 85%. http://bit.ly/3Ko1jGk

Sophic Client Jasper Commerce Inc. (JPIM-TSXV) reports Q2 (Jan) Fiscal 2023 financial results and announces increase to its Convertible Debenture unit financing.

Jasper Commerce Inc., reported 5% quarter-over-quarter growth in revenue from software subscriptions, which reached $325,349 in Q2 2023, up from $308,554 in the previous quarter and $291,779 in the same quarter of the previous year. The growth reflects the Company’s continued focus on its core software business. The Company launched its transformation plan in January, which aims to reduce its monthly expenses while increasing its software subscription revenue run rate. The Plan targets a significant decline in monthly cash costs to $210,000 through the reduction of headcount and other expenses. The Plan also includes the addition of new software subscription revenue monthly run rate (“MRR”) of $5,000 each month going forward, which equates to an MRR quarterly sequential growth rate target of approximately 10%. If the operating goals are achieved, the Company would reach cash flow breakeven by March 2024 at which time MRR would be approximately $180,000 ($2,160,000 Annual Revenue Run Rate and $540,000 quarterly). The Company remains focused on improving its financial position and achieving cash flow breakeven by March 2024. After quarter end, Jasper closed the first tranche of its debenture unit offering (the “Offering”), issuing 636.5 units for gross proceeds of $636,500. Each unit (“Units”) is comprised of: (i) $1,000 principal amount of 12% secured convertible debentures issued by the Company with a maturity date of five years from the date of issuance; and (ii) 20,000 common share purchase warrants of the Company. The Offering initially was subject to a maximum offering size of $750,000, including an over-allotment option of the Company. The Company is pleased to announce the increase to the size of the Offering to $900,000, including over-allotment, subject to any necessary regulatory approvals including the TSX Venture Exchange. http://bit.ly/40U1r67

Sophic Client OneSoft Solutions Inc. (OSS-TSXV, OSSIF-OTC) reports Q4 and annual results for Fiscal 2022 and reiterates Fiscal 2023 guidance.

Revenue increased 55% over the prior year to $6.9 million in Fiscal 2022, comprised of $5.9 million of Cognitive Integrity Management (“CIM”) associated SaaS revenue, $0.8 million revenue from Integrity Management (“IM”) Operations, and a $0.2 million gain from an increase in the foreign exchange rate. Gross profit increased 48% over Fiscal 2021 from $3.3 million to $4.9 million in Fiscal 2022. The net loss declined by $0.9 million from $3.9 million in Fiscal 2021 to $3.0 million in Fiscal 2022. Management is forecasting revenue of $10.1 million in Fiscal 2023, of which $9.2 million is expected from increased software use by existing customers, based on current and projected consumption of the Company’s SaaS solutions and associated services.  http://bit.ly/3ZryWeQ

Martello (MTLO-TSXV) announces closing of first tranche of Private Placement totaling $0.6 million.

The Company announced the closing of the first tranche totalling CAD$600,000 (the “First Tranche”) of a non-brokered private placement of common shares in the capital of the Company (“Common Shares”) for aggregate gross proceeds of approximately CAD$1,200,000 (the “Private Placement”). Pursuant to the Private Placement, Martello expects to issue 24,000,000 Common Shares at a price of CAD$0.05 per Common Share, in two tranches for aggregate gross proceeds of CAD$1,200,000, subject to approval of the TSX Venture Exchange (the “TSXV”). The Private Placement is expected to be completed in two tranches, the second of which is expected to close in April 2023. The sole subscriber in the Private Placement is Wesley Clover International Corporation (“Wesley Clover”), a corporation controlled by Terence Matthews, Chairman of Martello, and a Control Person of the Company (as such term is defined in the policies of the TSXV). https://bit.ly/3ZB6gQB

Canadian government ups semiconductor focus, invests $36 million in Ranovus.

Ottawa-based Ranovus has secured $36 million through the Canadian federal government’s Strategic Innovation Fund. The funds will help support a $100 million project to advance domestic production and manufacturing of semiconductor products and services. The announcement follows US President Joe Biden’s visit to Canada, where he and PM Justin Trudeau vowed to work together to create a strong, environmentally responsible, and resilient North American critical minerals supply chain. To strengthen advanced packaging for semiconductors and printed circuit boards in North America, the United States announced an additional US$50 million in Defense Production Act funding for US and Canadian companies to advance packaging for semiconductors and printed circuit boards. Last year, Canada committed to provide up to $250 million for semiconductor projects from the Strategic Innovation Fund in the near term. The Strategic Innovation Fund first funded Ranovus in 2018 with $20 million. http://bit.ly/3G0SVtZ

First Citizens to buy SVB after biggest failure since 2008.

First Citizens BancShares Inc. agreed to buy Silicon Valley Bank which was seized by regulators following a run on the lender. The Raleigh, North Carolina-based bank entered into a purchase and assumption agreement for all deposits and loans of SVB, according to a statement from the Federal Deposit Insurance Corp. The deal includes the purchase of about US$72 billion SVB assets at a discount of US$16.5 billion, the FDIC said. http://bit.ly/3Kl8LC3

Twitter valued at US$20 billion in new employee stock grant.

Twitter gave its remaining employees private equity grants late Friday night, valuing the company at US$20 billion just five months after Elon Musk completed his takeover of the social media company for US$44 billion, according to a person briefed on the grants. In an email to staff detailing the grants, Musk acknowledged the valuation drop but said he sees “a clear, but difficult, path” to a valuation of more than US$250B valuation. The equity will start to vest in six months, and employees will first be able to cash out in a liquidity event a year from now, the person said. The Wall Street Journal earlier reported the equity grants. The stock award reflects an effort by Musk to retain Twitter’s remaining talent, after he slashed the workforce by around 75% since taking control of the company in October. Many Twitter employees, including directors, left after Feb. 1, when more pre-takeover shares vested at the takeover price. https://bit.ly/40TtyCs

Fidelity marks down Twitter stake another 7.9%.

Fidelity marked down its stake in Twitter by another 7.9%, the mutual fund giant reported in a monthly update, bringing its total writedown on its stake since its acquisition to 63.5%. Fidelity was one of a number of investors which backed Elon Musk’s US$44 billion buyout last October. Its writedowns reflect how the value of the equity that Musk and his backers got has shrunk since the deal, reflecting both the decline in Twitter’s ad business and overall market declines. Judging by where comparable stocks are trading, however, Fidelity hasn’t marked Twitter down enough. Applying a comparable multiple to Twitter’s expected 2023 revenue implies an enterprise value for the company that is little more than its debt, which means the equity is nearly worthless. https://bit.ly/3ZxHaSA

Virgin Orbit fails to secure funding, will cease operations and lay off nearly entire workforce.

Virgin Orbit is ceasing operations “for the foreseeable future” after failing to secure a funding lifeline, CEO Dan Hart told employees during an all-hands meeting Thursday afternoon. The company will lay off nearly all of its workforce. “Unfortunately, we’ve not been able to secure the funding to provide a clear path for this company,” Hart said, according to audio of the 5 p.m. ET meeting obtained by CNBC. “We have no choice but to implement immediate, dramatic and extremely painful changes,” Hart said, audibly choking up on the call. He added this would be “probably the hardest all-hands that we’ve ever done in my life.” The company will eliminate all but 100 positions, amounting to about 90% of the workforce, Hart said, noting the layoffs will affect every team and department. In a securities filing, the company said the layoffs constituted 675 positions, or approximately 85%. Shareholders unloaded the stock in extended trading Thursday, with shares selling off more than 40% after the announcement. Virgin Orbit stock closed at 34 cents a share at the end of the regular session, having fallen 82% since the beginning of the year. https://cnb.cx/3K52IAg

Disney cuts metaverse division as part of broader restructuring.

Walt Disney Co. has eliminated its metaverse division as part of staff cuts that promise to reduce head count by around 7,000 across the company over the next two months. CEO Bob Iger said Monday that those layoffs would begin this week. Disney’s next-generation storytelling and consumer experiences unit, the small division that was developing metaverse strategies, looks like it’s one of the first to go. http://bit.ly/3U0dRq

EA is laying off 6 percent of its workers.

Electronic Arts is laying off around 6 percent of its workforce. In a blog post published on Wednesday, EA CEO Andrew Wilson says the job cuts come as the game publisher looks to reevaluate its investment strategy and reduce office space. Affected workers will receive severance pay, healthcare, and transition services. According to an 8-K form filed with the Securities and Exchange Commission, EA will incur around US$170 million to US$200 million in charges related to the layoffs and restructuring. http://bit.ly/3KvVhDX

Alibaba stock jumps 10% as the Chinese tech giant begins its biggest reorganization ever and eyes new IPOs.

Shares of Alibaba Group Holding jumped 10% Tuesday following the company’s announcement that it would begin its largest restructuring ever. The news comes just a day after cofounder Jack Ma was seen in China for the first time in nearly a year after Beijing’s crackdown on top tech firms. Alibaba plans to divide its business into six independently operated entities: cloud, Chinese e-commerce, global e-commerce, digital mapping and food delivery, logistics, and media and entertainment. Each division will have its own chief executive and board of directors, and each will be able to raise funds and pursue initial public offerings when ready. http://bit.ly/42VMB0I

Alphabet’s DeepMind and Google Brain set aside rivalry, target OpenAI.

Alphabet’s two big artificial intelligence labs, DeepMind and Google Brain, are setting aside longstanding rivalries to go after a common enemy, OpenAI, The Information reported. Employees from both labs are working together to develop software to rival OpenAI’s GPT-4, a large-language model that powers services such as ChatGPT, a chatbot that has become a hit. The two labs didn’t have much of a choice: Each wanted to develop their own large-language model but the company determined the computing power necessary to handle both efforts would have been too great, the report said. The new joint effort, called Gemini internally, comes as Google’s Bard chatbot, the company’s effort to compete head-on with ChatGPT, has faced challenges. And the release of Bard was also marred internally by the resignation of a prominent Google AI researcher who had warned Alphabet CEO Sundar Pichai and other executives that Bard was being trained using ChatGPT data, the report said. The researcher quit in January and joined OpenAI. https://bit.ly/3lWaNPK

Microsoft now claims GPT-4 shows ‘sparks’ of general intelligence.

Microsoft is betting heavily on integrating OpenAI’s GPT language models into its products to compete with Google, and, the company now claims, its AI is an early form of artificial general intelligence (AGI). On Wednesday, Microsoft researchers released a paper on the arXiv preprint server titled “Sparks of Artificial General Intelligence: Early experiments with GPT-4.” They declared that GPT-4 showed early signs of AGI, meaning that it has capabilities that are at or above human level.  http://bit.ly/3lZhNeL

Bill Gates says self-driving cars will be as revolutionary as the PC after riding in one.

The Microsoft cofounder dedicated his most recent blog post to the budding world of autonomous vehicles, predicting that the technology will reach “a tipping point” within the next decade. Once cars become truly self-driving, he said, they’ll be as revolutionary as the personal computer. “When it happens, AVs will change transportation as dramatically as the PC changed office work,” Gates wrote. He recently took a ride in an autonomous vehicle developed by Wayve, a UK startup, and appeared impressed. He called the experience “fantastic,” though he noted in his blog post that the human safety driver beside him took control of the car several times. https://bit.ly/3GweG5h

Elon Musk’s Neuralink seeking partner for clinical trials.

Elon Musk’s brain-machine company, Neuralink, has reportedly approached Barrow Neurological Institute, one of the premier neurosurgery centers in the United States, as a potential partner for clinical trials. The information is reportedly shared by people familiar with the matter. The sources, who requested to be anonymous, told Reuters that Neuralink has been talking with Barrow to help it with its human trials. The sources, however, noted that the talks might not lead to a partnership. Neuralink is reportedly exploring a potential collaboration with other centers as well. Neuralink has been working on brain implants since 2016, with the goal of treating conditions like paralysis and blindness. Elon Musk has been quite optimistic about Neuralink’s potential, and the company has successfully implanted its devices in animals. The company’s technology is yet to be tested on humans, however.As per previous reports, Neuralink reportedly faced a setback when the US Food and Drug Administration (FDA) allegedly rejected its application for human trials, citing safety concerns. The company has been working to address these concerns, but it remains uncertain when or if it will succeed, the publication noted. https://bit.ly/3ZAoem6

Apple reportedly demoed mixed-reality headset to executives in the Steve Jobs Theater last week.

Apple showcased its mixed-reality headset to the company’s top 100 executives in the Steve Jobs Theater last week, according to Bloomberg’s Mark Gurman. In the latest edition of his “Power On” newsletter, Gurman explained that the “momentous gathering” is a “key milestone” ahead of the headset’s public announcement planned for June. The event was intended to rally Apple’s top members of staff around the company’s next major platform. Senior Apple executives have apparently gotten a peek at the headset every year since 2018, but these demonstrations were discreet looks at the project’s progress rather than showcases of the complete device. Situated at the Steve Jobs Theater, the latest preview was reportedly a far more significant event, being “polished, glitzy, and exciting.” While anticipation of the device’s launch is growing inside Apple, Gurman added that the device is likely to launch with several potential issues: “Moreover, the device will start at around US$3,000, lack a clear killer app, require an external battery that will need to be replaced every couple of hours and use a design that some testers have deemed uncomfortable. It’s also likely to launch with limited media content.” As a result, Apple executives are said to be “striking a realistic tone within the company” with the understanding that “this isn’t going to be a hit product right out of the gate,” potentially following a similar trajectory as the Apple Watch instead. The first version of the device “will look like a dud next to the company’s existing products,” Gurman believes, but it is still “likely to make Apple the market leader in mixed reality within a few months.” Executives expect consumer interest to grow as subsequent iterations of the headset launch at lower price points in the future. https://bit.ly/42XUm63

Apple delays headset production to third quarter.

The waiting game for Apple’s much anticipated mixed reality headset will continue. Ming-Chi Kuo—a Taiwan-based analyst known for his deep contacts within Apple’s supply chain—said in a tweet that Apple has pushed back its mass production plans for the headset to the third quarter of this year, a delay of one to two months. Previously, Bloomberg had reported that Apple was aiming to announce the headset at its annual developer conference in June. Kuo said that production delay “adds uncertainty” to the headset’s appearance at the conference. In his tweet, Kuo said the delay was due to Apple’s lack of optimism about how the market will respond to the device given the economic downturn, the expected high price of the device (around US$3,000) and design compromises the company has had to make to the product, among other things. https://bit.ly/42VQqTz

Zoom adds OpenAI productivity features, launches digital assistant.

Zoom announced it is working with OpenAI to incorporate new features for its productivity applications, including a new AI-powered digital assistant that handles tasks like summarizing chat conversations and generating content for emails and meetings. But Zoom isn’t being too specific about how it uses OpenAI’s software, instead characterizing its adoption as part of a broader push into AI that includes machine learning models that Zoom designed itself. Salesforce earlier this month struck a similar tone in announcing EinsteinGPT, a set of OpenAI-fueled generative AI features for its applications. Salesforce and Zoom seem eager to tap into the excitement over ChatGPT without making their own AI features seem lackluster by comparison. The digital assistant could help Zoom solidify itself as a productivity platform on par with Microsoft and Google, both of which have recently announced generative AI features for their offerings. In a related move, Zoom launched new software that lets users access their Google and Microsoft email from within the Zoom application. https://bit.ly/3G9k7Xl

Netflix appears to be working to bring games to TV with the iPhone as a controller.

Netflix is working on a new feature that could bring its mobile games to the TV. Based on code hidden within Netflix’s iOS app, the company may allow iPhones to be used as video game controllers. The code was discovered by app developer Steve Moser and reported by Bloomberg. One line of code says, “A game on your TV needs a controller to play. Do you want to use this phone as a game controller?” The findings point to a major move from the company as it shifts from smartphones and tablets to the big screen. Netflix has previously admitted that it wants to bring games to more devices. “As you can imagine, we do want Netflix games to be playable on every Netflix device that you have,” Leanne Loombe, Netflix’s VP of external games, said last week. Plus, Netflix posted a job listing last November for a game director to work on a AAA PC game. The company also said it would expand into cloud gaming, according to Netflix VP of Gaming Mike Verdu, speaking at TechCrunch Disrupt in October 2022. http://bit.ly/3Km6bMa

Meta to allow European users to opt out of personalized ads.

Meta Platforms will allow European users to opt out of personalized advertising on Facebook and Instagram after the European regulators in January fined Meta 390 million Euros for unlawfully forcing users to consent to personalized ads in its apps. Meta appealed the ruling but must comply in the interim, the Wall Street Journal reports. Under the change, users who want to opt out of targeted ads based on their in-app activity will be able to submit a request through an online form, which Meta will evaluate, according to the Journal. Meta’s advertising business slowed in recent years as the economy weakened and after Apple implemented privacy restrictions limiting targeted advertising based on iPhone users’ browsing activity. The EU decision takes aim at how the company uses data from users’ activity within Meta’s apps. Meta’s terms of service for Facebook and Instagram currently require users to opt in to personalized advertising by default. https://bit.ly/3GweJht

Apple Pay Later launching today: Here’s how it works.

Apple has announced that its long-awaited Apple Pay Later financing service will begin rolling out today. At launch, Apple says that it will “begin inviting select users to access a prerelease version of Apple Pay Later.” It will launch to “all eligible users in the coming months” in the United States. For those unfamiliar, Apple Pay Later is a new financial service from Apple that will allow customers in the United States to split purchases into four equal payments across six weeks, with no fees or interest. The feature will be available anywhere Apple Pay is accepted online or in-app. http://bit.ly/40ta088

Bitcoin storms toward its strongest quarter in 2 years with a 72% jump, outperforming the Nasdaq and gold.

Bitcoin has stormed to a 72% gain over the last three months and is on track for its strongest quarter in two years. The token has outperformed both the Nasdaq 100 and gold, which are up 15% and 9%, respectively, in the same stretch. Bitcoin’s rally is also exceeding those of other cryptos, including ether’s 50% jump. On Wednesday, bitcoin hovered around US$28,360, after starting the year at about US$16,600. The rally has pushed the market value for the world’s largest cryptocurrency to US$542 billion. http://bit.ly/40BspzK

CFTC sues Binance for violating trading and compliance laws.

The Commodity Futures Trading Commission is suing Binance and its CEO Changpeng Zhao for violating U.S. trading and compliance laws, according to a lawsuit filed Monday. The suit, against the international version of Binance, is the first major lawsuit from a U.S. regulator against the company but may not be the last. The CFTC alleges Binance has been operating an unregistered derivatives exchange and has failed to implement customer compliance procedures. The suit alleges that a significant portion of Binance’s trading volume and profits have come from its “extensive solicitation of and access to customers located in the United States.” Binance operated in the U.S. until 2019, when it exited the country. Zhao then set up a new exchange, Binance.US, that is supposed to be independent from the global exchange. Media reports have disclosed close ties between the exchanges. A spokesperson for Binance did not immediately respond to a request for comment. Binance has also reportedly been under investigation by the U.S. Department of Justice since 2018 about whether it violated anti-money-laundering laws. https://bit.ly/3ZA2E1k

Jeep’s CEO doesn’t think there are enough raw materials on earth to meet electric-car demand.

Stellantis’ CEO doesn’t think there are enough raw materials readily available to meet electric vehicle needs. “We know that we need lithium,” Carlos Tavares, chief executive of Stellantis (which encompasses brands like Jeep, Dodge, Chrysler, Ram, and more) said Wednesday during the automaker’s first annual Freedom of Mobility Forum meeting. Tavares said the 1.3 billion gas-powered cars on the roads need to be replaced with clean mobility. “Not only the lithium may not be enough, but the concentration of the mining of lithium may create other geopolitical issues.” Tavares, long a skeptic of a global transition to electric vehicles, first warned of EV battery and raw material shortages hampering the industry’s lofty goals on EVs in May 2022. For Stellantis specifically, Tavares has said that some of the markets the company operates in just don’t make sense for EV sales at the moment, citing problems like affordability and lack of infrastructure. Lithium, cobalt, and nickel mining executives have already expressed concern. http://bit.ly/435uIN4

Carbon capture will probably make electricity more expensive.

Keeping coal and gas power plants alive while purporting to tackle climate change will likely make electricity more expensive for consumers, a new analysis warns. Fossil fuel companies have been eager to deploy technologies that filter planet-heating carbon dioxide out of power plant emissions. But relying on the technology, called carbon capture and storage (CCS), is a risky venture and consumers are likely to bear the costs. The cost of electricity from power plants outfitted with carbon capture devices is at least 1.5 to 2 times more expensive than other alternatives, according to a new report from the nonprofit Institute for Energy Economics and Financial Analysis (IEEFA). It’s much more affordable to turn to renewable energy like solar and wind instead. http://bit.ly/40LMWRu