Q2 2022 Triterras Inc Earnings Call

We provide a digital one-stop-shop platform for trade, trade finance, and supply chain finance to SMEs through our Kratos platform, which is a transformative blockchain-enabled digital platform facilitating global bilateral trade, trade finance, supply chain finance, and related value-added services.

Okay.

Good evening.

Welcome to try terrorists conference call to discuss the financial results for the six months ended August 31 2021 my.

My name is to Wanda and I will be your operator for today's call.

Joining us for today's presentation on the company's chairman and Chief Executive Officer shall Renova Carneiro, Chief Financial Officer Albert Tan.

In our opinion, Triteris' business model of bringing new trade finance lending to underserved or underbanked market segments also provides a world-positive social impact. Additional trade finance lending is a critical economic accelerator in emerging market economies, so our very core mission serves the common good.

Chief Technology Officer, Sherri, that's ready executive Vice President, Jim grow and Vice President of financial reporting probably majors.

Following their remarks, we will address questions that have been submitted to the court to the company.

Now I'd like to turn the call over to executive Vice President Jim Ground. Sir you May proceed.

Now I want to highlight several accomplishments over the past several months. Our auditor successfully completed the independent audit of our financial statements for the fiscal year ending, ended February 28th, 2021 on March 7th, 2022 when our auditor issued to us an unqualified opinion.

Thank you to Wanda and thank all of you for joining us on the conference call today.

Before we start I'd like to read the following in regards to our forward looking statements disclaimers and note to investors disclaimers. Please note that certain information discussed on the call today.

Forward looking statements about future events try terrorists future business strategy and future financial and operating performance. These forward looking statements are only our beliefs expectations estimates and predictions that are subject to risks uncertainties and assumptions that are outside.

The audit and associated filing of our Form 20-F with the SEC brought our financial filing status to a sufficient level to proceed with an application to trade our securities on the OTCQX exchange. OTC Markets is still reviewing our application as of today. We view this as a bridge in connection with our efforts to once again list our shares and warrants on NASDAQ.

A try terrorists control and difficult to predict and may cause the actual results to differ materially from those stated or implied by those statements.

And although we cannot make any assurances regarding our success and or timing of a NASDAQ relisting.

Certain of these risks and assumptions are discussed in <unk> SEC filings, but they are not exclusive.

We can state, however, that the filing of our results for the six-month period ended August 31st, 2021. Our financials are current.

These forward looking statements reflect management's beliefs expectations estimates and predictions as of the date of this live broadcast April 25th 2022 and tried terrorists undertakes no obligation to revise or update any forward looking statements. After this call except as required by law.

We have scheduled our 2021 Annual General Meeting for May 5th, 2022. We will also continue to work with our independent auditor to keep our financial reporting up to date, including an anticipated subsequent filing of our annual report on Form 20-F for the fiscal year ended February 28th, 2022, and related audited financials by the end of June , 2022.

Joining me on the call today are our chairman and CEO shredded Roscoe narrow our chief Financial Officer, Albert Tan, Our Chief Technology Officer, Sri bus that Eddie and our Vice President of financial reporting Perry mangroves predict earnings call I am first going to provide a high level overview.

Now, as we've recently disclosed in our most recent Form 20-F, our industry has faced some significant challenges driven by the recurring waves of COVID-19.

Try terrorists or business model and recent achievements and challenges than Kerry will review the financial results, we announced last week.

As you all are probably aware, global supply chain disruptions have substantially extended business transaction cycle times in international trade. These extended cycle times have had a direct impact on the liquidity situation of many SME traders.

Our CEO Shredder boss will then provide an update on the market and our growth strategy and Sri will wrap up with some of the innovation occurring tried tariffs. We will then address questions set ahead of time per the instructions provided on our April 20th earnings press release.

For some of our clients, this caused some short-term liquidity issues and forced a reduction in their level of trading activity.

I want to remind everyone of who we are trying terrorists. Most importantly, we are a business that is very much in business and our foundational principles remain to apply advanced blockchain technology to transform trade and trade finance for small and medium sized enterprises.

For others in the trading community, the liquidity crunch became an existential threat to their business and caused certain of them to suspend operations.

The Kratos community of traders was certainly not immune to these impediments to their respective businesses.

That means.

We also observed that there was a significant reduction in the availability of trade credit insurance in the last 12 to 14 months. We believe that this had a direct impact in reducing the level of trade finance loans available to SME traders. The lack of trade credit insurance would have had a direct impact on specialty trade finance funds where their very business model was reliant on widespread availability of trade credit insurance.

We believe that Digitization of the fundamentally paper based systems exemplified in today's trade and trade finance transactions will drive efficiencies lower costs reduce transaction cycle times and achieve a monumental improvement and the sustainability aspects of our industry.

We provide a digital one stop shop platform for trade trade finance and supply chain finance to SME to our Kratos platform, which is a transformative blockchain enabled digital platform facilitating global bilateral trade trade finance supply chain finance.

Estimates in the trade finance shortfall for SMEs have brought in from, at one end of the estimate, 1.7 trillion to 4.5 trillion U.S. dollars.

Ultimately, we believe the global supply chain issues will be resolved as we have seen in prior cycles, but the business environment has been and remains extremely challenging for SME traders.

And related value added services.

Our opinion try terrorists business model of bringing new trade finance lending to underserved or under banked market segments. Also provides a world positive social impact additional trade finance lending is a critical economic accelerator in emerging market economies. So.

We believe that Triteris has fared well in the face of these headwinds, although we have not been unaffected by their impacts. We view 2022 as a largely a transitionary year for our business where revenue growth will be challenged.

Our very core mission serves the common good now.

We believe these recent disruptions in the industry may create long-term opportunities for Triteris to take increased market share and emerge with a much larger network to capitalize on improved industry fundamentals. We're also making noteworthy progress on our broader corporate objectives of putting past legal and compliance issues in the rearview mirror and engaging with a reinvigorated focus on our business.

Now I wanted to highlight several accomplishments over the past several months our auditors successfully completed the independent audit of our financial statements for the fiscal year ending ended February 'twenty eight 2021 on March seven 2022, what our auditors issued too.

US an unqualified opinion, the audit and associated filing of our form 20-F with the SEC brought our financial filing status to a sufficient level to proceed with an application to trade our securities on the OTC Qf's exchange OTC markets is still reviewing our app.

Location is up today, we view this as a bridge in connection with our efforts to once again, let's start shares and warrants on NASDAQ and although we cannot make any assurances regarding our success <unk> timing of the NASDAQ listing we can state however that the filing of our results for the six month period.

At August 30, <unk> 2021 our financials. Our current we have scheduled our 2021 annual general meeting for me. The 'twenty 'twenty. Two we will also continue to work with our independent auditor to keep our financial reporting up to date, including an anticipated.

This decrease is primarily due to severe global supply chain constraints and finance limitations in the broader trade finance industry.

Subsequent filing of our annual report on form 20-F for the fiscal year ended February 28, <unk> 22 and related audited financials by the end of June 2022 .

It's important to note the trade finance volume represented 36% of total volume during the six months ended August 31, 2021. This compared to 21% in the comparable prior year period, which demonstrates that more users of our trade discovery submodule are seeking financing use in our trade finance submodule compared to the corresponding period last year.

Now as we recently disclosed in our most recent form 20-F, our industry has faced some significant challenges driven by the recurring waves of COVID-19. As you all are probably aware global supply chain disruptions have substantially extended business transaction cycle.

Our average transaction fee percentage for the six months ended August 31, 2021, was 0.57%, which is higher than the comparable prior year period of 0.48%.

Times in International trade these extended cycle times and he had a direct impact on the liquidity situation of many SME traders for some of our clients. This caused some short term liquidity issues and of course the reduction in their level of trading activity for others in the trading community the liquidity crunch.

Again, this increase is driven by the increase in volume in our trade finance submodule compared to the corresponding period last year.

For the six months ended August 31, 2021, our revenues were $22.9 million compared to $23.7 million for the comparable period of last year. The modest decrease was due to the aforementioned global supply chain constraints and trade finance limitations in the industry, partly offset by higher transaction fee percentage.

Became an existential threat to their business and caused certain of them to suspend operations. The kratos community of traders, which certainly not immune to these impediments to their respective businesses.

We also observed that there was a significant reduction in the availability of trade credit insurance in the last 12 to 14 months. We believed that this had a direct impact in reducing the level of trade finance loans available to SME traders. The lack of trade credit insurance would've had a direct impact on specialty trade.

Total operating expenses for the six months ended August 31, 2021 were 20.2 million compared to 6.4 million for the comparable period in the prior year. The increase was primarily attributable to elevated legal and consultancy expenses of 6.9 million and an increase in staff expenses primarily related to the build out of our business development organization and additional staff to support compliance activities with being a public company.

<unk> funds, where they're very business model was reliant on widespread availability of trade credit insurance.

Estimates in the trade finance shortfall for Smes have brought in from at one end of the estimate one seven trillion to $4 five trillion U S. Dollars. Ultimately, we believe the global supply chain issues will be resolved as we have seen in prior cycles, but the business environment.

We also took an impairment charge of $3.9 billion on trade receivables as certain of our customers are struggling with liquidity from the impacts COVID-19 is having on their business.

Net income for the six months ended August 31, 2021 totaled $27.3 million.

<unk> has been and remains extremely challenging for SME traders, we believe that tried terraces spirit well in the face of these headwinds, although we have not been unaffected by their impacts. We view 2022 was a largely a transition every year for our business where revenue growth will be challenged we believe these.

or $0.35 per ordinary share compared to net income of $14.2 million or $2.84 per ordinary share for the corresponding period in 2020.

The earnings per share of $2.84 for the six months ended August 31, 2020 was prior to the business combination, when we only had approximately 5 million weighted average shares outstanding, compared to the six months ended August 31, 2021, where we had approximately 77 million weighted average shares outstanding.

Recent disruptions in the industry may create long term opportunities for <unk> to take increased market share and emerge with a much larger network to capitalize on improved industry fundamentals were also making noteworthy progress on our broader corporate objectives of putting past legal and compliance issues.

Impacting the net income of $27.3 million for the six months ended August 31, 2021, was a $25.3 million non-cash gain related to the change in fair value of our warrant liabilities, as we're required to record the changes in the fair value of warrants in our financial state.

In the rear view mirror and engaging with their reinvigorated focus on our business as we have previously announced the audit Committee of our board of Directors completed an investigation last year that concluded that the allegations contained in the January 2021 short report lacked either factual support for them.

We will continue to record non-cash charges in the fair value of our warrants until such time as the warrants are either exercised or expire. But I want to emphasize this is a non-cash item.

Material basis, I will now pass the microphone over to my colleague Perry to walk us through the financials for the six months ended August 31 2021.

Also impacting net income for the six months ended August 31 2021 was a 3.9 million impairment loss on trade receivables.

Thanks, Jim.

Let's start first with trade transaction volume.

Adjusted EBITDA, which is a non-IFRS measure for the six months ended August 31, 2021, totaled $4.1 million compared to $17.9 million in the prior year comparable period. The decrease in adjusted EBITDA was primarily due to the increase in general and administrative expenses and the impairment charge on trade receivables.

The first six months ended August 31, 2021 we had trade transaction volume of 4.03 billion, which was an 18, 8% decrease over the comparable prior year period.

This decrease was primarily due to severe global supply chain constraints and finance limitations in the broader trade finance industry.

More information regarding our use of adjusted EBITDA, including a reconciliation of adjusted EBITDA to net income, can be found in our earnings release.

It's important to note the trade finance volume represented 36% of total volume during the six months ended August 31, 2021, as compared to 21% in the comparable prior year period, which demonstrates the power users of our trade discovery sub module or seeking financing into our trade finance a module.

I will now pass it over to Shrinivas to discuss our market opportunities and growth strategy.

I remain very optimistic about the long-term prospects for triterion.

Compared to the corresponding period last year.

We have solid core technology and have continued to execute on our business plan and invest in the future of the company.

Our average transaction fee percentage for the six months ended August 31, 2021 was <unk>, five 7%, which is higher than the comparable prior year period of four 8%.

My view is that despite the industry challenges that developed over the last 12 to 18 months,

The future strategic direction of Triteros remains unchanged from what it was at the time of our business combination publication.

This increase was driven by the increase in volume in our trade finance sub module compared to the corresponding period last year.

We are addressing outsized opportunities in underserved markets and we are aggressively executing against those opportunities.

For the six months ended August 31, 2021, our revenues were $22 9 billion.

Get compared to 23 7 million for the comparable period.

First and foremost, our plans have always anticipated that we would endeavor to bring new lenders into the trade finance space. We believe that the Kratos platform actualizes an asset class.

Last year, the modest decrease was due to the aforementioned global supply chain constraints and trade finance limitations in the industry, partly offset by higher transaction fee percentage.

that is trade finance loans that can be very attractive for general and alternative credit funds not currently involved in trade finance.

Total operating expenses for the six months ended August 31, 2021 were $20 2 million compared to $6 4 million for the comparable period.

We believe that trade finance lending offers yields and short-term maturity is self-liquidating and low default.

In the prior year, the increase was primarily attributable to elevated legal and consultancy expenses of $6 9 million.

can be implemented with strong structural protections and have low correlation with other asset classes.

And an increase in staff expenses, primarily related to the build out of our business development organization and additional staff to support compliance activities with being a public company.

Internally, we refer to our efforts to attract new institutional lenders as our distribution business.

Secondly, it has always been our plan to expand outside of the limited market of Asia Pacific, referred to as APAC. Trade finance lending to commodity trader clients to a greater expanded scope of clients in varying vertical markets. Financing structures and

We also took an impairment charge of $3 9 billion on trade receivables at certain of our customers are struggling with liquidity from the impacts COVID-19 is having on their business.

Net income for the six months ended August 31, 2021 totaled $27 3 million.

We refer to this growth in new clients, markets and products as our co-origination business.

Or <unk> 35 per ordinary share compared to net income of $14 2 million or $2 84 per ordinary share for the corresponding period in 2020.

We have built out a robust business development team that has expanded our reach beyond commodities to both finished and finished goods with borrowers in APAC, Middle East and North Africa, referred to as MENA, and India, and ultimate buyers in Western Europe , North and South America.

The earnings per share of $2.84 for the six months ended August 31, 2020 was prior to the business combination when we only had approximately 5 million weighted average shares outstanding compared to the six months ended August 31, 2021, where we had approximately 77 million weighted average shares outstanding.

The origination portfolios of opportunities include a wide array of environmental, social, and governance for ESG considerations for lenders who emphasize these in their evaluation.

Impacting the net income of $27 3 million for the six months ended August 31, 2021, with a $25 3 million noncash gain related to the change in fair value of our warrant liabilities as we're required to record the changes in the fair value of warrants in our financial statements.

From a tactical standpoint, as we recognize the emerging challenges in our traditional APAC-centric commodity trade finance business segment, we significantly increased our efforts to put into place the human resources, technology, and business processes to drastically expand both our distribution and organization efforts outside of our original ecosystem.

We will continue to record noncash charges in the fair value of our warrants until such time as the warrants are either exercised or expire, but I want to emphasize this is a noncash item.

Our investment in business development has been substantial. We continue to make significant progress, and I would like to provide you with some examples.

As a part of our announced M&A strategy, we successfully acquired Invoice Bazaar on May 17, 2021. Invoice Bazaar is expected to facilitate a more rapid scaling of the company's supply chain finance business.

Also impacting net income for the six months ended August 31, 2021 was a $3 9 million impairment loss.

On trade receivables.

Adjusted EBITDA, which is a non <unk> measure for the six months ended August 31, 2021 totaled $4 1 million compared to $17 9 billion in the prior year comparable period.

strengthened the executive leadership with experienced trade finance executives and provided us with a geographic presence in MENA.

We have expanded the business development team to focus on sourcing enterprise-level supply chain finance arrangements from both MENA and India to present as opportunities for current and potential lenders on the platform.

The decrease in adjusted EBITDA was primarily due to the increase in general and administrative expenses and the impairment charge on trade receivables.

More information regarding our use of adjusted EBITDA, including a reconciliation of adjusted EBITDA to net income can be found in our earnings release.

The second initiative is the company's first foray into B2B micro-lending through a partnership with e-commerce vendor Zomato. For Triteros, the world of micro-lending through e-commerce partnerships is an exciting new opportunity that could potentially be scaled throughout the world. It is an ideal fit with our mission, that is to bring added liquidity to an underserved market that is actualized by the application of advanced platform technology.

I will note that I will now pass it over to shrink.

To discuss our market opportunities and growth strategy.

Yes.

Thank you Barry and good evening everyone.

I remain very optimistic about the long term prospects for tractors.

Solid core technology and have continued to execute on our business plan.

The lift in the future of the company.

We look forward to updating your business segment dollars. We expect that long-term organic growth will come from attracting new lenders to the platform that can benefit from the advantages of trade finance lending and the facilitation of their entry into asset class with our blockchain-enabled Kratos platform.

My view is that despite the industry challenges that developed over the last 12 to 18 months.

The future strategic direction on stock remains unchanged.

From what it was at the time of business combination public listing.

We are addressing outsized opportunities in them the third market.

We continue to build out our senior-level leadership of experienced institutional finance executives to lead our business development efforts of lender recruitment. Working hand-in-hand with our origination teams, the distribution team brings an extremely compelling value proposition to potential new market entrants.

It aggressively executing against those opportunities.

I would like to recap our strategy.

And for most of our plants have always anticipated that we would endeavor to bring new lenders into the trade finance space.

We believe that the crack those platform actualized as an asset class.

So as to summarize, our growth strategy has always remained consistent, but we have undertaken a tactical pivot to react to the slowdown in our original APAC commodity trade and trade finance business.

Trade finance loans that can be very attractive agenda, and I'll try to put any claims not currently involved in trade finance lending.

We believe that trade finance lending ultra.

Short term maturity.

We are investing heavily in the people, process development, and ever-improving technology to capitalize on what we believe are tremendous opportunities.

Self liquidating has low default rate.

Can be implemented with strong structural protections and have low correlation with other asset classes.

Lastly, we are incredibly proud of the team we have built at Triter. Over the last 18 months, we have made a number of strategic hires within legal, origination, technology, business development, and finance to strengthen and deepen our bench as we look to scale our Kratos platform and drive long-term shareholder value. We are also proud to note that over 50% of our professional employees are

Internally, we refer to our efforts to attract new institutional lenders as our distribution business.

Secondly, it has always been our plan to expand outside of the limited market of Asia Pacific.

In APAC.

Finance lending to commodity trader time, greater expanded scope of clients and radian vertical market.

These hires all have deep experience in their respective fields. We are grateful for their contribution to Tritirus and excited about their future contributions.

I know you can start to weaken expanded geographies.

We reported these growth in new clients markets and product has a record origination business.

Triteron is at its core a FinTech company. We believe that the trade finance industry has significant underinvestment, and in many ways is antiquated industry, ripe for technology business based disruption. We believe that every improving state of our technology will be fundamental to our success.

We have big Copay enrollment business development team that has expanded our reach beyond <unk> to both semi finished and finished goods.

Borrowers think APAC Middle East North Africa Mena unnamed.

On India, and ultimate buyers in Western Europe , North and South America.

With that, I'm proud to introduce our Chief Technology Officer, Sree Patel. Sree, welcome. Thank you. Thank you.

The origination portfolio of opportunities include a white hot.

Minton Shoshonean Goldman.

Our ESG considerations for lenders we emphasize this.

Thank you, Srinivas. I want to spend my time discussing many improvements we have made over the last several quarters within our Kratos platform. Our focus being on agile, evolving enterprise and the strengthening of the tri-terrace team.

<unk>.

From a tactical standpoint has been it could make that much you can tell in just traditional APAC and the commodity trade finance business segment, we significantly increased our efforts to put into place the human resources.

Neurology and business processes to drastically expand over what our distribution automation efforts I would say it up or regional ecosystem.

Triterit envisions using technology as a competitive advantage to deliver value to our clients.

While most of our technology is not visible to our clients, we invest a great deal of human and financial capital on what's behind the curtain.

Investment in business development has been substantial we continue to make significant progress and I would like to provide you with some examples.

As a part of our announced M&A strategy, we successfully acquired a widespread there on May 17 2021.

to create a user-friendly platform to effectuate client growth, profitability, and sustainability.

But that is expected to facilitate a more rapid scaling of the company supply chain finance business.

In the past, we had talked about rolling out newer versions of Kratos every six months to 12 months.

Strengthen the executive leadership with expedience paid for it and they can use.

But we believe that created too much stagnancy in between versions. So we have instead instituted a program of continuous improvements so that we can constantly evolve and improve our platform rather than waiting on more step function changes with longer lead times.

With the geography now presenting me now.

<unk> expanded our business development team to focus on sourcing enterprise level supply chain financing.

From both Mena.

India to prison as opportunities for current and potential lenders on the platform.

The second initiative is the company's first story into beat to be micro lending to a partnership with e-commerce vendors of macro.

we are ultimately focused on delivering more benefits to our customers in a shorter timeframe while optimizing development and integration costs.

The world of micro lending through E. Commerce partnerships is an exciting new opportunity.

It could potentially be scared toward devoted you didn't it is an ideal fit with our mission that is to bring added liquidity to an underserved market.

We also believe we have made significant progress in improving the technology of our Kratos platform.

Actualized by the application of advanced platform technology.

We have fully transitioned from the public Ethereum blockchain ledger to an AWS-managed hyperledger blockchain and achieved ISO 27001-2013 certification.

We look forward to updating you as this business segment.

We expect that long term organic growth will come from attracting new lenders to the platform that can benefit from the advantages of trade finance lending under the application of their entry into asset class with the blockchain enabled <unk> platform.

We have also implemented a process called DevSecOps.

which is short for Development, Security, and Operations.

We continue to build out our senior level leadership of expediency institutional financings.

DevSecOps is an automated process that identifies security and scalability issues at every phase of the software development lifecycle from initial design through integration, testing, and delivery.

To lead our business development efforts of lender recruitment working hand in hand without origination teams that distribution team brings an extremely compelling value proposition to potential new market entrants.

So as to summarize our growth Stephanie celebrates remained consistent but we have.

DevSecOps ties into our strategy of being an agile organization, as it should allow us to reduce cycle time and cost in improving the creator's platform.

But we have undertaken the technical people to react to the slowdown in the original APAC Kubota get cleared and trade finance business.

We are investing heavily in the.

In closing, I would like to provide a glimpse into one of the technology areas that we believe could provide further differentiation and value to our creative platform.

Process development and ever improving technology to capitalize on what could we be electric windows of opportunities.

Lastly, we are incredibly proud of the team we have been trying to over the last 18 months. We have made a number of strategic hires with illegal origination technology business development and finance.

We believe that the application of advanced machine learning could provide significant automation to our users, especially lenders.

<unk> deepened our bench as we look to scale, our crackers platform and drive long term shareholder value.

in the machine-driven review and validation of information and data submitted on the platform.

I'd also note that over 50% of the whole professional employees are women.

This could be particularly impactful as the platform expands to include micro-lending applications for our lenders as the transaction sizes decrease but the volume of the transaction increases.

How does that all have deep experience in their respective Pete yeah.

We are grateful for their contribution to trade and executive about their future contributions.

But I get it.

Core Tech company, we believe that the trade finance industry has significant under investment.

This particular area demonstrates how we endeavor to create a strong linkage between our ongoing technology development and the tactical needs of our business development team.

And in many ways.

Quaker industry ripe for technology business.

We believe that ever improving state of art technology gives you been fundamental to our success.

We look forward to providing you with such updates in the future. Now, I will turn it over to Jim.

With that I am proud to introduce our Chief Technology Officer.

Sure.

Thanks, Sheree. This concludes our prepared remarks and we are now ready to address the questions that were submitted through the appropriate platform. We did attempt to aggregate similar questions so we can cover as much information as possible today.

Okay.

Thank you Tina.

Want to spend my time discussing many improvements we have made over the last several quarters within our previous platform, our focus being on agile evolving enterprise and the strengthening of the trade.

So the format is going to be, I am going to read the question and different members of the team will answer them. We're going to start with some capital markets questions.

T.

Hi, Dennis envisions using technology as a competitive advantage to deliver value to our clients.

Most of our technology is not visible drug claims, we invest a great deal of human and financial capital on what's behind the curtain.

Has the NASDAQ filing been made, and do you anticipate their review taking longer than the typical four to six weeks?

To create a user friendly platform to attract Hewitt client group profitability.

I will be providing the answer on this one. To meet the minimum NASDAQ listing rules, we will need to complete our annual general meeting, which is scheduled for May 5th. We cannot submit an application before then.

<unk> ability.

In the past, we had talked about rolling out new versions of <unk> every six months to 12 months.

We also recognize that it's critically important for the company to file its annual report with audited numbers for the fiscal year ended February 2022 by end June 2022. The company has taken a number of steps to improve our financial controls, reporting and governance capability.

But we believe that created too much stagnant in between.

So we have instead instituted a program of continuous improvement.

We can constantly you won and improve our platform rather than waiting on more step function change here.

With longer lead times.

We're hopeful that these actions will result in a favorable outcome from NASDAQ. However, we are not able to make any estimates on how long the process may take.

We are ultimately focused on delivering more benefits to our customers.

Charter timeframe, while optimizing development and integration costs.

Second question, what is the timeframe for being listed on OTCQF?

We also believe we have made significant progress in improving the technology of our creative platform.

The answer is that our application has been submitted, and at this point, approval is in the hands of OTC markets. However, timeframes do vary.

We have fully transitioned from the public ethereum blockchain ledger.

Question three, given the effort and cost required to relist on the NASDAQ, does the board agree that such current circumstances warrant a dual track process which compares such relisting with a buyout?

AWS managed hyper ledger block two and achieved ISO 27001 2013 certification.

We have also implemented a process called <unk>.

We are confident that the answer, excuse me, the answer to that question is, we are confident that the relisting plans that we have communicated to the market are the most prudent course of action. The board will consider alternatives as they deem fit from time to time.

We do short term.

<unk> security and operations.

<unk> is an automated process that identify security and scalability issue.

And a big piece of the software development lifecycle from initial design through integration testing and delivery.

Given the presumably elongated path to generate shareholders value through business performance and the apparently significant investments required to organically realign the company and its growth path, is the board open to consider, given the circumstances, alternative paths for shareholder value creation, including soliciting a buyout offer?

Depth of comp ties into our strategy of being an agile arguably issue.

It should allow us reduce cycle times and costs and improving the creative platform.

In closing I would like to provide a glimpse into one of the technology that we believe could provide further differentiation and value to our previous platform.

The answer, we believe it's helpful to point out that over 60% of the shares of the company are owned by our chairman and CEO , Mr. Canero. Clearly, there is strong evidence of alignment of interest. The board will act in the best interest of the shareholders of the company.

We believe that the application of advanced machine learning.

Could provide significant automation to our users, especially lenders in.

In the machine driven review and validation of information and data submitted on the platform.

The next question, is the company considering buying back their share?

This could be particularly impactful as the platform expands to include micro lending applications with our lenders as the transaction sizes degrees, but the volume of the transaction.

I will be providing the answer. We get a number of questions on stock buybacks. First, as I'm sure some of you may know, company stock buyback...

This particular area demonstrate how we endeavor to create a strong linkage between our ongoing technology development and the tactical needs of our business development teams.

stock buyback programs are highly regulated.

And those processes control the timing and the execution of any stock buyback.

In our view, the company should not consider a buyback program until our stock is freely trading and until after we have filed the annual report for the fiscal year ended February 22, which we expect to file by the end of June 22.

We look forward to providing you with updates in the future.

Now I will turn it over to Jim.

Thanks, Sri This concludes our prepared remarks, and we're now ready to address the questions that were submitted through the appropriate platform.

Secondarily, the company would generally not discuss its plans in advance of such a program before it's formally announced. We do receive numerous emails requesting information or requesting an opportunity to discuss stock buybacks plans. And given the above, we have no choice but not to respond.

We did attempt to aggregate similar questions. So we can cover as much information as possible today.

Yeah.

So the format is going to be I am going to read the question and different members of the teams will of the team will answer them, we're going to start with some capital markets questions.

But having said that, we have a highly competent board, highly competent outside advisors, legal advisors, and investment bank.

Has the NASDAQ filing has been made and do you anticipate their review taking longer than the typical four to six weeks.

they will endeavor to take actions that are in the best interest of the shareholders over the long term.

I will be providing the answer on this one to meet the minimum NASDAQ listing rules, we will need to complete our annual general meeting, which is scheduled for may 5th we cannot submit an application. Before then we also recognize that it's critically important for the company to file its annual report with <unk>.

The last capital markets question, which I received from a number of investors, are you going to sue Nexia? The answer is, on advice of counsel, we do not comment on potential litigation. And I'm sure many of you understand the reasons for that. Active litigation will be commented on from time to time.

The numbers for the fiscal year ended February 2022 by end June 2022, the company has taken a number of steps to improve our financial controls reporting and governance capabilities. We're hopeful that these actions will result in a favorable outcome from Nasdaq.

We'll now turn our attention to some of the financial questions.

The company spent $5 million for 2020 and $5 million for the first Q of 2021 for legal fees. Question, don't you think it's too much and explain for details what the money was spent for? I'm going to turn that question over to my colleague, Perry.

However, we are not able to make any estimates on how long the process may take.

Second question, what is the timeframe for being listed on OTC <unk>.

Thanks, Jim. So although we recognize that the expenditures, the legal fees, and the related consulting work were high.

The answer is that our application has been submitted and at this point approval is in the hands of OTC markets. However, timeframes do vary.

The company had no choice but to make those expenditures. The P2P short report raised allegations that the board believed should be investigated, resulting in the Audit Committee of the Board of Directors launching an independent investigation to review those allegations.

Question three.

Given the effort in cost required to re list on the NASDAQ does the board agree that such current circumstances warrants a dual track process, which compares such we listing with a buyout.

These types of investigations are quite extensive and costly. As you may have seen, the investigation concluded that, and I quote from our press release, the allegations contained in the short report lacked either factual support or material base.

We are confident that the answer excuse me the answer to that question is we are confident that the re listing plans that we have communicated to the market are the most prudent course of action.

Accordingly, the audit committee has concluded that those allegations do not require additional action by the company.

<unk> will consider alternatives as they deem fit from time to time.

The other major area of legal fees has to do with the shareholder class action lawsuit. It is entirely appropriate for the company to defend itself. We will provide updates on the class action lawsuit as and when there are materials developed.

The next question given the presumably elongated path to generate shareholders value through business performance and the apparently significant investments required to organically realigned the company and its growth path is the board open to consider given the circumstances.

Thank you Perry. The next question is the development costs of $4.9 million in the six months, is this expected to be the normal half year yearly expenditure for updates and integration or are costs front loaded? I'm going to ask my colleague Alvin Pan our CFO to respond.

Turning to paths for shareholder value creation, including soliciting the buyout offer.

The answer we believe it is helpful to point out that over 60% of the shares of the company are owned by our chairman and CEO . Mr. Cordero clearly there is strong evidence of alignment of interests. The Board will act in the best interest of the shareholders of the company.

Thanks Jim. This development course represents upgrades to our existing systems and also the addition of new modules. The development course and actual course are not front-loaded.

The next question is the company considering buying back their shares.

Thank you, Alvin. Next question. The uplift in staff expenses, bonuses and staff increases during the six months materially impacted the cash bank balance by my calculations. What IRR has been forecast from this investment? Perry, would you please respond?

I will be providing the answer we get a number of questions on stock buybacks first as I'm sure. Some of you May know company stock buyback.

Stock buyback programs are highly regulated processes and those processes control the timing and the execution of any stock buyback.

Yes, so certainly there have been an increase in staff costs in general.

These increases are tied directly to building out the company's capabilities to capitalize on what we feel are outsized opportunities with the ultimate goal of growing revenue and earnings.

In our view the company should not consider a buyback program until our stock is freely trading and until after we have filed the annual report for the fiscal year ended February 22, which we expect to file by the end of June 22, secondarily. The company would generally not discussed.

The main reason for the impact on cash are the investments made in trade credit partners fund, the acquisition of Invoice Bazaar.

development expenditures related to Kratos platform as well as legal and professional costs incurred during the course of the investigation and legal related activities disclosed in our various filings. As outlined in our filings, many of these cash expenditures are expected to be non-recurring in nature.

Its plans in advance of such a program before it's formally announced we do received numerous emails requesting information or requesting an opportunity to discuss stock buybacks plans and given the above we have no choice, but not to respond, but having said that we have a highly competent.

Thanks Perry. Another question, can the company provide guidance on FY22 revenues and profits? Alvin, would you please respond?

Board highly competent outside advisers legal advisers and investment bankers. They will endeavor to take actions that are in the best interest of the shareholders over the long term.

Right. At this stage, we are not providing any guidance on FY22 revenues or profits.

The last capital markets question, which I received from a number of investors are you going to soon dexia.

Next question. Without the non-cash revenue from the warrants, EBITDA fell dramatically to $4 million from $17 million. Are you expecting EBITDA to be a minus sign VE, so we interpreted that to be negative in the second six months of 2021? Perry?

The answer is on advice of counsel, we do not comment on potential litigation and I'm sure. Many of you understand the reasons for that active litigation will be commented on from time to time.

We'll now turn our attention to some of the financial questions. The.

The company spent $5 million for 2020 and $5 million for the first Q of 2021 for legal fees question don't you think it's too much and explained for details what the money was spent for <unk>.

The decrease in adjusted EBITDA was largely due to the substantial increase in legal and professional cost incurred during the period for the independent investigation and litigation related to activities as disclosed in our various filings.

I'm going to turn that question over to my colleague Terrie.

As Alvin stated, we are not providing any guidance on the second half of FY22.

Thanks, Jim.

Although we recognize that the expenditures for legal fees and the related consulting work were high.

What level of cash balance will the company consider a buffer for ongoing working capital? Is expansion by acquisition the main focus or will organic growth return at some point?

The company had no choice, but to make those expenditures the P to P. Short report raised allegations that the board believes should be investigated resulting in the audit committee of the board of directors launching an independent investigation to review those allegations.

Right. Organic Grove is the main focus, but the company will remain an opportunistic organization and any synergistic opportunities that arise for accretive acquisitions might be considered.

These types of investigations are quite extensive and costly.

You may have seen the investigation concluded that and I quote from our press release the allegations contained in the short report lacked either factual support our material base. Accordingly. The audit Committee has concluded that those allegations do not require additional action by the company.

So then related to that is a related question. Cash position, $99 million, no debt. Do you anticipate needing any form of funding, debt equity offering going forward to fund growth operations? Alvin?

The other major area of legal fees has to do with the shareholder class action lawsuit is entirely appropriate for the company defend itself. We will provide updates on the class action lawsuit as and when there are material developments.

The group currently has a healthy cash balance. We will continuously review the liquidity of the group, whether there are attractive funding opportunities towards the expansion of our business.

Thank you Perry.

Next question, can you talk about the increase in trade receivables? Temporary, still growing, how will this shake out over the next year or so? Alvin?

The next question is the development cost of $4 9 million in the six months is this expected to be the normal half your yearly expenditure for updates and integration of our cost front loaded.

Increase in trade receivables were mainly due to global economic challenges and consequently the challenges faced by our customers. We are continuously working with our customers on collection.

I'm going to ask my colleague Alvin <unk>, our CFO to respond.

Thanks Chip.

While this development costs represents upgrades to existing systems and also the addition of new modules.

Thank you. Do you see marketing spend to accelerate level off? How is this budgeted percent of sales, Alvin?

The development cause actual costs incurred.

Front loaded.

Yeah.

Thank you Robyn.

Our marketing span has been lower as the percentage of sales thus far in the first six months in FY22 as compared to full year FY21.

Next question, the uplift and staff expenses bonuses and staff increases during the six months materially impacted the cash bank balance by my calculations, what IRR has been forecast from this investment Perry would you. Please respond.

Our marketing plan is in line with the opportunities for the growth of our business and to support our new revenue stream.

Yes.

Next question, what is management expectation with regards to exceptional items, in particular legal fees, consultancy, plus professional fees and AR write-off? What portion of the charges incurred in H1-2021 are expected to be incurred in H2 of FY2022, ending

So certainly there have been an increase in staff costs in general.

These increases are tied directly to building out the company's capabilities to capitalize on what we feel are outsized opportunities with the ultimate goal of growing revenue and earnings.

The main reason for the impact on cash and the investments made in trade credit partners Fund the acquisition and acquisition of invoice bizarre.

228.23. Are such exceptional items actually a part of costs of doing business which were underestimated or overlooked at the time of the business combination? Perry?

Development expenditures related to crack those platform as well as legal and professional cost incurred during the course of the investigation and legal related activities as disclosed in our various filings as outlined in our filings. Many of these cash expenditures are expected to be non recurring in nature.

So, again, we will not be providing guidance, but as it relates to.

They were not underestimated, but unforeseen in the case of the investigation into the allegations of the short report and defending against the shareholder.

Yeah.

Thanks Perry.

Another question can the company provide guidance on FY 'twenty, two revenues and profits Alvin would you. Please respond.

Thanks, Barry. Okay, a couple of quick questions here. Is the company evaluating the option of adopting a December 31st fiscal year? Alvin? No, no.

Right at this stage, we are not providing any guidance on FY 'twenty to revenues or profits.

Next question without the noncash revenue from the warrants EBITDA fell dramatically to $4 million from $17 billion are you expecting EBITDA to be in it.

And is the company evaluating the option of re-domicile itself as a U.S. entity? And again, Alvin, could you comment?

It's a minus sign B E. So we interpreted that to be negative in the second six months of 2021 Perry.

Okay, thank you. On your cash flow statement in your 20-F, there is a line item of proceeds from warrants issued. What is that? Perry?

The degree the decrease in adjusted EBITDA was largely due to the substantial increase in legal and professional cost incurred during the period for the independent investigation and litigation related to activities as disclosed in our various filings.

All right, so this line item reflects the warrant liabilities that the company assumed as part of the net assets acquired pursuant to the reverse merger with NetGen on November 10th, 2020.

As Alan stated, we are not providing any guidance on the second half of FY 'twenty two.

Next question, is it correct to say that Triteris extended account AR, accounts receivable to 120 days, to help out with the makeup of Kratos customers shifting towards SME borrowers requiring funding?

What level of cash balance will the company consider a buffer for ongoing working capital is expansion by acquisition. The main focus of world organic growth return at some point Alvin please.

Right. Okay. I think growth is the main focus throughout the company will remain an opportunistic organization and any synergistic opportunities that arise for accretive acquisitions might be considered.

So we believe the change in accounts receivable policy was a prudent move to support many of our existing clients who were experiencing cash flow problems resulting from extended transaction times due to COVID and the global economic situation. Thank you. For the impairment.

So then related to that as a related question cash position of $99 million no debt do you anticipate needing any form of funding debt equity offering going forward to fund growth operations Alvin.

The group currently has a healthy cash balance we will continuously review the liquidity of the group whether they are attractive funding opportunities towards the expansion of our business.

all related to aging trade receivables. And I'll just say, yes, they are.

Do unpaid client invoices comprise a significant portion of the cash used for working capital?

Okay. Next question can you talk about the increase in trade receivables temporary still growing how will this shake out over the next year or so Alvin.

So, my understanding from the question is...

we're interpreting is do client accounts receivable represent most of the cash that was utilized for working capital? And the answer to that question is yes.

The increase in trade receivables were mainly due to the global economy challenges and consequently, the challenges faced by our customers.

Thank you. Next question, what are the plans for managing collections of accounts receivable? Alvin?

We're continuously working with our customers on collections.

Thank you.

Yes, we have a very well-defined process and related policies for managing accounts receivable balance.

Do you see marketing spend to accelerate level off how was this budgeted a percent of sales Alvin.

Every 15 days there is a detailed review of customer balances and a team assigned the responsibility for collecting makes a specific plan of action.

Oh, the marketing spend has been lower as a percentage of sales thus far in the first six months in FY 'twenty two.

Compared to full year FY 'twenty one.

Our marketing plan is in line with the opportunities for the growth of our business.

Another question we had on receivables, at what point does Triteris put its foot down and bar these borrowers and traders from doing trades in Kratos? And I'll be responding. And there's not a one-size-fits-all policy. And the level of action taken on outstanding balances varies according to the situational analysis by the committee responsible for managing the accounts receivable.

To support our new revenue streams.

Okay.

Next question, what is management expectation with regards to exceptional items in particular legal legal fees consulting professional fees a write off what portion of the charges incurred in <unk> 2021, there are expected to be incurred in each two of FY 2022.

But I think the uptake is we have deactivated client access to the platform for nonpayment when that is best deemed as the best course of action.

Ending.

<unk> 2823 are such exceptional items actually a part of cost of doing business, which were underestimated or overlooked at the time of the business combination Perry.

We received a question, you have outlined your move to the Amazon Web Services hosting of your platform and the move from Ethereum public blockchain to the AWS managed Hyperledger blockchain. Why did you do this and are there any concerns with the cost impact of doing this? Sri, would you mind?

So again, we will not be providing guidance, but as it relates to the expenses.

They were not underestimated, but unforeseen in the case of the investigation into the allegations of the short report and defending against the shareholder lawsuit.

Thanks, Barry Okay. A couple of quick questions here is the company evaluating the option of adopting at December 31st fiscal year Alvin.

We have published articles on our website that specifically outline the improvement in platform security that these actions provided us.

No no we are not evaluating the option.

We believe that AWS offers exceptional security protection, which we further enhance with quarterly penetration testing using Outsource.

Right.

As the company evaluating the option of re domicile itself as the U S entity and again now when could you comment.

No we are not evaluating the option.

Okay. Thank you on.

Not only did our move to AWS lower our cost, but we believe that we have reduced our exposure to cost volatility with this move.

On your cash flow statement in your 20-F, there was a line item or proceeds from warrants issued what is that Perry.

Alright. So this line item reflects the warrant liabilities that the company assumed as part of the net assets acquired pursuant to the reverse merger with Nextgen on November 10 2020.

All right, we're now going to move on to some of the operational questions that we received. How do you see supply chain headwinds going forward? I will field that question. This is an incredibly difficult question to answer. The SME commodity trading industry has been hit hard with expanded transaction cycle times, and the impact of that on those that are holding the financing of those transactions.

Thanks.

Next question is it correct to say that try terrorists extender account.

Accounts receivable to 120 days to help out with the makeup of kratos customers shifting towards SME borrowers requiring funding.

Perry.

The sea change in trade credit insurance industry availability has also been a drag. It is unprecedented, and the timing of the resolution of these issues is beyond our ability to predict. However, we do know a few things. Trade still needs to happen.

We believe the change in accounts receivable policy was a prudent move to support many of our existing clients, who are experiencing cash flow problems, resulting from extended transaction.

Action times due to the Covid and the global economic situation.

It's also becoming more widely accepted that digitization of the trading ecosystem offers incredible opportunities to the trading industry as a whole.

Yeah.

Thank you for the impairment.

In.

Accounts receivable are all of these.

We still believe that the value proposition of Kratos is compelling and will be of great utility to those SME traders that have been able to withstand the body blow that COVID-19 and supply chain disruption has dealt them.

All related to aging trade receivables and I'll just say, yes. They are.

Do unpaid client invoices comprise a significant portion of the kids shoes for working capital Barry.

As far as Triteris is concerned, the original strategy to evolve our customer base and financing structures outside of APAC, that's the Asia-Pacific Commodity Traders, seems in retrospect to have been a good idea.

My understanding from the question is.

How we are interpreting interesting client accounts receivable represent most of the cash that was utilized for working capital.

And the answer to that question is yes.

Thank you.

The enterprise level supply chain finance business being led by Invoice Bazaar is a much healthier industry with a whole different financing structure and lending risk profile.

What are the next question what are the plans for managing collections of accounts receivable Alvin.

Yes, we have a very well defined process and related policies for managing accounts receivable balances.

As we discussed earlier, we have already built the teams for distribution capability, that is to recruit new lenders to the platform.

Every 15 days that is a detailed view of customer balances.

and origination capability to bring new borrowers on the platform from different geographies and different product areas beyond commodity.

Team assigned the responsibility people collecting makes us specific plan of action.

Thank you.

Another question, we had on receivables at what point does try terrorists put his foot down and part of these borrowers and traders from doing trades and kratos and I'll be responding.

We are encouraged as to how this is evolving and feel very fortunate of taking these steps literally last year to build out these capabilities and add this new business segment to our focus.

Theres not a one size fits all policy and the level of action taken on outstanding balances varies according to the situational analysis by the committee responsible for managing the accounts receivable.

Another new initiative is the e-commerce vendor micro-lending business being launched by Invoice Bazaar. Although only a fledgling business at this point, we believe it has huge potential and Triteris is very well positioned to bring the advanced technology solution to actualize this opportunity. So to use a sports analogy, we now have three, not one horse in the race, and we are very happy to have done so.

I think the uptake is we have deactivated client access to the platform for non payment when that is the best team is the best course of action.

Okay moving on to technology.

We received a question you've outlined your move to the Amazon Web services hosting of your platform and the move from a theory and public blockchain to the AWS.

Next question, can you explain the gain slash loss of traders' customers over the last few periods? Are some customers in wait and see mode, see mode excuse me, not doing transactions? Srinivas, please.

Managed hyper ledger block chain why did you do this and are there any concerns with the cost impact of doing this Sri would you mind fielding that one.

while we are not giving specific data around number of customers.

Due to economic situation globally and the challenges that the company has faced over the last year, we have seen decline in revenues from certain existing customers.

Here's Tim.

We have published articles on our web site.

Typically.

The improvement in platform security that these actions provide us with.

However, at the same time, we have managed to onboard new customers onto the platform.

I believe that <unk> offers exceptional security protection.

We have also expanded our revenue stream following the acquisition of Inwise Bazaar Group.

Which we further enhanced with quarterly penetration testing using <unk>.

We continue to evaluate our performance through key operating metrics, which include total transaction volume and financing ratio.

In regards to Cott.

Not only did our move to AWS move at all cost, but we believe that we have reduced that exposure to cause some volatility with this move.

Another question we received. Aside from the more long-term considerations, what is the current appraisal of the management team?

Thank you Sri.

Alright, we're now going to move on to some of the operational.

of the management team slash board with regards to the invoice bazaar acquisition. Srinivas?

The questions that we received.

How do you see supply chain headwinds going forward.

We are extremely pleased with how smoothly the integration of invoice reserves, management and business operations were integrated.

I will field that question. This is an incredibly difficult question to answer the SME commodity trading industry has been hit hard with expanded transaction cycle times and the impact of that on those that are listening to the financing of those transactions.

Given the rapid expansion in the Middle East market, the Envoy-Esposa team along with Triterat team has played a significant role in our business expansion.

The sea change in trade credit insurance industry availability has also been a drag it is unprecedented in the timing of the resolution of these issues is beyond our ability to predict however, we do know a few things trade still needs to happen.

Next question, can you give an idea how many customers in the accompanying revenues that have been lost to the Kratos platform during the six-month period and what is being done to address this concern? Srinivas?

We will not use specific data around the number of customers, but during our overview we did provide information on the global economic situation and the challenges that the company has faced over the last year. We have seen a decline in revenue from certain existing customers. However, we have managed to onboard new customers onto the platform.

It is also becoming more widely accepted that digitization of the trading ecosystem offers incredible opportunities to the trading industry as a whole.

We still believe that the value proposition of Kratos is compelling and it will be a great utility to those SME traders that have been able to withstand the body blow that COVID-19, and supply chain disruption as delta.

Also, our successful acquisition of InviPleasure has brought in new potential revenue streams in supply chain finance and e-commerce micro-lending. We believe that the keys to our success will be to achieve traction in these new markets, as well as the expected recovery of the trading industry at some point in time.

As far as criteria is concerned the original strategy to evolve our customer base and financing structures outside of APAC. That's the Asia Pacific commodity traders seems in retrospect to have been a good one the enterprise level supply chain finance business being led by.

We continue to evaluate our performance through key operating metrics, which include total transaction volume and the financing ratios.

By invoice bizarre.

Healthier industry with a whole different financing structure in lending and risk profile as we discussed earlier, we have already built the teams for distribution capability that is to recruit new lenders to the platform and origination capability to bring new borrowers on the platform from different geographies.

Next question, please provide additional information, IRR terms, et cetera, with regards to the $15 million investment in the trade finance fund. I'll.

Our investment in the trade finance fund is a strategic investment to improve our presence across the trade finance sector. The fund is expected to have a minimum annual rate of return of the three month LIBOR plus 4%. Also, investment in the trade finance fund by criteria.

Fees and different product areas beyond commodities, we are encouraged as to how this is evolving and feel very fortunate to taking these steps literally last year to build out these capabilities and add this new business segment to our focus another new initiative is the e-commerce vendor micro.

demonstrates the company's belief that trade finance is an appealing investable asset class to those prospective credit funds that we are soliciting for onboarding to the Kratos platform.

Lending business being launched by invoice bizarre.

Although only a fledgling business at this point, we believe it has huge potential and <unk> is very well positioned to bring the advanced technology solution to actualize. This opportunity so to use a sports analogy. We now have three not one horse in the race and we are very happy to have done so.

To reiterate, we believe that trade finance lending offers high yields, short maturity, are self-liquidating, and have structural protections with low correlation to other asset classes. We believe it could be very appealing for a number of general credit funds.

Next question can you explain the gain slash loss of traders customers over the last few periods or some customers in wait and see mood see mode excuse me not doing transactions Srinivas. Please.

The next question, what besides the initial onboarding KYC process's criteria

doing to make sure bad players are kept at bay? I'll be fielding the answer to that question. I'll be fielding that question. We believe that our onboarding process is very robust and exceeds the standards used by many banks. This question, though, relates to the safeguards in place post the initial onboarding, and we have a very specific set of processes that are followed.

While we are not giving specific data around number of customers.

Economic situation globally, and the challenges that the company has faced over the last year.

You have seen declining revenues from certain existing customers.

So those are at the same time, we have managed to onboard new customers onto the platform.

Every client on the platform undergoes a full KYC update every six months. And this process, in terms of reminders and follow-ups, is automated on the platform.

Also expanded over revenue stream following the Covid, there's nothing new I spoke of our group.

We continue to evaluate our performance two key operating metrics, which include total transaction volume and financing ratio.

Also, the platform will automatically generate a request for update if one of the critical documents underlying the KYC, as an example, like a country-specific trade license, expires between the scheduled six-month update.

Thank you.

Another question, we receive aside from the more long term considerations what is the current appraisal of the management team.

Of the management team Slash board with regards to the invoice bizarre acquisition.

There are also risk mitigation tools on the platform, for example, BOL, that's bill of lading verification, and vessel checks, as well as instant access to third party credit reports.

Us.

Oh, we are extremely pleased with how smoothly the integration of invoice management and business operations were integrated.

Also, the fundamental structure of our blockchain-enabled platform means that there is one version of the truth with regards to transaction records, which we believe is demonstrated to reduce dispute.

Given the rapid expansion in the middle East market, they invoice, but that team along with tighter team has played a significant role in our business expansion.

Thank you.

Next question can you give an idea of how many customers in the accompanying revenues that have been lost to the kratos platform. During the six month period, and what is being done to address this concern srinivas.

The next question, has there been any significant loan defaults to lenders? These don't impact triteris finances directly, but it could pose reputational and credibility risks if lenders are beset by bad loans. Srinivas?

Well, we will not give specific data around the number of customers, but during an overview. We did provide information on the global economic situation.

The platform does not track the repayments, but we are not aware that any issues have been raised by the lenders with us on default.

The challenges that the company has faced over the last year, we have seen a decline in revenue from certain existing customers. Although we have managed to onboard new customers onto the platform.

For the trade discovery module, is it possible for one party to search a list of buyers, traders, sellers, and lenders already registered on Kratos and conduct trade with them for the first time, or are Kratos trades limited to parties with the user setups under the user's Kratos profile? Srinivas?

Also our successful acquisition of in ways that have brought in new potential revenue streams and supply chain finance.

And E Commerce micro lending, we believe that the keys to our success will be to achieve traction in this new market.

As well as the expected recovery of the trading industry at some point in time.

Yes, they can find you counterparties on the platform and can also trade with you.

Can you go evaluate our performance two key operating metrics, which include total transaction volume under financing ratios.

Thank you. Next question is for ESG. Is the coal trading 10 to 15% of revenues impacting any future business prospects from lenders with a key eye for ESG? As we've all, I'm going to answer that question. As we've always maintained, we are product agnostic platform.

Thank you.

Next question. Please provide additional information IRR terms et cetera, with regards to the $15 million investment in the trade Finance fund.

I'll field that question our investment in the trade Finance fund as a strategic investment to improve our presence across the trade finance sector.

But as we have greatly expanded our client and product focus, we have made a concerted effort to include new vertical markets that would be viewed favorably from an ESG perspective. So we believe that we now offer a much greater portfolio of ESG-centric opportunities to lenders.

<unk> is expected to have a minimum annual rate of return of the three month LIBOR plus 4% also investment in the trade Finance fund by trade tariffs demonstrates the company's belief that trade finance is an appealing investable asset class to those perspective.

Also we believe it's worth remembering that our very core mission to bring additional liquidity to underserved or underbanked markets and emerging markets is an economic accelerator in those markets and directly serves the world's social good.

Credit funds that we are soliciting for onboarding to the Kratos platform to reiterate we believe that that trade finance lending offers high yields short maturity are self liquidating and have structural protections with low correlation to other asset classes, we believe it could be.

Excuse me, next question, how is employee morale? Are you retaining employees? Srinivas? In general.

Very appealing for a number of general credit funds.

The next question what besides the initial Onboarding T Y C processes <unk> doing to make sure bad players are kept at Bay.

or employees on the frontline have a strong belief in the company and its mission.

We have gone out of our way to communicate to the employees some of the misinformation that has been directed at them.

Fielding the answer to that question it will be fielding that question.

We believe that our onboarding process is very robust and exceeds the standards used by many banks. This question, though relates to the safeguards in place post the initial onboarding and we have a very specific set of processes that are followed.

Inevitably, there is always turnover in rapidly evolving organizations and some of it will be forced.

All in all, we are in good place with what we believe to be a highly capable and hard-working

Thank you. Related to that, is there any update on what Triteris did to fill John Ghilani's old COO position?

Every client on the platform undergoes a full ky see update every six months and this process in terms of reminders and follow ups is automated on the platform.

John's responsibilities have been assigned to other executives in the organization.

Also the platform will automatically generate a request for update if one of the critical documents underlying the Ky C. As an example, like a country specific trade license expires between the schedule six month updates. There are also risk mitigation tools on the platform.

Thank you. Next question. What are the key elements? And this is the final question. What are the key elements that explain current revenue trends versus the forecast published prior to the business combination?

We have spoken at length today and in our filings about the series of events that befell the company, as well as the impacts of the worldwide economic crisis on our client base.

For example, <unk>, that's still a leading verification and vessel checks as well as instant access to third party credit reports.

We would like to point out that in spite of the events, we essentially achieved our revenue forecast for the year ending February , 2021, but these events have been much more impacting in the fiscal 22. Our core strategy and mission remain intact, and we remain very excited about the company's prospects in the future.

Also the fundamental structure of our blockchain enabled platform means that there is one version of the truth with regards to transaction Records, which we believe is demonstrated to reduce disputes.

The next question has there been any significant loan defaults to lenders. These don't impact criterias finances directly but it could pose reputational and credibility risks if lenders are beset by bad loans shred of us.

Great, thank you Srinivas. That concludes our prepared remarks as well as the question and answer session. We thank you all for joining us and for your interest in the company and we look forward to speaking to you after we filed our 20th and in a few months here. Again, thank you for your interest in support of the company. Operator?

So platform does not track the repayments, but we have not set any issues have been raised by the lenders because on the book.

Thank you.

For the trade discovery module is it possible for one party to search a list of buyers traders sellers and lenders already registered on Kratos and conduct trade with them for the first time or our Kratos trades limited the parties with a user setups under the users kratos profile sort of us.

Ladies and gentlemen, thank you for joining us today for Triteria's Business Update Conference Call. You may now disconnect. Everyone have a wonderful day.

Yes, they can find new counterparties on the platform.

And also trade with them.

Thank you next.

Next question is for ESG is the coal trading 10% to 15% of revenues impacting any future business prospects from lenders with a key eye for ESG as we've all gone.

Thanks for watching!

I'm going to answer that question as we've always maintained we are product agnostic platform.

But as we have greatly expanded our client and product focus we have made a concerted effort to include new vertical markets that would be viewed favorably from an ESG perspective. So we believe that we now offer a much greater portfolio of ESG centric opportunities to lenders.

Also we believe it's worth remembering that our very core mission to bring additional liquidity to underserved or under bank markets and emerging markets as an economic accelerator in those markets and directly serves the words world social good.

Okay.

Yeah.

Excuse me.

Next question how was employee morale are you retaining employees serve us.

In general we believe that employee morale is positive.

Employees on the frontline has a strong belief in the company and its mission.

Born out of our way to communicate to them play some of the misinformation that has been directed at the company.

Nevertheless, there is always start nobody's rapidly evolving organization.

Perfectly be forced.

All in all we are in good place with what we believe to be a highly capable and hard working team.

Thank you.

Related to that is there any update on what Criterias did the fill John Galant CEO position Cerner bus.

Oh, John to our responsibility as had been the same too.

And the organization.

Thank you next question what are the key elements and this is the final question what are the key elements that explain current revenue trends versus the forecast published prior to the business combination sort of us.

We have spoken at length today Honeywell filings about the series of events that will be felt the company as well as the impact of the worldwide economic crisis of North clean base.

We would like to point out that in spite of the events, we essentially achieved over revenue forecast for the year ending.

<unk> 2021.

These events have been much more impacting in the.

'twenty two.

<unk> strategy and vision remain intact, and we remain very excited about the company's prospects in the future.

Okay.

Yes.

Great. Thank you is front of us.

That concludes our prepared remarks as well as the question and answer session.

Thank you all for joining us and for your interest in the company.

And we look forward to speaking.

To you.

After we filed our 20-F in a few months here.

Again, thank you for your interest and support of the company operator.

Ladies and gentlemen, thank you for joining us today for Tri tourist business update conference call. You may now disconnect everyone have a wonderful day.

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