UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended February 28, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report: Not applicable

Commission File Number: 001-39693

TRITERRAS, INC.

(Exact name of Registrant as specified in its charter)

9 Raffles Place, #23-04 Republic Plaza

Singapore 048619

(Address of principal executive offices)

Alvin Tan

9 Raffles Place, #23-04 Republic Plaza

Singapore 048619

Telephone: +65 6661 9240

(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

⁽¹⁾ Our Ordinary Shares and Triterras Warrants (as defined below) are expected to be delisted from Nasdaq and, on the date of this Annual Report, are quoted on the OTC Expert Market under the symbols “TRIRF” and “TRIRW,” respectively, on an “unsolicited only” basis. See the “Explanatory Note” to this Annual Report for additional information regarding delisting of our securities from Nasdaq.

Indicate the number of outstanding shares of each of the issuer’s classes of capital or ordinary shares as of the close of the period covered by the Annual Report: 81,364,337 Ordinary Shares and 25,981,000 Triterras Warrants.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.  Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company.  See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.  ☐

†The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting over Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow.  Item 17 ☐ Item 18 ☐

If this is an Annual Report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐ No ☒

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Cautionary Note Regarding Forward-Looking Statements

This Annual Report on Form 20-F (including information incorporated by reference herein, this “Annual Report”) contains or may contain forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve significant risks and uncertainties. All statements other than statements of historical facts are forward-looking statements.  These forward-looking statements include information about our possible or assumed future results of operations or our performance. Words such as “expects,” “intends,” “plans,” “believes,” “anticipates,” “estimates,” and variations of such words and similar expressions are intended to identify forward-looking statements. The risk factors and cautionary language referred to or incorporated by reference in this Annual Report provide examples of risks, uncertainties and events that may cause actual results to differ materially from the expectations described in our forward-looking statements.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report unless otherwise indicated.  Although we believe that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.  These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond our control.  Actual results may differ materially from those expressed or implied by such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements contained in this Annual Report, or the documents to which we refer readers in this Annual Report, to reflect any change in our expectations with respect to such statements or any change in events, conditions or circumstances upon which any statement is based.

Explanatory Note

Triterras, Inc. (the “Company”) is filing this Annual Report on Form 20-F (this “Annual Report”) for the fiscal year ended February 28, 2021.  The Annual Report was originally due to be filed with the Securities and Exchange Commission (the “SEC”) by June 28, 2021 (the “Filing Deadline”).

As described in greater detail below, the Company did not timely file this Annual Report on or prior to the Filing Deadline as a result of its inability to timely complete an audit of its consolidated financial statements for the fiscal year ended February 28, 2021.

Background to Filing Delay

On July 29, 2020, the Company (formerly Netfin Holdco), Netfin Acquisition Corp., a Cayman Islands exempted company (“Netfin”), MVR Netfin LLC, a Nevada limited liability company, as the representative of Netfin as of such date and immediately prior to the closing of the Business Combination (as defined below), Netfin Merger Sub, a Cayman Islands exempted company and a wholly owned subsidiary of the Company (“Netfin Merger Sub”), Symphonia Strategic Opportunities Limited, a Mauritius private company limited by shares (“SSOL”), and IKON Strategic Holdings Fund, a Cayman Islands exempted company (together with SSOL, the “Sellers”), entered into a Business Combination Agreement, pursuant to which, among other

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things, (i) the Sellers agreed to sell to the Company all of issued and outstanding ordinary shares of Triterras Fintech Pte. Ltd. (“Fintech”) in exchange for an aggregate of $60,000,000 in cash, 51,622,419 Ordinary Shares of the Company, and up to an additional 15,000,000 Ordinary Shares of the Company (upon the Company meeting certain financial or share price thresholds); and (ii) Netfin Merger Sub agreed to merge with and into Netfin, with Netfin being the surviving corporation and a wholly owned direct subsidiary of the Company following the merger (the transactions described in subclauses (i) and (ii) above, collectively, the “Business Combination”).  

The Business Combination was consummated on November 10, 2020 and on such date the Company changed its name from “Netfin Holdco” to “Triterras, Inc.”

KPMG, LLP (“KPMG”) was Fintech’s independent registered public accounting firm at the time of the Business Combination and became the Company’s independent registered public accounting firm in connection with and following the Business Combination.  In addition, at the time of the Business Combination, the Audit Committee (the “Audit Committee”) of the Company’s board of directors (the “Board”) consisted of Martin Jaskel, Vanessa Slowey and Matthew Richards, with Mr. Jaskel serving as the “financial expert” of the Audit Committee under listing standards and the rules and regulations of the Nasdaq Stock Market LLC (“Nasdaq”) and the SEC.  

On December 21, 2020, a class action complaint (under the caption Ferraiori v. Triterras, Inc., et al., Case No. 7:20-cv-10795) was filed in the United States District Court of the Southern District of New York against the Company, Srinivas Koneru, Executive Chairman of the Board and the Company’s Chief Executive Officer, and Marat Rosenberg, for alleged undisclosed facts and misrepresentations made by the above-named defendants (the “December 2020 Class Action”).

On January 5, 2021, the Company announced that Martin Jaskel, the Audit Committee’s “financial expert” and a member of the Board, had passed away due to medical complications. On January 29, 2021, Adrian Kow Tuck Hoong was appointed to the Board and named Chair of the Company’s Audit Committee and a member of the Nominating and Corporate Governance Committee of the Board.  Further, on April 22, 2021, Mr. Richards and Ms. Slowey resigned from the Board and the Audit Committee, which left the Audit Committee with only one member.  On April 28, 2021, the following appointments were made to the Board:  Yong-Moon Kim was appointed to the Board, as the Chair of the Compensation Committee of the Board (the “Compensation Committee”) and as a member of the Audit Committee; Jayapal Ramasamy was appointed to the Board and as a member of the Audit Committee and the Compensation Committee; and Lilian Koh Nee Noi  was appointed to the Board and as a member of the Nominating and Corporate Governance Committee of the Board.

On January 20, 2021, the Board received formal notice that KPMG had decided to resign as the Company’s independent auditors effective January 20, 2021. KPMG did not provide any specific reason for its resignation, other than there was a change in the Company’s risk profile.

On the day of KPMG’s resignation, KPMG sent a letter to the Audit Committee making the recommendation that it conduct an independent investigation of the allegations contained in a report of a short seller, Phase 2 Partners LLC, dated January 14, 2021 (the “Short Report”).  On

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January 25, 2021, the Audit Committee initiated an independent investigation into accusations made in the Short Report (the “Investigation”).  

From January 20, 2021 through June 16, 2021, the Company reached out to various independent public accounting firms in an effort to replace KPMG as the Company’s independent auditor.  During this time, the Company identified and evaluated approximately 15 global accounting firms which the Company believed had the necessary expertise and abilities to perform the audit (the “Audit”) of the Company’s consolidated financial statements for the fiscal years ended February 28, 2021, February 29, 2020 and February 28, 2019 to be included in this Annual Report under International Financial Reporting Standards (“IFRS”) and Public Company Accounting Oversight Board (“PCAOB”) rules and regulations.  

The Company was unable to engage a new independent auditor until June 16, 2021 as many of the accounting firms identified by the Company were reluctant to accept an engagement from the Company until such time as the results of the Investigation were finalized.

On June 17, 2021, the Audit Committee approved the engagement of Nexia TS Public Accounting Corporation (“Nexia”) as the Company’s independent registered public accounting firm to conduct the Audit, and Nexia consented to act in such capacity and confirmed that it had the resources to complete the Audit in a timely manner (which the other auditors were not able to commit to).

On or around June 21, 2021, Nexia started to conduct the Audit.  Due to the timing of the engagement of Nexia as well as the nature and amount of the work required for Nexia to complete the Audit, the Company was not able to file this Annual Report by the Filing Deadline, nor within the 15-day extension period afforded by SEC Rule 12b-25 under the Securities Exchange Act of 1934, as amended.

On July 1, 2021, the Nasdaq staff (the “Staff”) notified the Company that it did not comply with Nasdaq’s filing requirements set forth in Listing Rule 5250(c)(1) (the “Rule”) because it had not timely filed this Annual Report by the Filing Deadline.

In addition, on July 1, 2021, an amended class action complaint (the “Amended Class Action”) amending the December 2020 Class Action was filed (under the caption Erlandson and Norris v. Triterras, Inc., et al., Case No. 7:20-cv-1095-CS) against the Company and various other parties including Mr. Koneru and certain past and present directors and officers of the Company, adding additional allegations to the December 2020 Class Action based on the Short Report and expanding the class period to the period from June 29, 2020 to January 14, 2021.

On July 30, 2021, the Company submitted to the Staff a detailed explanation for its failure to timely file this Annual Report and a detailed plan to regain compliance with the Rule.  On August 24, 2021, Staff granted the Company an exception until November 1, 2021, to file this Annual Report and regain compliance with the Rule.  On October 31, 2021, the Company submitted a supplement to the Company’s compliance plan and requesting an extension of the exception until December 1, 2021.  By letter dated November 4, 2021, the Staff granted this request.  On December 1, 2021, the Company submitted a third request for an exception through December 8, 2021.  With the Audit not yet complete, the Company was unable to file this Annual

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Report on or prior to December 8, 2021.  The Company was unable to meet the deadlines noted above as a result of the failure to complete the Audit in such time period.

On December 14 and 15, 2021, the Company’s solicitors issued letters of demand (the “Demand Letters”) to Nexia as a result of the failure to complete the Audit in a timely manner. Between December 16, 2021 and December 30, 2021, the Company initiated discussions with potential alternative independent public accounting firms, who then sought professional clearance from Nexia. On December 30, 2021, Nexia delivered letters to the Company’s Chief Executive Officer, Chief Financial Officer and the Chairman of the Audit Committee stating, among other things, that Nexia had ceased work and would like to withdraw as auditor as soon as was practicable.

On December 31, 2021, the Company appointed WWC, P.C. (“WWC”), an independent public accounting firm registered with the PCAOB, as the Company’s new independent auditor to conduct the Audit.  On January 4, 2022, the Company’s Chief Executive Officer, Chief Financial Officer and the Chairman of the Audit Committee received letters from Nexia stating that the client-auditor relationship between the Company and Nexia had ceased and that Nexia had withdrawn as the Company’s independent auditor.

On March 7, 2022, WWC completed the Audit and issued to the Company an unqualified auditors’ opinion with no material concerns or findings.  The preliminary results of the Audit were presented to the Audit Committee on February 22, 2022.  At that meeting, the Audit Committee voted to accept the results of the Audit and approved the audited financial statements prepared by WWC.  The Audit Committee appointed WWC as the Company’s independent auditor for the fiscal year ended February 28, 2022.

With the Audit complete, the Company is now filing this Annual Report.  As discussed in detail above, the Company was not able to timely file this Annual Report by the Filing Deadline as a result of a myriad of factors, including (i) the considerable resources, time and energy dedicated by the Company’s management responding to the allegations set forth in the December 2020 Class Action and subsequent Amended Class Action, in conducting the Audit Committee’s Investigation from January 2021 through October 2021, and the Nasdaq delisting process which has been ongoing since July 2021; (ii) KMPG’s resignation in January 2021; (iii)  the unexpected death of the Audit Committee’s “financial expert” in January 2021, the resignation of an additional two members of the Audit Committee in April 2021 and the appointments of new members to the Board and Audit Committee and other Board committees in April 2021; (iv) the fact that the Company was unable to find a replacement auditor following KPMG’s resignation and was left without an independent auditor from January 20, 2021 through June 17, 2021, primarily due to then-ongoing Audit Committee Investigation; (v) Nexia’s resignation in December 2021; and (vi) and the delays inherent in bringing on a new auditor, WWC, commencing on December 31, 2021.

Additional Information Regarding Delisting of the Company’s Securities

As noted above, the Company was unable to file this Annual Report by the December 1, 2021 extended deadline which the Staff had granted to the Company on November 1, 2021.

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On December 10, 2021, the Company received a determination notice from Nasdaq stating that, as a result of the Company’s failure to file this Annual Report with the SEC and regain compliance with the Rule by December 1, 2021, Nasdaq had determined (the “Determination”)  that, unless the Company requested an appeal of the Determination, Nasdaq would suspend trading of the Company’s Ordinary Shares and Triterras Warrants at the opening of business on December 21, 2021, and would file a Form 25-NSE with the SEC, which would remove the Company’s securities from listing on Nasdaq. On December 16, 2021, the Company appealed the Determination to the Nasdaq Hearings Panel (the “Panel”), and requested that the stay of delisting, pursuant to Nasdaq Rule 5815(a)(1)(B), be extended until the Panel issued a final decision on the matter. A hearing in the matter was then scheduled for January 20, 2022.

On December 23, 2021, the Company received a letter from the Staff stating that (i) Nasdaq had granted the Company’s request to extend the automatic 15-day stay of suspension from Nasdaq, pending the hearing scheduled for January 20, 2022 and a final determination by the Panel regarding the Company’s listing status; and (ii) the Panel had decided to maintain the status quo of the Company’s shares pending such hearing, so that a final decision about the Company’s listing could be made on a full and complete record at that time.

On February 1, 2022, the Company received notice from the Staff stating that the Panel had denied the Company’s appeal of the Staff’s Determination to delist and suspend trading of the Company’s securities on Nasdaq. With the Panel’s decision having been rendered, trading in the Ordinary Shares and the Triterras Warrants on Nasdaq were suspended effective with the open of business on February 3, 2022.

The Company initially elected to appeal the Panel’s decision to the Nasdaq Listing and Hearing Review Council within the applicable 15-day appeal period.  However, the Company has determined to withdraw its appeal of the Panel’s decision to the Nasdaq Listing and Hearing Review Council (the “Listing Council”) and instead, will focus on the relisting of the Ordinary Shares and the Triterras Warrants on Nasdaq as soon as practicable through the normal relisting application process. We expect that Nasdaq will complete the delisting of the Ordinary Shares and the Triterras Warrants by filing a Form 25 Notification of Delisting with the SEC. The delisting of the security becomes effective 10 days after the Form 25 is filed pursuant, unless the SEC postpones the delisting.

As at the date of the filing of this Annual Report, the Company’s Ordinary Shares and Triterras Warrants are quoted on the OTC Expert Market on an “unsolicited only” basis under the symbols “TRIRF” and “TRIRW”, respectively.  Pursuant to Rule 15c2-11 under the Exchange Act, as of September 26, 2021, companies that do not make current information publicly available under the rule are transitioned to the OTC Expert Market, where trades are limited primarily to private purchases and sales among sophisticated investors with sufficient investment experience, among others.  The Company is currently reviewing alternatives for trading of its securities in the United States, including submitting an application for trading of the Ordinary Shares and the Triterras Warrants on the OTCQX exchange.  

Information Concerning the Company’s Financial Statements

Certain amounts that appear in this Annual Report may not sum due to rounding.

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Unless stated otherwise, all amounts presented in this Annual Report are in U.S. Dollars.

On July 30, 2019, Netfin issued Public Warrants (as defined below) and Private Placement Warrants (as defined below).  These warrants were initially not accounted for as a liability by Netfin.  

On October 26, 2020, the Company filed a Registration Statement on Form F-4/A (the “Form F-4”) with the SEC.  This filing included the audited 2019 financial statements of Netfin.  On November 16, 2020, the Company filed a Shell Company Report on Form 20-F with the SEC which incorporated by reference the financial statements of Netfin included in Form F-4.

On April 12, 2021, following the closing of the Business Combination in November 2020, the SEC issued a statement (the “SEC Statement”) on the accounting and reporting considerations for warrants issued by special purpose acquisition companies (“SPACs”).  The SEC Statement discussed certain features in warrants issued in SPAC transactions and highlighted potential accounting implications of certain terms that are common in warrants issued in connection with the initial public offerings of SPACs.  As such, the staff advised that companies with these outstanding warrants (whether SPACs or the combined company following a de-SPAC transaction) consider the need to amend previously filed audited and unaudited financial statements.

After considering the SEC Statement, the Company made an assessment of the warrants in preparing our consolidated financial statements as of and for the fiscal year ended February 28, 2021 and concluded the warrants contained features that required their classification as a liability of Netfin.

Following the closing of the Business Combination, Netfin became a subsidiary of the Company, and the Company ceased publishing separate financial statements for Netfin. Subsequent to the Business Combination and the issuance of the SEC Statement, until the filing of this Annual Report, the Company had not filed or published the audited financial statements of the Company as of and for the fiscal year ended February 28, 2021.  Those financial statements of the Company are included herein and reflect the appropriate accounting for the Public Warrants and Private Placement Warrants (originally issued by Netfin) as a liability with changes in fair value recorded in the statement of comprehensive income.

The table below sets forth a summary of the revisions that were made to Netfin’s 2019 financial statements originally set forth in the Form F-4 as a result of the reclassification of the warrants originally issued by Netfin as a liability.  Such revisions are reflected in the financial statements set forth in this Annual Report.  The reclassification of the warrants had no impact on liquidity, cash and cash equivalents or cash flows from operating, investing and financing activities of the Company.  The Company has determined not to restate the financial statements of Netfin, and instead disclose in this Annual Report the relevant information relating to the reclassification of the warrants as a liability.  The Company’s financial statements included in this Annual Report properly reflect the warrants as a liability as of and for the fiscal year ended February 28, 2021, and no revisions to prior periods were required in the preparation of these financial statements.

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The previously filed financial statements of Netfin set forth in the Form F-4 and in the Company’s Shell Company Report on Form 20-F filed with the SEC should no longer be relied upon with respect to its accounting treatment for warrants.

Netfin Warrant Financial Statement Reclassification Impacts

Internal Control Considerations

In light of the Company’s assessment for the accounting treatment of warrants discussed above, the Company reassessed the effectiveness of its internal control over financial reporting as of February 28, 2022 and has concluded our internal control over financial reporting was not effective due to, among other things, a material weakness in our internal control over financial reporting relating to assessing complex accounting standards.  Specifically, the review controls over the evaluation of complex, non-routine financial instrument transactions, were not sufficient to detect the proper accounting and reporting of the warrants previously issued by Netfin, The Company intends to provide our personnel with enhanced access to accounting literature, research materials and documents and to increase communication among our personnel and third party professionals with whom we consult regarding complex accounting applications. See Controls and Procedures,” below, for additional information relating to our internal control over financial reporting.

DEFINED TERMS

Unless otherwise stated or unless the context otherwise requires, references to the “Company” are to Triterras, Inc., whereas references to “Triterras,” “we,” “us,” or “our” are to Triterras, Inc. and its subsidiaries.

In this Annual Report:

“Companies Act” means the Companies Law (2020 Revision) of the Cayman Islands.

“Executive Management” means the executive management team of Triterras.

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“Fintech” means Triterras Fintech Pte. Ltd.

“Group,” means Triterras, Inc., an exempted company incorporated in the Cayman Islands on February 19, 2020 and, where the context requires, its consolidated subsidiaries and its affiliated consolidated entities, including its variable interest entities and their subsidiaries, as at any applicable reference date.

“IFRS” means the International Financial Reporting Standards as issued by the International Accounting Standards Board.

“Netfin” means Netfin Acquisition Corp., a Cayman Islands exempted company with registration number 350412.

“Netfin Class A ordinary shares” means Netfin’s Class A ordinary shares, par value $0.0001 per share.

“Netfin IPO” means the initial public offering of Units of Netfin, consummated on July 30, 2019.

“Ordinary Share” means the ordinary shares of Triterras, par value $0.0001 per share.

“Private Placement Warrant” means Warrants sold in private placements in connection with the Netfin IPO.

“Public Shares” means Netfin Class A ordinary shares issued as part of the Units sold in the Netfin IPO.

“Public Warrants” means Warrants included in Units sold in the Netfin IPO.

“Registration Rights Agreement” means that registration rights agreement, dated as of November 10, 2020, by and among the Company, Netfin, MVR Netfin LLC, SSOL and IKON and certain other parties thereto, with respect to the Ordinary Shares and other securities of Triterras.

“Sellers” means Symphonia Strategic Opportunities Limited, a Mauritius private company limited by shares (“SSOL”), and IKON Strategic Holdings Fund, a Cayman Islands exempted company (“IKON”).

“Total Transaction Volume” means the dollar volume of trades and the trade finance transactions facilitated by the Kratos Platform.

“Trade Finance Volume” means the dollar volume of trade finance transactions facilitated by the Kratos Platform.

“Transaction Volume” means the dollar volume of trades facilitated by the Kratos Platform.

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“Triterras Warrants” means the warrants issued by the Company, each of which entitle the holder thereof to purchase for $11.50 per share one Ordinary Share (subject to adjustment in accordance with the Warrant Agreement).  As part of the Business Combination, a total of 25,300,000 Public Warrants (exercisable at $11.50 per share) and 681,000 Private Placement Warrants (exercisable at $11.50 per share) became Triterras Warrants.

“Units” means Units issued in the Netfin IPO, each consisting of one share of Netfin Class A ordinary shares and one Warrant.

“USD” or “$” means United States Dollars.

“Warrant Agreement” means that certain Warrant Agreement, dated as of July 30, 2019, between Netfin and the warrant agent named therein.

“Warrants” means warrants, issued pursuant to the Warrant Agreement, to purchase Netfin Class A ordinary shares issued in the Netfin IPO and simultaneous private placements.  Each whole warrant entitled the holder thereof to purchase one share of Netfin Class A ordinary shares at a price of $11.50 per share (subject to adjustment in accordance with the Warrant Agreement) and upon the Closing became a Triterras Warrant.

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Part I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

[Reserved]

Not applicable.

Not applicable.

An investment in the Company’s securities carries a significant degree of risk. You should carefully consider the following risks and other information in this Annual Report, including our consolidated financial statements and related notes included elsewhere in this Annual Report, before you decide to purchase the Company’s securities.  Additional risks and uncertainties of which we are not presently aware or that we are currently unable to predict or we currently deem immaterial could also affect our business operations and financial condition. If any of these risks actually occur, our business, financial condition, results of operations or prospects could be materially affected. As a result, the trading price of the Company’s securities could decline, and you could lose part or all of your investment.

Summary of Risk Factors

The following summary highlights some of the principal risks that could adversely affect our business, financial condition or results of operations. This summary is not complete and the risks summarized below are not the only risks we face.

Risks Related to Our Business

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Risks Related to Our Regulatory Compliance

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Risks Related to Our Securities

Our business faces many risks. We believe the risks described below are the material risks that we face. However, the risks described below may not be the only risks we face. Additional unknown risks or risks that we currently consider immaterial may also impair our business operations. If any of the events or circumstances described below actually occurs, our business, financial condition or results of operations could suffer, and the trading price of our securities could decline significantly. Investors should consider the specific risk factors discussed below, and the other information contained or incorporated by reference herein and the other documents that we file from time to time with the SEC.

Risks Related to Our Business

Our securities will be delisted from Nasdaq, which may have a material adverse effect on our business and the trading and price of our securities.

As discussed in more details in the “Explanatory Note” to this Annual Report, we expect that the Ordinary Shares and the Triterras Warrants will be delisted from Nasdaq when the Staff files a Form 25 Notification of Delisting. As at the date of the filing of this Annual Report, the Company’s securities are quoted on the OTC Expert Market on an “unsolicited only” basis.  Pursuant to Rule 15c2-11 under the Exchange Act, as of September 26, 2021, companies that do not make current information publicly available under the rule are transitioned to the OTC Expert Market. 

The delisting of our securities from Nasdaq and their limited trading on the OTC Expert Market have had and may continue to have adverse effects on our business, including the following:

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 We plan to seek to relist our Ordinary Shares and Triterras Warrants on Nasdaq as soon as practicable through the normal relisting application process. However, we cannot assure you that we will relist our securities successfully on Nasdaq or another national securities exchange, or that once relisted, our securities will remain listed thereon. An active trading market for the Company’s securities may never develop or, if developed, it may not be sustained. You may be unable to sell your Ordinary Shares and/or Triterras Warrants unless an active market for such securities can be established and sustained.

We have identified material weaknesses in our internal control over financial reporting.

Management, under the supervision of the Company’s Chief Executive Officer and the Company’s Chief Financial Officer, and oversight of the Board, conducted an assessment of the effectiveness of the Company’s internal control over financial reporting as of February 28, 2022, based on the COSO 2013 Framework. Based on this evaluation, management has determined that, as of such date, the Company did not have an effective control environment, risk assessment process, information and communication process and monitoring activities.  In light of such material weaknesses, management has concluded that the Company’s internal control over financial reporting was ineffective as of February 28, 2022. In addition, the Company has concluded that, as of February 28, 2021, the Company’s disclosure controls and procedures were not effective. See “Controls and Procedures” for discussion about such material weaknesses.

Maintaining effective disclosure controls and procedures and effective internal control over financial reporting are necessary for us to produce reliable financial statements and the Company is committed to remediating its material weaknesses in such controls as promptly as practicable. The implementation of the Company’s remediation plans has commenced. However, there can be no assurance as to when such material weaknesses will be remediated or that additional material weaknesses will not arise in the future. Any failure to remediate such material weaknesses, or the development of new material weaknesses in our disclosure controls and procedures or internal control over financial reporting, could result in material misstatements in our financial statements and cause us to fail to meet our reporting and financial obligations, or result in a restatement of our financial statements, the imposition of sanctions, including the inability of registered broker dealers to make a market in our securities, or investigation by regulatory authorities (such as the SEC), any of which in turn could have a material adverse effect on our business, financial condition and the trading price of our securities.

We are and may continue to be subject to litigation and regulatory risks that could adversely affect our business.

We are currently party to a class action lawsuit. See “Financial Information—Consolidated Statements and Other Financial Information—Legal Proceedings.” As disclosed

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in that section, it has been reported to the Court that the parties have reached an agreement in principle. The Company expects the agreement in principle to be reflected in a settlement agreement that will be submitted to and approved by the Court, but that has not yet occurred and no assurance can be given that the parties will be able to negotiate and execute a settlement agreement acceptable to each of them. We may be subject to additional litigation in the future. Defending against litigation can be expensive, time-consuming, disruptive to our operations and distracting to our management. There is a possibility that we will suffer adverse decisions or verdicts of substantial amounts or be enjoined from conducting our business as planned.

The outcome of legal proceedings, regulatory investigations and other contingencies regardless of the merits of the claims or allegations are inherently unpredictable, subject to significant uncertainties, and could be material to our operating results and cash flows for a particular period. In addition, we could suffer reputational damage or a deterioration of our relationships with customers in connection with the resolution of legal or regulatory proceedings or investigations. As a result, allegations against us, or the announcement of a legal or regulatory proceeding or investigation involving us, irrespective of the ultimate outcome of that proceeding or investigation, may harm our reputation and, as such, materially damage our business and its prospects. In recognition of these considerations, we may enter into agreements or other arrangements to settle litigation and resolve such challenges. No assurance can be given that such agreements can be obtained on acceptable terms, or that they will be approved by a court if court approval is required, or that litigation will not occur.   Any such agreements or litigation also may significantly increase our expenses. While we maintain insurance coverage for certain types of claims, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise.

Our business has initially depended on our relationship with Rhodium Resources Pte. Ltd., a physical commodity trader, to initially deliver customers and drive traffic for our platform, and any changes in this relationship may adversely affect our business, financial condition and results of operations.

Substantially all of the users of our Kratos platform during the fiscal year ended February 29, 2020 were referred to the platform by Antanium Resources Pte. Ltd. (the company formerly known as Rhodium Resources Pte. Ltd.) and its subsidiaries (“Rhodium”), an entity controlled by Mr. Srinivas Koneru.

Historically, we have relied on Rhodium to both use our platform for their transactions and to promote the use of our platform to their trading counterparties and contacts in the trade finance, credit insurance and logistics markets.

On December 1, 2020 a statutory demand for payment from Rhodium pursuant to the Singapore Insolvency, Restructuring and Dissolution Act was filed by one of its creditors. On December 17, 2020, Rhodium sought a moratorium order from a Singapore court which will shield Rhodium from creditor actions while Rhodium prepares a scheme of arrangement pursuant to the Singapore Insolvency, Restructuring and Dissolution Act to restructure its debts and continue its business as a going concern.

There have been no transactions on Kratos platform contributed by Rhodium since the last quarter of the fiscal year ended February 28, 2021. We have since aimed to expand the user base of the platform through various business activities and objectives as described under the heading “Business — Our Strategy” to become more independent of Rhodium.

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Our business is subject to user concentration risks arising from dependence on commodities produced in Indonesia.

In the fiscal year ended February 29, 2020, we derived a significant portion of our Transaction Volume from primarily oil seeds (including palm oil) and to some extent coal, produced in the Republic of Indonesia (“Indonesia”), which was the country of origin for 26% and 59% (by number) of the commodity sales facilitated for the fiscal years ended February 28, 2021 and February 29, 2020, respectively. Indonesia is an emerging market, subject to the risks described in “Risk Factors — Unexpected political events, trends and changes in policies in the countries and regions in which we operate may adversely affect our business” and other additional risks particular to Indonesia. For example, Indonesia is located in an earthquake zone and is subject to significant geological risks and has experienced terrorist attacks and social instability; any or all of these events may affect the producers of commodities who transact on our platform.

Because of the concentration of the commodities sourced in Indonesia that are transacted on our platform, our business and operations would be negatively affected if Indonesia were to experience disruptions that impact the supply of commodities. Also, other modules of Kratos depend on the Transaction Volume on our platform, and a disruption in the supply of commodities from Indonesia would adversely impact the revenues and profitability of all of our other modules.

The success of our Kratos trading platform depends on generating and maintaining ongoing, client demand for its products and services, and the failure of that demand to materialize or any future significant reduction in such demand could materially negatively affect our business.

Our trading platform uses distributed ledger technology and was implemented as an innovation of existing technology to exploit growing trends to replace physical processes with more efficient digital and automated processes. While some aspects of the system have been developed and deployed, other aspects of the platform are under continued development, and predicated on the trading community comprising suppliers, buyers, financiers, insurers, traders and brokers adopting changes in their internal processes to meet the standardized specifications of the trading platform. We launched the Kratos platform in June 2019, but we cannot assure you that we will be able to continue development of the platform or grow the platform as anticipated. In addition, the community-wide technology service envisioned by Kratos may never fully materialise or may not be as successful as envisioned due to factors beyond our control as set in this Annual Report.  

The success of our business depends on creating and maintaining a demand for our products and services with favorable margins. We anticipate that, like other distributed ledger platforms, Kratos will become more appealing as its scale grows. If we are unable to continue to add innovative services, additional lenders to provide financing and insurers to provide credit insurance, we may not be able to attract additional transactions, margins and/or users to Kratos. The ability to realize or maintain this demand could be negatively affected by numerous factors, many of which will be beyond our control and unrelated to our future work product.

Furthermore, the distributed ledger industry is characterized by rapid technological change. New technologies could emerge that might enable our competitors to offer products and services with better combinations of price and performance, or that better address client requirements, than the Kratos platform. Competitors may be able to respond more quickly and

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effectively than we can to new or changing opportunities, regulatory requirements, technologies, standards or client requirements. If we are unable to fully develop our trading platform or if our trading platform does not achieve its intended benefits, then our future growth, financial condition and results of operations may be materially adversely affected.

Additionally, Kratos is still relatively new to the industry and, if its full potential is achieved, may replace traditional physical processes of trade and trade finance. As a result, Kratos faces the same risks as any other disruptive technology, such as functionality and customer and market acceptance as well as uncertainty over practice, rules and regulations. Regulators are working to create cohesive legal and regulatory framework to support the rapid evolution of digitization in trade and trade finance and this may materially affect our ability to develop our trading platform without incurring high costs.

The platform’s Total Transaction Volume, and consequently our revenues and profits, could be materially adversely affected if we are unable to retain our current customers or financial providers and/or attract new customers or financial providers.

We must maintain and expand our customer base to drive the Total Transaction Volume necessary to maintain and increase our revenues. Our success also depends on our ability to offer competitive prices and services in an increasingly price-sensitive business. We may be unable to retain our existing customers or financial providers and or to attract new customers or financial providers, including for reasons unrelated to them. If we lose a substantial number of our current customers or financial providers, or are unable to attract new customers or financial providers, our business will be adversely affected. Furthermore, declines in our Total Transaction Volume may negatively impact the market on Kratos, which could result in lower than expected revenues from parties using the platform and could materially adversely affect our ability to retain our current customers and or attract new customers.

Additionally, there is no guarantee that new customers or suppliers will continue to use our trading platform after their onboarding or their initial use.

We are dependent on external, non-exclusive sources of funding to provide trade financing to our users and a withdrawal of a major financing source from Kratos or our inability to attract new financing providers may have a significant impact on our business and profits.

While we are not entirely dependent on liquidity and access to external sources of funding to provide trade finance on the Kratos platform, we do rely on the willingness of third party lenders and other traders using the “trade finance” sub-module to finance the transactions and provide trade credit. Some lenders are only willing to provide trade financing where credit insurance is available, so trade finance volume is also linked to the availability of credit insurance. Our ability to facilitate transactions also is significantly tied to the availability of financing options for our users, and our ability to attract diversified financing providers. The participation of financing providers on the Kratos platform is non-exclusive and does not prohibit financing providers from working with our competitors or from offering competing products. As a result of the foregoing, any of our financing providers could with minimum notice decide that working with us is not in its interest or could decide to enter into exclusive or more favorable relationships with other businesses.

More generally, the participation of financing providers on the Kratos platform may cease at any time because of events which we are unable to control, such as general market disruptions, global pandemics, regulatory changes, geopolitical conflicts, fluctuation or

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volatility in the prices of commodities or an operational problem that affects our users or our business. For example, if the commodities market begins to decline, finance providers may begin to withdraw from the sector, which may reduce the availability of trade finance on the Kratos platform. We cannot assure you that a current provider of trade finance will not withdraw from the Kratos platform or the commodities business, despite otherwise profitable dealings. Any failure to facilitate sufficient third party financing, including, on reasonable terms, could have an adverse impact on our business, financial condition, and results of operations.

We rely on our reputation in the trading industry to grow our customer base and secure financing and liquidity, and damage to our reputation or brand name may have an adverse effect on our business.

Our success significantly depends on our credibility and reputation with all of our suppliers, customers, employees, financiers insurance underwriters and logistics service providers. Our reputation could be damaged in a variety of circumstances, including, among others, prolonged disruption to services, poor quality of products and/or services, failure to perform our contractual obligations, adverse litigation judgments or regulatory decisions, unfavorable outcomes of governmental inspections, or the inability to comply with applicable legal/regulatory timelines. We have been and may increasingly become a target for public scrutiny, including complaints to regulatory agencies, negative media coverage, and malicious allegations. See “Risk Factors – Techniques employed by short sellers and/or arbitrage strategies employed by certain investors may drive down the trading price of our securities.” Negative publicity could also have a material adverse effect on our reputation, thereby affecting our business, financial condition and results of operations. Such reputational damage could lead to a decreased customer base, reduced income and higher operating costs, including the ability to attract new users of our services.

The failure of any of our critical third party service providers to fulfill their performance obligations could have a material adverse effect on operations or reputation and may cause revenue and earnings to decline.

Our trading platform is supported by external third party service providers such as cloud-computing and data storage services, internet network services, information-security protection services and add-on search and screening services. These services are based on contracts with standard service obligations to be performed by the providers. The failure of these service providers to perform their obligations as expected may disrupt our business by causing delays on our platform, security breaches or other technological issues, could result in the loss of customers and cause reputational harm to us.

We rely on the performance of our technology platform, the failure of which could have an adverse effect on our business and performance.

Our technology platform requires the continued operation of sophisticated information technology systems and networks. Our computer-based systems are vulnerable to interruption or failure due to cyber-security attacks, the introduction of viruses, malware, ransomware, security breaches, fire, power loss, system malfunction, network outages, data-entry errors, vandalism, severe weather conditions, catastrophic events, human error and other events that may be beyond our control, and our disaster recovery planning cannot account for all eventualities. System interruptions or failures, whether isolated or more widespread, could impact our ability to provide service to our customers, which could have a material adverse

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effect on our operations and reputation, and subject us to loss of customers and legal claims. Moreover, if we experience loss of critical data and interruptions or delays in our ability to perform critical functions, we may permanently lose existing customers using our Kratos platform and may not be able to attract new customers.

The application of distributed ledger technology is novel and may contain inherent flaws or limitations.

Blockchain networks are an emerging technology that offer new capabilities which are still in the process of being fully proven. As with other novel software products, the computer code underpinning blockchain networks or solutions, on which Kratos relies, may contain errors or function in unexpected ways. Insufficient testing of code, as well as the use of external code libraries, may cause the software to break or function incorrectly. Any error or unexpected functionality may impact our ability to grow and maintain our customer base. In addition, there can be no certainty that the software and network on which Kratos runs, and the related technologies, will not contain undiscovered technical flaws or weaknesses, or that the cryptographic security measures that authenticate transactions and the distributed ledger will not be compromised. Any such failure in our blockchain technology could have a material adverse effect on our financial position, reputation and results of operations.

Distributed ledger technology may not be widely adopted or may be opposed by other participants in the financial industry.

The development of blockchain networks on which we rely is a new and rapidly evolving industry that is subject to a high degree of uncertainty. Factors affecting the further development of the blockchain industry that may affect our operations include:

Our business model is dependent on continued investment in and development of the blockchain industry and related technologies. If investments in the blockchain industry become less attractive to investors or innovators and developers, or if blockchain networks do not gain wide public acceptance or are not adopted and used by a substantial number of individuals, companies and other entities, it could have a material adverse impact on our prospects and our operations.

In addition, other participants in the financial industry (including certain regulators) and other industries may oppose the development of products and services that utilize distributed ledger technology. The market participants who may oppose such products and services may include entities with significantly greater resources, including financial resources, technical expertise and human resources, than we have. Our ability to operate and achieve our

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commercial goals could be adversely affected by any actions of any such market participants that result in additional regulatory requirements or other activities that make it more difficult for us to operate.

Notwithstanding any potential intellectual property rights that we may acquire, competitors may independently develop products or services similar to or better than ours.

While we may acquire certain intellectual property rights over the distributed ledger technology and the application that underlies the development of our Kratos platform, we do not have exclusive rights to the technology. Other businesses may exploit similar opportunities by using the same technology to develop similar or better products or services. If competitors are able to market such products or services first, our future growth plans and financial position may be adversely affected. Moreover, if a competitor develops or obtains exclusive rights to any or all of the technology that we use in the development of our platform, we may have to cease using such technology, which may impair our ability to advance the development of our trading platform without significant additional time and costs, if at all.

In addition, to meet the rapid evolution of technology and market expectations, our trading platform together with its underlying programs and software, need to be continually improved and developed. Improvements in technology generally lead users and customers to expect better products and services, and a failure to meet those expectations may cause our customers to choose the products and services offered by our competitors. As a result, failure to innovate or improve our platform and technology may impact our long-term success.

We may not be able to implement our business plans successfully in a timely manner, or at all.

Our business plans (as described in detail under the heading “Business — Our Strategy” below) is based on assumptions of future events which may entail certain risks and are inherently subject to uncertainties which are beyond the Company’s control, such as changes in the industry, availability of funds, sufficiency of manpower, competition, government policies and political and economic developments. These assumptions may not be correct, which could affect the commercial viability of our business plans. As such, we cannot assure you that our business plans will be implemented successfully or at all. If we fail to effectively and efficiently implement our business plans, we may not be successful in achieving desirable and profitable results.

Our growth plans rely on our ability to increase the number of new and existing customers using our Kratos platform. We launched Kratos platform in June 2019, and it is a relatively new technology for trading and trade finance, which traditional players may be reluctant to adopt. Our expectations for the number of projected customers using Kratos platform may not be accurate and our reliance on this growth model may not be successful. In addition, we may not be able to fully achieve our customer growth goals due to the offering of similar digital platforms by our competitors or potential changes in the commodities market affecting demand such as the global impact of the COVID-19 pandemic on the demand and supply of commodities, and we may not fully achieve our goals in evolving our business. We cannot assure you that we will be able to grow Kratos platform, which may have an adverse effect on our business, financial condition and results of operations.

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Our ability to access capital markets could be limited.

From time to time, we may need to access the capital markets to obtain short-term or long-term financing. However, our ability to access the capital markets for financing could be limited by, among other things, our existing capital structure and credit ratings, and the delisting of our securities. See “Risk Factors – Our securities will be delisted from Nasdaq, which may have a material adverse effect on our business and the trading and price of our securities.” In addition, volatility and weakness in capital markets, including as a result of the COVID-19 pandemic, may adversely affect credit availability and related financing costs. The capital markets can experience periods of volatility and disruption. If the disruption in these markets is prolonged, our ability to obtain new credit or refinance existing obligations as they become due, on acceptable terms, if at all, could be adversely affected.

We have a limited operations history and are subject to material risks, and are therefore not assured to be profitable.

We have a limited operating history on which an investor might evaluate our business and future prospects. Our business is therefore subject to many of the risks common to early-stage enterprises, including under-capitalization, cash shortages, limitations with respect to personnel and financing sources and lack of revenues, any of which could have a material adverse effect on us and may force us to reduce or curtail our operations. In addition, the Kratos platform is nascent, and subject to material legal, operational, reputational, tax and other risks, including those applicable due to its use of distributed ledger technology and, as such, the likelihood of our continued successful operations must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with a business operating in a relatively new, highly competitive, and developing industry. Consequently, predicting our future transaction volume, trade finance volume, revenue and appropriately budgeting for our expenses is difficult, and we have limited insight into trends that may emerge and affect our business. If actual results differ from our estimates or if we adjust our estimates in future periods, our operating results and financial position could be materially and adversely affected.

As a result of the foregoing risks, there is no assurance that we will achieve a return on shareholders’ investments and our likelihood of success must be considered in light of the uncertainties encountered by early-stage enterprises in a competitive environment. Even if we accomplish our objectives, we may not generate positive cash flows or profits in the near term, or at all.

We may be unable to achieve the anticipated benefits from the Business Combination, or any existing or future acquisitions, joint ventures, investments or dispositions.

We expect to continue to evaluate and seek to achieve our growth objectives by (i) optimizing our offerings to meet the needs of our customers through organic development, including by acquiring new customers and implementing operational efficiency initiatives, (ii) securing acquisitions, joint ventures, strategic investments and alliances, and dispositions and (iii) implementing our transformational strategy in connection with the Business Combination. At any given time, we may be engaged in discussing or negotiating a range of these types of transactions. If we are unable to successfully execute on our strategies to achieve our growth objectives, including with respect to any particular transaction or drive operational efficiencies, or if we experience higher than expected operating costs that cannot be adjusted accordingly, our growth rates and revenues could be adversely affected.

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In addition, competition for acquisitions in the markets in which we operate has grown in recent years, and may increase costs of acquisitions or cause us to refrain from making certain acquisitions. We may also be subject to increasing regulatory requirements, heightened restrictions on and scrutiny of or all investments, and acquisitions under the anti-monopoly and competition laws, rules and regulations, the risk that acquisitions or investments may fail to close, due to foreign ownership restriction and prohibition, political and regulatory challenges or protectionist policies, as well as related compliance and publicity risks. Achieving the expected returns and synergies from existing and future acquisitions will depend in part upon our ability to integrate the products and services, technology, administrative functions and personnel of these businesses into our product lines in an efficient and effective manner. We cannot assure you that we will be able to do so, or that the acquired businesses will perform at anticipated levels or that we will be able to obtain these synergies. Management resources may also be diverted from operating our existing businesses by certain acquisition integration challenges. If we are unable to successfully integrate acquired businesses or generate the projected revenue from investments made, our anticipated revenues and profits may be lower. Our profit margins may also be lower, or diluted, following the acquisition of companies whose profit margins are less than those of our existing businesses.

Further, we may incur earn-out and contingent consideration payments in connection with future acquisitions, which could result in a higher-than-expected impact on our future earnings. We may also finance future transactions through debt financing, including the issuance of our equity securities, the use of existing cash, cash equivalents or investments or a combination of the foregoing. Acquisitions financed with debt could require us to dedicate a substantial portion of our cash flows to principal and interest payments and could subject us to restrictive covenants.

Future acquisitions financed with our own cash could deplete the cash and working capital available to fund our operations adequately. Difficulty borrowing funds, selling securities or generating sufficient cash from operations to finance our activities may have a material adverse effect on our results of operations.

We may also decide from time to time to dispose of assets or product lines that are no longer aligned with our strategic objectives and we deem to be non-core. Once a decision to divest has been made, there can be no assurance that a transaction will occur, or if a transaction does occur, there can be no assurance as to the potential value created by the transaction. The process of exploring strategic alternatives or selling a business could negatively impact customer decision-making, cause uncertainty and negatively impact our ability to attract, retain and motivate key employees. In addition, we may expend costs and management resources to complete divestitures. Any failures or delays in completing divestitures could have an adverse effect on our financial results and on our ability to execute our strategy.

We may underestimate resources required to complete a project.

Although we have processes in place to control resources involved in the development and delivery of products and services, there is a risk that the team implemented processes will not be effective, be it due to insufficient planning or uncontrollable external circumstances. This can result in rushed deliveries of products and solutions that do not meet our service standards, which can result in negative opinion from trading participants. Alternatively, we may be required to seek additional resources that were not included in the budgeting process, which could result in a lower profit margin or negative return on investment.

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We have an evolving business model.

As blockchain technologies become more widely available and government regulations adapt to digitized registries private or public, we expect the services and products associated with them to evolve. As a result, to stay current with the industry, our business model may need to evolve as well. From time to time we may modify aspects of our business model relating to our product mix and service offerings. We cannot offer any assurance that these or any other modifications will be successful or will not result in harm to the business. We may not be able to manage growth effectively, which could damage our reputation and negatively affect our operating results.

We operate in a highly competitive market.

Our business is highly competitive and the markets in which we compete are rapidly evolving, subject to shifting customer needs and rapidly changing technology. Many of the companies that do and may potentially compete with us are larger, more established and better capitalized than we are. While we believe that the further development of the Kratos platform will give us a competitive advantage, we expect competition in our digital market to intensify. Increased competition may reduce the growth in our customer base and result in higher selling and promotional expenses. If we fail to sustain our competitive advantages, our business, results of operations and financial position may be materially and adversely affected.

We may not adjust our expenses quickly enough to match a significant deterioration in global financial markets.

Global recessions and other economic downturns may happen quickly, resulting in severe declines in total Transaction Volume and revenue, which may put stress on our ability to adjust costs and expenses to match. A failure to successfully adjust our costs and expenses may reduce margins and or result in losses. If we are unable to adjust expenses, one or more of our major customers or lenders may decide to stop using our products or services, which may have a substantial impact on our business.

Global developments in the area of environmental, social and corporate governance as well as stringent environmental regulation could adversely impact us by increasing our compliance costs and could have a material adverse effect on our results and financial condition.

Global developments in the area of environmental, social and corporate governance (collectively, “ESG”) may result in investors, lenders and customers withdrawing from some industry segments seen to be negatively impacting their ESG principles. For example, palm oil plantations is known to be a large contributor of deforestation in Indonesia, which has resulted in banks and other financial institutions implementing ESG-related certifications for palm oil financing. If palm oil producers are unable to meet these certification requirements, the ability of such producers to obtain financing would be impacted negatively. In particular, this could impact Transaction Volume in the coal market, which represented 7% of the commodity trades (by value) facilitated by Kratos, and the palm oil market which represented a substantial portion of the 21% of Kratos commodity trades (by value) attributable to oil seeds, each for the fiscal year ended February 28, 2021.

In addition, the palm oil and coal industries are subject to stringent environmental regulation. There has been a broad range of proposed and promulgated state, national and

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international regulation aimed at reducing the effects of climate change. Such regulations apply or could apply in countries where we have interests or could have interests in the future and/or could affect our Kratos platform. Such regulation could result in additional costs in the form of taxes and investments of capital to maintain compliance with laws and regulations.

Environmental regulations, including those in response to climate change, continue to evolve, and while it is not possible to accurately estimate either a timetable for implementation or our future compliance costs relating to implementation, it is possible that such regulation could have a material effect in the foreseeable future on our business, results of operations, capital expenditures or financial position.

Unexpected political events, trends and changes in policies in the countries and regions in which we operate may adversely affect our business.

Our customers operate in a large number of geographic regions and countries, some of which are categorized as developing, complex or having unstable political or social climates and, as a result, we are exposed to risks resulting from differing legal and regulatory environments, political, social and economic conditions and unforeseeable developments in a variety of jurisdictions. Our operations are subject to the following risks, among others:

Our overall success as a global business depends on us and, in part, on our customers’ ability to anticipate and effectively manage these risks, and there can be no assurance that we or our customers will be able to do so without incurring unexpected costs. If our customers are not able to manage the risks related to international operations, their own trading volume and,

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consequently, their total trading volume on our platform, could decline, which would negatively impact our business, financial condition and results of operations.

We have had, and continued to experience, delays in collection of receivables which has increased our working capital cycle days.

We have had, and continue to experience, delays in collection of receivables which is in large part due to liquidity issues faced by our customers because of COVID-19. We do not anticipate any significant defaults in collections. Delays in the collection of accounts receivable are likely to have a negative impact on the Company’s operating cash flows

The extent to which the COVID-19 pandemic and measures taken in response may impact our business, results of operations, liquidity and financial condition is uncertain and difficult to predict.

The COVID-19 pandemic and the resulting weakening of the global economy, rapid increase in unemployment rates and a reduction in trading activity and business confidence may have a significant impact on our customers. These conditions may affect the number of new customers on our platform, the number of trades conducted on our platform or the transactions performed using our solutions, each of which is difficult to predict and any of which could adversely affect our operating results and financial condition on both a short-term and long-term basis. In addition, the measures taken by governments in response to COVID-19 may continue to reduce international trading activity, which may reduce Total Transaction Volume on our platform.

While we believe the COVID-19 pandemic will increase the importance and prominence of digital financial solutions such as Kratos, the increased economic uncertainty and reduced economic activity, including in the trade and trade finance sectors, may delay the further development of Kratos or result in less than anticipated customer and Total Transaction Volume growth.

Other factors related to the COVID-19 pandemic that may adversely impact our business operations include:

Natural disasters or other unanticipated catastrophes could impact our results of operations.

The occurrence of natural disasters, such as hurricanes, floods or earthquakes, pandemics or other unanticipated catastrophes at any of the locations in which our key customers do business may cause a decrease in demand for the commodities traded over our

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platform. The COVID-19 global pandemic has severely disrupted business operations, supply chain and workforce availability across the world, leading to substantial declines in business activities that have negatively impacted and may continue to negatively impact our business, financial condition and results of operations. The COVID-19 pandemic also presented and will continue to present challenges to our business operations as well as our customers, funders and others that we closely work with, such as closure of offices and facilities, disruptions to or even suspensions of normal business and logistics operations, as well as restrictions on travel. As the COVID-19 pandemic continues, or if any other global or regional pandemic emerges or if there is a similar outbreak or any natural disaster or weather event in a region in which we or our customers do business, the Total Transaction Volume of commodities traded on the platform may decrease, which would negatively affect our financial condition and results of operations.

Significant developments and potential changes in U.S.-China trade policies may significantly decrease demand for commodities in China.

The United States government has indicated its intent to alter its approach to international trade policy and in some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements and treaties with foreign countries. For example, since 2018, the United States and China have been in a trade dispute that has resulted in the imposition of tariffs on certain goods imported from China, which has had, and may continue to have, an effect on the Chinese economy and may in the future lead to a contraction of certain Chinese industries. In response, China has imposed retaliatory tariffs on certain products imported from the United States, including soybeans. The trade agreement which  the United States and China signed  in January 2020 expired in December 2021 and most of the previously-implemented tariffs on goods imported from China remain in place, and uncertainty remains as to the short-term and long-term future of economic relations between the United States and China.

A significant portion of the commodities traded on our platform are for delivery in China, which was the discharge country for 39% and 24% (by number) of the commodity sales facilitated by Kratos for the fiscal years ended February 28, 2021 and February 29, 2020, respectively. These commodities, such as soybeans and corn from the United States, have been affected by the trade dispute between the United States and China and the economic uncertainty related to U.S. trade policies in general. It remains unclear what the United States or other governments will do with respect to tariffs, international trade agreements and policies on a short-term or long-term basis. Disruptions to the trade flows may continue for long periods, resulting in declines in the Total Transaction Volume on our platform and consequently, our revenues, and we cannot predict future trade policy or the terms of any renegotiated trade agreements and their impacts on our business. The adoption and expansion of trade restrictions, the occurrence of a trade war, or other governmental action related to tariffs or trade agreements or policies has the potential to further adversely impact our business, financial condition and results of operations.

Our business depends on our ability to attract and retain high quality management staff and employees.

Our business depends on the continued service and performance of our management team and key employees. Our founder, Mr. Srinivas Koneru, has over 35 years of entrepreneurial experience of which over 20 years have been in technology, including co-founding a business software and solutions company before selling this business in 2010. Since

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2012, Mr. Koneru’s experience has been as a founder and owner of Rhodium and our business substantially depends on his unique experiences in both the technology and the trading and trade finance industry to inform and guide the design and deployment of Kratos. Likewise, Mr. Koneru has built a management leadership team that has complementary skill sets in technology development and trade industry experience. He is critical to the execution of our vision, culture and strategic direction.  The loss of services of Mr. Koneru could diminish our business and growth opportunities and our relationships and networks with our traders.

Our business is in its development stage and we have not identified all the persons that we will need to hire to provide services and functions critical to the development of the business. In a highly competitive talent market, we often compete with much larger organizations, with potentially greater financial resources that can offer higher compensation and other benefits to attract experienced individuals to join our business. Further, we face the risk that even if we are able to hire such persons, key employees may be drawn away to join competitors, or to start their own business or for other reasons. Our inability to retain or attract, train and motivate the necessary calibre of employees could materially impact our ability to effectively undertake and grow our business and could have a material adverse effect on our financial condition and results of operations.

Recent changes in our management team may be disruptive to, or cause uncertainty in, our business, results of operations, financial condition, and the market price of our securities.

The Company implemented significant changes in the composition of its Board and committees of the Board in 2021 (see “Explanatory Note” to this Annual Report for additional information regarding such changes to our Board and our Board committees). In addition, as previously disclosed, the Company has been contemplating a plan to consolidate its senior operating leadership teams in either one of its two locations, Singapore or Dubai, United Arab Emirates and, further, Mr. John Galani, Chief Operating Officer, resigned from his position as the Chief Operating Officer of the Company to pursue other opportunities, effective February 11, 2022.

The forgoing changes to our management may be disruptive to or cause uncertainty in our business. The failure to ensure a smooth transition and effective transfer of knowledge involving our directors and senior employees could also negatively affect our business. These matters could have a material adverse impact on our results of operations, financial condition, and the market price of our securities.

Cyber-attacks and other security breaches could have an adverse effect on our business.

In the normal course of our business, we collect, process and retain sensitive and confidential information regarding our users. We also have arrangements in place with certain of our third party service providers that require us to share consumer information. Although we devote significant resources and management focus to ensuring the integrity of our systems through information security and business continuity programs, our facilities and systems, and those of our users and third party service providers, are vulnerable to external or internal security breaches, acts of vandalism, computer viruses, misplaced or lost data, programming or human errors, and other similar events. We also face security threats from malicious third parties that could obtain unauthorized access to our systems and networks, which threats we anticipate will continue to grow in scope and complexity over time. These events could interrupt our business or operations, result in significant legal and financial exposure, liability,

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damage to our reputation and a loss of confidence in the security of our systems, products and services. We cannot assure you that these events will not have a material adverse effect on us.

Information security risks in the fintech industry have increased recently, in part because of new technologies, the use of the internet and telecommunications technologies (including mobile devices) to conduct financial and other business transactions and the increased sophistication and activities of organized criminals, perpetrators of fraud, hackers, terrorists and others. In addition to cyber-attacks and other security breaches involving the theft of sensitive and confidential information, hackers recently have engaged in attacks that are designed to disrupt key business services, such as consumer-facing websites. We may not be able to anticipate or implement effective preventive measures against all security breaches of these types, especially because the techniques used change frequently and because attacks can originate from a wide variety of sources. We employ detection and response mechanisms designed to contain and mitigate security incidents. Nonetheless, early detection efforts may be thwarted by sophisticated attacks and malware designed to avoid detection. We also may fail to detect the existence of a security breach related to the information of our users that we retain as part of our business and may be unable to prevent unauthorized access to and illegal use of that information.

While we regularly conduct security assessments of significant third party service providers, no assurance is given that our third party information security protocols are sufficient to withstand a cyber-attack or other security breach. The access by unauthorized persons to, or the improper disclosure by us of, confidential information regarding our users or our own proprietary information, software, methodologies and business secrets could interrupt our business or operations, result in significant legal and financial exposure, liability, damage to our reputation or a loss of confidence in the security of our systems, products and services, all of which could have a material adverse impact on our business.

The Triterras Warrants are accounted for as liabilities and the changes in value of the Triterras Warrants could have a material effect on our financial results.

The Triterras Warrants are derivative liabilities measured at fair value and presented as a liability in the consolidated statement of financial position.  At each reporting date, changes in fair value are recognized as a non-cash gain or loss in earnings in the consolidated statement of comprehensive income. As a result of the recurring fair value measurement, our consolidated financial statements and results of operations may fluctuate, based on factors, which are outside of our control. Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on the Triterras Warrants each reporting period and that the amount of such gains or losses could be material.

Risks Related to Our Regulatory Compliance

We need to comply with U.S. financial reporting rules and regulations and other requirements of the SEC and Nasdaq, and have incurred high costs as a result of being a public company.

After the consummation of the Business Combination, we have been a U.S. reporting company, and therefore are required to comply with reporting, disclosure control and other applicable obligations under, without limitation, the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-

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Frank Act”), as well as rules adopted, and to be adopted, by the SEC. As a result, we have incurred higher legal, accounting and other expenses, and these expenses may increase in the future. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives, while at the same time remaining focused on our existing operations and business growth. We have incurred legal, accounting, insurance and other expenses, including costs in connection with compliance with public company reporting requirements and listing rules.

We also have incurred significant costs in connection with or as a result of the anticipated delisting by Nasdaq of our securities (including communication with Nasdaq, and assessment of alternatives for continued trading of our securities in the United States), or our remediation of our material weaknesses in internal control over financial reporting. See “Explanatory Note” to this Annual Report for additional information regarding the delisting of our securities, and “Controls and Procedures” for additional information regarding such material weaknesses and such remediation process.

We expect that we will continue to incur significant costs associated with complying with applicable laws, regulations and listing rules, including certain corporate governance provisions of the Sarbanes-Oxley Act and the Dodd-Frank Act, related rules and regulations of the SEC. Among other things, we must:

The expenses incurred by public companies generally for reporting and corporate governance purposes have been increasing. We expect applicable laws and regulations to increase its legal and financial compliance costs and to render some activities more time-consuming and costly, although we are currently unable to estimate these costs with any degree of certainty. We may need to hire more employees or engage outside consultants to comply with these requirements, which will increase its costs and expenses accordingly. These laws and regulations could make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. Furthermore, if we are unable to satisfy its obligations as a public company, it could be subject to fines, sanctions and other regulatory action and potentially civil litigation.

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Our governance, risk management, compliance, audit and internal controls processes might be unable to prevent, detect or remedy behaviors that are incompatible with relevant legal requirements or our own ethical or compliance standards, which could in turn expose us to sanctions, regulatory penalties, civil claims, tax claims, damage to our reputation, accounting adjustments or other adverse effects.

We have devoted substantial efforts to maintain and improve our governance, internal controls and integrity programs and policies by strengthening our compliance and internal control systems and investing in our information systems and information technology infrastructure. We are also exposed to risk from potential non-compliance with policies, employee misconduct or negligence and fraud, which could result in serious reputational or financial harm. As our target customers are the small to medium sized entities (“SMEs”) in the trading and trade finance community, most of the players may not have proper establishments like physical offices and corporate websites. It is a common and legal practice in certain jurisdictions that the companies especially SMEs have nominee directors and corporate secretaries’ addresses used as registered address. In recent years, a number of market participants have suffered material losses due to the actions of “rogue traders” or other employees. Nevertheless, despite these efforts, we cannot assure you that our governance, risk management, compliance, audit and internal controls processes will be able to prevent, detect or remedy all behaviors that are incompatible with the applicable legal requirements or our own ethical or compliance standards, and any deficiency or breach could expose us to sanctions, regulatory penalties, civil claims, tax claims, monetary losses, accounting errors or adjustments, reputational damages or other adverse effects. See “Controls and Procedures” and also “Risk Factors – We have identified material weaknesses in our internal controls over financial reporting” for additional information regarding related risks.” for information regarding risks related to material weaknesses identified in our internal control over financial reporting.

Our compliance and risk management programs might not be effective and may result in outcomes that could adversely affect our reputation, financial condition and operating results.

Our ability to comply with applicable laws and rules, including, without limitation compliance with privacy laws and data security laws, and compliance costs across different legal systems,  trade barriers or restrictions, including significant delays in or even suspensions of customs clearance, which may be applicable to transactions conducted on Kratos platforms, is largely dependent on our establishment and maintenance of compliance, review and reporting systems, as well as our ability to attract and retain qualified compliance and other risk management personnel. We face the risk of significant intervention by regulatory authorities, including extensive examination, monitoring and surveillance activity.

While we continue to upgrade and enhance our information security infrastructure, including, in 2021 achieving IS0/IEC 27001:2013 certification, an international standard for the management of information security, we cannot assure you that our compliance policies and procedures will be effective or that we will be successful in monitoring or evaluating our risks. All compliance and “know your client” (“KYC”) checks have been conducted to the best of our ability and extent of information available. However, there are limitations to the access of information due to the nature of operations of the platform as a service provider, as we are only facilitating trades and not processing payments. We do not have control and oversight on the trade documents which were transacted between the counterparties nor do we have custody of the customers’ funds. In the case of alleged non-compliance with applicable laws or

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regulations, we could be subject to investigations and judicial or administrative proceedings that may result in substantial penalties or civil lawsuits, including by customers, for damages, which could be significant. Any of these outcomes may increase our compliance costs and obligations, subject us to additional risks and adversely affect our reputation, financial condition and operating results.

We may become subject to the requirements of the Investment Company Act, which would limit our business operations and require us to spend significant resources to comply with such act.

Section 3(a)(1)(C) of the Investment Company Act defines an “investment company” as an issuer that is engaged in the business of investing, reinvesting, owning, holding or trading in securities, or owns investment securities having a value exceeding 40% of the issuer's unconsolidated assets, excluding cash items and securities issued by the U.S. federal government.  Although we will not engage primarily or hold ourselves out as being engaged primarily in the business of investing, reinvesting or trading in securities, we currently own securities in a third party that might have a value exceeding 40% of our unconsolidated assets. See “Operating and Financial Review and Prospects – Operating Results – Investment into a Cayman Islands fund, Trade Credit Partners Ltd. in August 2021 and in September 2021.” We have monitored and our holdings in such securities to ensure continuing and ongoing compliance with this test.

A company that falls within the scope of Section 3(a)(1)(C) of the Investment Company Act can avoid being regulated as an investment company if it can rely on certain of the exclusions or exemptions under the Investment Company Act. One such exclusion is Rule 3a-2 under the Investment Company Act. Rule 3a-2 of the Investment Company Act provides that inadvertent or transient investment companies will not be treated as investment companies subject to the provisions of the Investment Company Act, provided the issuer has the bona fide intent to be engaged in a non-investment business, evidenced by the issuer’s business activities and a specific resolution of the issuer’s board of directors, within one year from the commencement of the earlier of (1) the date on which the issuer owns securities and/or cash having a value exceeding 50% of the value of such issuer's total assets on either a consolidated or unconsolidated basis, or (2) the date on which an issuer owns or proposes to acquire investment securities (as defined in section 3(a) of the Investment Company Act) having a value exceeding 40% of the value of such issuer's total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. On November 30, 2021, our Board adopted the Rule 3a-2 resolution evidencing our bona fide intent to be engaged in a non-investment business. The Company plans to reduce its investment in Trade Credit Partners to a level, and otherwise conduct our business in a manner, that does not subject us to the registration and other requirements of the Investment Company Act. Due to the one-year restriction of Rule 3a-2 discussed above, we may not be able to dispose our securities in Trade Credit Partners Ltd at the price that would be otherwise satisfactory to us, and we may incur losses as a result.

The consequences of becoming an investment company, both in terms of the restrictions it would have on us and the cost of compliance, would be significant. For example, in addition to expenses related to initially registering as an investment company, the Investment Company Act also imposes various restrictions with regard to our capital structure and corporate governance, our ability to enter into affiliated transactions, the diversification of our assets and our ability to borrow money and compensate key employees. If we became subject to the Investment Company Act at some point in the future, our ability to continue pursuing our

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business plan would be severely limited, our agreements and arrangements with our affiliates may be impaired, and our business, results of operations and financial condition could be materially adversely affected.

Any failure to comply with the anti-corruption laws of the United States and various international jurisdictions could negatively impact our reputation and results of operations.

We are required to comply with anti-corruption laws and regulations imposed by jurisdictions in which we operate, including the U.S. Foreign Corrupt Practices Act (“FCPA”) the U.K. Bribery Act 2010 (“UK Bribery Act”) and Prevention of Corruption Act, Chapter 241, Singapore (“PCA”). The FCPA, the UK Bribery Act and the PCA prohibit us and our officers, directors, employees and business partners acting on our behalf, including agents, from corruptly offering, promising, authorizing or providing anything of value to “foreign officials” for the purposes of influencing official decisions or obtaining or retaining business or otherwise obtaining favorable treatment. The laws also prohibit non-governmental “commercial” bribery and accepting bribes. As part of our business, we deal with governments and state-owned business enterprises, the employees and representatives of which may be considered “foreign officials” for purposes of the FCPA and the UK Bribery Act. Similarly, under the PCA, corruption in Singapore is broadly defined as a bribe offered in return for a favour. The bribe can be in the form of monetary or non-monetary nature. This includes, money, gifts, loans, fees, rewards, commissions or other property of any description, any office, employment or contract, any payment, release, discharge or liquidation of any loan, obligation or other liability, any other service, favour or advantage of any description, or any offer, undertaking or promise of any gratification and all corruption cases, whether it involves public or private sector individuals or members of the public are investigated by the relevant authorities. We may be subject to the jurisdiction of various governments and regulatory agencies around the world, which may bring our personnel and representatives into contact with “foreign officials” responsible for issuing or renewing permits, licenses or approvals or for enforcing other governmental regulations.

In addition, some of the jurisdictions in which we operate lack a developed legal system and have elevated levels of corruption. Our international operations expose us to the risk of violating, or being accused of violating, anti-corruption laws and regulations. Our failure to successfully comply with these laws and regulations may expose us to reputational harm, as well as significant sanctions, including criminal fines, imprisonment, civil penalties, disgorgement of profits, injunctions and debarment from government contracts, as well as other remedial measures. Investigations of alleged violations can be expensive and disruptive. We maintain policies and procedures designed to comply with applicable anti-corruption laws and regulations. However, there can be no guarantee that our policies and procedures will effectively prevent violations by our employees or business partners claiming to act on our behalf, including agents, for which we may be held responsible, and any such violation could adversely affect our reputation, business, financial condition and results of operations.

Risks Related to Our Securities

The trading price of the Company’s securities has been and may continue to be volatile, which could result in substantial losses to investors may be volatile.

Our Ordinary Shares and Triterras Warrants have been listed on Nasdaq since the closing of the Business Combination on November 10, 2020. As discussed in greater detail in the “Explanatory Note” of this Annual Report, we expect that our Ordinary Shares and the

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Triterras Warrants will be delisted from Nasdaq.  As of the date of this Annual Report, our Ordinary Shares and Triterras Warrants are quoted on the OTC Expert Market under the symbol “TRIRF” and “TRIRW”, respectively. The OTC Expert Market is a significantly more limited market than Nasdaq and trades on the OTC Expert Market are limited primarily to private purchases and sales among sophisticated investors with sufficient investment experience, among others.

The quotation of our Ordinary Shares and Triterras Warrants on the OTC Expert Market may result in a less liquid market available for existing and potential investors to trade our securities, could depress the trading price of our securities and could have a long-term adverse impact on our ability to raise capital in the future.

The trading price of the Company’s securities have been, and may continue to be, volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control. Any of the factors listed below could have a material adverse effect on the investment in the Company’s securities and the securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of our securities may not recover and may experience a further decline.

Factors affecting the trading price of our securities may include:

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Broad market and industry factors may materially harm the market price of our securities irrespective of our operating performance. The securities market in general has experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected.  The trading prices and valuations of these stocks, and of our securities, may not be predictable. A loss of investor confidence in the market for securities of other companies which investors perceive to be similar to us could depress the price of the Company’s securities regardless of our business, prospects, financial conditions or results of operations.  A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

Techniques employed by short sellers and/or arbitrage strategies employed by certain investors may drive down the trading price of our securities.

Short selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. As it is in the short seller’s interest for the price of the security to decline, many short sellers publish, or arrange for the publication of, negative opinions regarding the relevant issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling a security short. These short attacks have, in the past, led to selling of shares in the market.

We believe that we have been the subject of short selling. On January 14, 2021, a short seller, Phase 2 Partners LLC published the Short Report. The Company believes the allegations in the Short Report lacked either factual support or material basis and issued public announcements on January 18, 2021 and January 25, 2021 setting out our position and announcing that the Audit Committee initiated the Investigation. In connection with this Investigation, the Audit Committee engaged various third-party external advisers, to assist the Audit Committee to carry out this Investigation. On October 28, 2021, after expending considerable resources conducting the Investigation and analyzing the work carried out by external advisers, the Audit Committee concluded that the allegations contained in the Short Report lacked either factual support or material basis. Accordingly, the Audit Committee has concluded that those allegations do not require additional action by the Company.

We may in the future again become the subject of short selling and the target of harassing or other detrimental conduct by third parties. If such situation occurs, we may have to expend a significant number of resources to investigate such allegations. Such a situation could be costly and time-consuming, and could distract our management from growing our business. Even if such allegations are ultimately proven to be groundless, allegations against us could result in litigation or regulatory enforcement actions, or otherwise could have a material adverse effect on our business, financial condition, results of operation, cash flows, and reputation, and any investment in our securities could be greatly reduced or even rendered worthless.

Furthermore, many investors in, and potential purchasers of, our securities may employ, or seek to employ, arbitrage strategies with respect to the Triterras Warrants. Investors in the Triterras Warrants would typically implement such a strategy by selling short the Ordinary Shares underlying the Triterras Warrants and dynamically adjusting their short

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position while continuing to hold the Triterras Warrants. Investors in the Triterras Warrants may also implement this type of strategy by entering into swaps on the Ordinary Shares in lieu of or in addition to short selling the Ordinary Shares. The market activity related to such arbitrage strategy could adversely affect prevailing trading prices of our securities.

Reports published by analysts, including projections in those reports that differ from Triterras’ actual results, could adversely affect the price and trading volume of our Ordinary Shares.

We expect that securities research analysts will establish and publish their own periodic projections for our business.  These projections may vary widely and may not accurately predict the results Triterras actually achieves. The Company’s Ordinary Share price may decline if actual results do not match the projections of these securities research analysts. Similarly, if one or more of the analysts who write reports downgrades the Company’s securities or publishes inaccurate or unfavorable research about Triterras’ business, the Company’s Ordinary Share price could decline. See also “Risk Factors – Techniques employed by short sellers and/or arbitrage strategies employed by certain investors may drive down the trading price of our securities.” If one or more of these analysts ceases coverage or fails to publish reports regularly, the Company’s Ordinary Share price or trading volume could decline. While the Company expects some research analyst coverage of the Company but if no analysts maintain coverage of Triterras, the trading price and volume for the Company’s Ordinary Shares could be adversely affected.

Fluctuations in operating results, earnings and other factors, including incidents involving Triterras’ customers and negative media coverage, may result in significant decreases or fluctuations in the price of Triterras securities.

The stock markets experience volatility. These broad market fluctuations may adversely affect the trading price of our Ordinary Shares and, as a result, there may be significant volatility in the market price of our Ordinary Shares.  Separately, if the Company is unable to generate the revenues that investors may expect, the market price of our Ordinary Shares will likely decline. In addition to operating results, many economic and seasonal factors outside of the Company’s control could have an adverse effect on the price of our Ordinary Shares and increase fluctuations in its earnings. These factors include certain of the risks discussed in this Annual Report, operating results of other companies in the same industry, changes in financial estimates or recommendations of securities analysts, speculation in the press or investment community, negative media coverage or risk of proceedings or government investigation, change in government regulation, foreign currency fluctuations and uncertainty in tax policies, the possible effects of war, terrorist and other hostilities, other factors affecting commodities trading and trade finance (including pandemics), adverse weather conditions, changes in general conditions in the economy or the financial markets or other developments affecting the commodities trading industry.

Future sales, or the perception of future sales, by us or our existing securityholders may cause the market price of our securities to drop significantly.

Our securities are expected to be delisted from Nasdaq. See the “Explanatory Note” to this Annual Report for more information regarding the delisting of our securities. Our securityholders have sold our securities in anticipation of the delisting, which has caused the market price of our securities to drop significantly. The sale of our securities in the public market, or the perception that such sales could occur, including sales by our existing

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securityholders and the conversion of the Triterras Warrants, may continue to occur and could harm the prevailing market price of our securities. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

Following the effectiveness of the registration statement which is required to be filed under the Registration Rights Agreement, substantially all of the Company’s securities may be sold in the open market or in privately negotiated transactions, which could have the effect of increasing the volatility in the price of the Company’s securities or putting significant downward pressure on the price of the Company’s securities. However, in light of the delisting of our securities from Nasdaq, the timing of our filing of such registration statement remains uncertain.

Our Triterras Warrants will become exercisable for Ordinary Shares, which would increase the number of securities eligible for future resale in the public market and result in dilution to our shareholders, and may adversely affect the market price of our Ordinary Shares.

Outstanding Triterras Warrants to purchase an aggregate 25,981,000 Ordinary Shares of the Company became exercisable on December 11, 2020, which is thirty (30) days after the closing of the Business Combination. The exercise price of these Triterras Warrants is $11.50 per share, subject to adjustments. To the extent such Triterras Warrants are exercised additional Ordinary Shares will be issued, which will result in dilution to the holders of Ordinary Shares and increase the number of securities eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of our Ordinary Shares. However, the trading of our Ordinary Shares and Triterras Warrants on Nasdaq has been suspended since the open of business on February 3, 2022, which likely will influence our investors’ decisions whether to convert.

The Company may issue additional Ordinary Shares or other securities without shareholder approval, which would dilute existing ownership interests and may depress the market price of its securities.

The Company may issue additional Ordinary Shares or other equity securities of equal or senior rank (including additional warrants) in the future in connection with, among others, Triterras’ equity incentive plan, without shareholder approval, in a number of circumstances.

The Company’s issuance of additional Ordinary Shares or other equity securities of equal or senior rank would have the following effects:

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As a “foreign private issuer” under the rules and regulations of the SEC, the Company is permitted to, and may, file less or different information with the SEC than a company incorporated in the United States or otherwise not filing as a “foreign private issuer.”

A foreign company will qualify as a foreign private issuer if 50% or less of its outstanding voting securities are held of record by U.S. residents; or if more than 50% of its outstanding voting securities are held of record by U.S. residents and none of the following three circumstances applies: (i) the majority of its executive officers or directors are U.S. citizens or residents; (ii) more than 50% of the issuer’s assets are located in the United States or (iii) the issuer’s business is administered principally in the United States. The Company could lose its status as a “foreign private issuer” under current SEC rules and regulations if more than 50% of its outstanding voting securities are directly or indirectly held of record by U.S. residents and any one of the following is true:  (i) the majority of its Executive Management or directors are U.S. citizens or residents; (ii) more than 50% of its assets are located in the United States; or (iii) its business is administered principally in the United States.  

The Company is considered a “foreign private issuer” under the Exchange Act and is therefore exempt from certain rules under the Exchange Act, including the proxy rules, which impose certain disclosure and procedural requirements for proxy solicitations for U.S. and other issuers. Moreover, the Company is not required to file periodic reports and financial statements with the SEC as frequently or within the same time frames as U.S. domestic public companies with securities registered under the Exchange Act. The Company currently prepares its financial statements in accordance with IFRS. As a foreign private issuer, the Company will not be required to file financial statements prepared in accordance with or reconciled to U.S. GAAP so long as its financial statements are prepared in accordance with IFRS. Further, the Company is not required to comply with Regulation Fair Disclosure, which imposes restrictions on the selective disclosure of material information to shareholders. In addition, the Company’s officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions of Section 16 of the Exchange Act and the rules under the Exchange Act with respect to their purchases and sales of the Company’s securities.  Accordingly, if you continue to hold the Company’s securities, for so long as the Company is considered a foreign private issuer under the Exchange Act, you may receive less or different information about the Company than you would receive about a U.S. domestic public company.

Although the Company expects to attempt to relist the Ordinary Shares and the Triterras Warrants on Nasdaq as soon as practicable through the normal relisting application process.  If the Company’s securities are relisted on Nasdaq, the Company expects that it will again be considered a “foreign private issuer” under the Exchange Act.   A foreign private issuer whose securities are listed on Nasdaq is permitted to follow certain home country corporate governance practices in lieu of certain requirements of Nasdaq, but it must disclose in its annual reports filed with the SEC each requirement of Nasdaq with which it does not comply, followed by a description of its applicable home country practice. The Company cannot make any assurances that it will continue to follow Nasdaq corporate governance requirements after its securities are delisted from Nasdaq. Even if its securities can be relisted on Nasdaq in the future, the Company may elect to rely on available exemptions for a foreign private issuer that would allow the Company to follow its home country practice.

If the Company loses its status as a “foreign private issuer” in the future, it will no longer be exempt from the rules described above and, among others, will be required to file periodic reports and annual and quarterly financial statements as if it were a company incorporated in the United States. If this were to happen, the Company would likely incur

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substantial costs in fulfilling these additional regulatory requirements and members of the Company’s management would likely have to divert time and resources from other responsibilities to ensuring these additional regulatory requirements are fulfilled.

Triterras is an “emerging growth company” and, as a result of the reduced disclosure and governance requirements applicable to emerging growth companies, our securities may be less attractive to investors.

Triterras is an “emerging growth company,” as defined in the JOBS Act, and it intends to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. Triterras cannot predict if investors will find its securities less attractive because it will rely on these exemptions, including delaying adoption of new or revised accounting standards until such time as those standards apply to the Company. If some investors find our securities less attractive as a result, there may be a less active trading market and the price of the Company’s securities may be more volatile. Triterras may take advantage of these reporting exemptions until it is no longer an “emerging growth company.” Triterras will remain an “emerging growth company” until the earliest of (1) the last day of the financial year (a) following the fifth anniversary of the completion of the Netfin IPO, (b) in which it has total annual gross revenue of at least $1.07 billion, or (c) in which it is deemed to be a large accelerated filer (which would occur if the market value of our Ordinary Shares  held by non-affiliates were to exceed $700 million as of the last day of the second financial quarter of such financial year), and (2) the date on which the Company has issued more than $1.0 billion in non-convertible debt during any prior three-year period.

Mr. Srinivas Koneru is able to exert control over Triterras.  The interests pursued by Mr. Koneru could differ from the interests of Triterras’ other securityholders.

Mr. Srinivas Koneru, our founder, chairman and chief executive officer, beneficially owned approximately 67.1% of our Ordinary Shares, as of February 28, 2022. Due to his large shareholdings, Mr. Koneru is able to exert control in the general meeting of Triterras shareholders and, consequently, on matters decided by the general meeting, including, without limitation, the appointment of members of the board of directors, the payment of dividends and any proposed capital increase. The interests pursued by Mr. Koneru could differ from the interests of Triterras’ other securityholders. See “Major Shareholders and Related Person Transactions –Related Party Transaction”.

Securityholders have limited ability to bring an action against the Company or against its directors and officers, or to enforce a judgment against the Company or them, because the Company is incorporated in Cayman Islands, because the Company conducts a majority of its operations outside of the United States and because a majority of the Company’s directors and officers reside outside the United States.

The Company is incorporated in the Cayman Islands and conducts a majority of its operations through its subsidiary, Triterras Fintech Pte Ltd., outside the United States.  A majority of the Company’s officers and directors reside outside the United States.  As a result, it could be difficult or impossible for you to bring an action against the Company or against these individuals outside of the United States in the event that you believe that your rights have been infringed under the applicable securities laws or otherwise.  Even if you are successful in bringing an action of this kind, the laws outside of the United States could render you unable

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to enforce a judgment against the Company’s assets or the assets of the Company’s directors and officers. As a result of all of the above, our securityholders might have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as securityholders of a U.S. domestic public company.

Provisions in the Amended and Restated Memorandum and Articles of Association and Cayman Islands law may limit the availability of attractive takeover proposals.

The Company’s amended and restated memorandum and articles of association (the “Articles”) contain provisions that may discourage unsolicited takeover proposals that shareholders of the Company may consider to be in their best interests. In particular, the Articles contain a provision which requires that the board of directors be elected in three classes, each serving a term of three years, also known as a staggered board. Other provisions in the Articles and Cayman Islands law include the requirement for the affirmative vote of holders of at least two-thirds of the issued shares of the relevant class or with the approval of a resolution pass by a majority of at least two third of the votes cast at a separate meeting of the holders of shares of that class to amend provisions therein that affect certain shareholder rights.  These provisions could limit the price investors might be willing to pay for the Company’s securities.

If a U.S. person is treated as owning at least 10% of Triterras Stock, such person may be subject to adverse U.S. federal income tax consequences.

If a U.S. person is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of our Triterras Stock, such person may be treated as a “United States shareholder” with respect to each of the Company and its direct and indirect subsidiaries that is a “controlled foreign corporation.” If the Triterras group includes one or more U.S. subsidiaries, under recently-enacted rules, certain of the Company’s non-U.S. subsidiaries could be treated as controlled foreign corporations regardless of whether the Company is treated as a “controlled foreign corporation” (although there is currently a pending legislative proposal to significantly limit the application of these rules).

A United States shareholder of a controlled foreign corporation may be required to report annually and include in its U.S. taxable income its pro rata share of the controlled foreign corporation’s “Subpart F income” and (in computing its “global intangible low-taxed income”) “tested income” and a pro rata share of the amount of U.S. property (including certain stock in U.S. corporations and certain tangible assets located in the United States) held by the controlled foreign corporation regardless of whether such controlled foreign corporation makes any distributions.  Failure to comply with these reporting obligations (or related tax payment obligations) may subject such United States shareholder to significant monetary penalties and may prevent the statute of limitations with respect to such United States shareholder’s U.S. federal income tax return for the year for which reporting (or payment of tax) was due from starting. An individual that is a United States shareholder with respect to a controlled foreign corporation generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a United States shareholder that is a U.S. corporation.  The Company cannot provide any assurances that it will assist holders in determining whether any of its non-U.S. subsidiaries are treated as a controlled foreign corporation or whether any holder is treated as a United States shareholder with respect to any of such controlled foreign corporations or furnish to any holder information that may be necessary to comply with reporting and tax paying obligations.

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If the Company were a passive foreign investment company for U.S. federal income tax purposes for any taxable year, U.S. Holders of our Triterras Stock or Triterras Warrants could be subject to adverse U.S. federal income tax consequences.

If the Company is or becomes a “passive foreign investment company” (a “PFIC”) within the meaning of Section 1297 of the Code for any taxable year during which a U.S. Holder holds Triterras Stock (as such term is defined under “Additional Information—Taxation—Certain Material U.S. Federal Income Tax Considerations to U.S. Holders”) or Triterras Warrants, certain adverse U.S. federal income tax consequences may apply to such U.S. Holder. The Company does not expect the Company to be a PFIC for U.S. federal income tax purposes for the current taxable year or in the foreseeable future. However, PFIC status depends on the composition of a company’s income and assets and the fair market value of its assets from time to time, as well as on the application of complex statutory and regulatory rules that are subject to potentially varying or changing interpretations. Accordingly, there can be no assurance that the Company will not be treated as a PFIC for any taxable year.

If the Company were a PFIC, a U.S. Holder of our Triterras Stock or Triterras Warrants may be subject to adverse U.S. federal income tax consequences, such as taxation at the highest marginal ordinary income tax rates on capital gains and on certain actual or deemed distributions, interest charges on certain taxes treated as deferred, and additional reporting requirements. See “Additional Information—Taxation—Certain Material U.S. Federal Income Tax Considerations to U.S. Holders.”

ITEM 4. INFORMATION ON THE COMPANY

The Company is a Cayman Islands exempted company and was incorporated for the purpose of effectuating the Business Combination, which was consummated on November 10, 2020.  See the “Explanatory Note” above for further details of the Business Combination. The Company was incorporated under the laws of the Cayman Islands originally under the name of “Netfin Holdco” on February 19, 2020. The Business Combination was consummated on November 10, 2020 and on such date the Company changed its name from “Netfin Holdco” to “Triterras, Inc.”

Fintech was a private company limited by shares incorporated under Singapore law.  Fintech was incorporated in Singapore on January 11, 2018. See Item 5 for a discussion of Triterras’ principal capital expenditures and divestitures for the fiscal years ended February 28, 2021 and February 29, 2020.  

Mr. Koneru co-founded Rhodium, which began operations in 2012. By 2016, Rhodium had grown substantially and was trading a significant volume of commodities, which led to burdensome transaction reporting and tracking requirements. Given his technology background, Mr. Koneru along with his team started looking for vendors who could solve their problems, but did not find any solutions that fully catered to Rhodium’s needs. This was when Mr. Koneru realized the gap in the market and saw the need to address it. After analyzing many technologies, Mr. Koneru came to the conclusion that blockchain should be the underlying technology, as it would allow traders to track their transactions and all the steps would be traceable and immutable. Blockchain would also promote trust and transparency, which he believed was severely lacking in the commodity trading industry.

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In second half of 2017, the idea of developing a platform to address the dire need in trade and trade finance came to Mr. Koneru. In 2018, the planning and development for what would become Kratos began. Mr. Koneru assembled advisors and experts in blockchain from countries including the United Kingdom, United Arab Emirates and Indonesia. Rhodium provided the in-depth functional information and industry experience to truly pinpoint the problems and the presence of many commodity traders in Singapore provided further valuable input.

The pilot was completed in 2018 with a strong expression of interest from certain industry players, laying the foundation for what would become the “Trade Discovery” and “Risk Assessment” modules of Kratos. Triterras Fintech Pte. Ltd (f/k/a Arkratos Blockchain Solutions Pte. Ltd.), a Singapore private company limited by shares, was incorporated on January 11, 2018 as an outgrowth of the Rhodium business. In 2019, a full development team in Singapore was hired to work on the platform. After the 2018 pilot’s success in validating the concept, Mr. Koneru wanted to expand Kratos to tackle another issue — access to trade finance. It was always in his mind that Kratos should be an end-to-end solution covering the entirety of a trade’s lifecycle. The “Trade Discovery” module was the first step and base for all the other modules. Mr. Koneru created an advisory board with experts from trading, banking, insurance, logistics, shipping, and blockchain that could provide feedback on the development plans and Kratos, leading to the commercial launch of the “Trade Discovery” module in June 2019, followed by the “Trade Finance” module in February 2020 and the “Insurance” module in September 2020. On November 10, 2020, the Business Combination was consummated and Triterras, Inc. became the parent of Fintech. In January 2021, the Company launched the “Logistics” module and the first version of buyer driven SCF module went live by end of February 2021.

The mailing address of the Company’s principal executive office is 9 Raffles Place, #23-04 Republic Plaza, Singapore 048619.  Its telephone number is +65 6661 9240. The Company’s process agent in the United States is Richard M. Maurer, 445 Park Avenue, 9th Floor, New York, New York 10022. The Company’s principal website address is www.triterras.com. The information contained on, or accessible through, the Company’s websites is not incorporated by reference into this Annual Report, and you should not consider it a part of this Annual Report. Information filed with the SEC by the Company will be available on the Company’s website. The SEC also maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.  The SEC’s website is www.sec.gov.

We are a financial technology (“fintech”) company that developed, owns and operates an innovative trading and trade finance platforms. Our platform, which we call “Kratos™,” facilitates trading, trade finance, credit insurance and logistics solutions for small and medium sized enterprises (“SME”) using innovative blockchain-enabled technology. Kratos is a diversified platform built to address the needs of SMEs in the trading and trade finance community by connecting commodity traders and lenders and enabling them to transact online, solving critical problems for this historically underserved market. Kratos enables SMEs and other parties to trade and find short term trade financing for their purchases while in transit and prior to delivery. For traders, Kratos provides transformational benefits including lower transaction costs, faster cycle times, fraud mitigation, improved counterparty discovery, and higher quality analytics and reporting. Equally impactful to lenders, Kratos cuts administration costs, mitigates risk and the risk of fraud, and provides a marketplace of borrowers who have

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been subject to bank-grade anti-money laundering and “know-your-customer” checks. According to the Asian Development Bank the global trade finance gap, for SMEs, is estimated to be $1.7 trillion per annum in the fiscal year ended February 29, 2020, and we believe our platform directly solves some of the key underlying issues contributing to this shortage of trade finance availability for SMEs. We monetize the Kratos platform by charging fees to its users on their Transaction Volume and Trade Finance Volume and is the key driver of our revenue.

Since January 11, 2018 (date of the Company’s incorporation) to the present date, we have developed Kratos, which we believe is one of the world’s first large-scale (as measured by Total Transaction Volume) blockchain-enabled trade and trade finance platforms, providing us a first mover advantage to address the complexities and challenges in trade finance for SMEs. For the fiscal years ended February 28, 2021 and February 29, 2020, Kratos facilitated Total Transaction Volume of $10.0 billion and $3.8 billion, respectively, at a ratio of Trade Finance Volume to Transaction Volume (“Financing Ratio”) of 34.1% and 5.1%, respectively, generated revenue of $55.5 million and $16.9 million, respectively, net income of $53.4 million and $13.6 million, respectively, and EBITDA* of $35.2 million and $15.2 million, respectively.  

From June 2019 to February 28, 2021 (inclusive), we have rapidly expanded our user base with over 60 parties executing more than 5,000 transactions comprising more than $13.8 billion in Total Transaction Volume at a Financing Ratio of 24.67. Average Transaction Volume per user for the fiscal year ended February 28, 2021 was $2.7 million.

The commodity trading and trade finance industry has been traditionally slow to adapt to technological innovation, but we believe Kratos is disrupting and transforming the industry. We generally target and serve the SME market because we believe it has been historically underserved by more traditional providers of trade execution and trade finance and offers greater opportunities for companies of our size. We intend Kratos to be a “one-stop-shop” platform for end-to-end services for commodity trading, including trade execution, trade finance, credit insurance and logistics. On September 23, 2020, the Company announced the introduction of Kratos’ “Insurance” module. Further, we launched our Kratos “Logistics” module which facilitates logistics management for trades on our platform completing the end-to-end coverage of a trade’s lifecycle and “Supply Chain Finance” module in January 2021 and February 2021 respectively.

We do not control the types of products that are traded on Kratos, which are determined by the needs of our users. The trade transactions are transacted on a bilateral basis between the counterparties and we do not have custody of the customers’ funds. We focus on engaging our users to transact more Transaction Volume on the platform. It is possible for traders to use Kratos for transactions involving oil seeds (palm oil, soya bean oil), grains (wheat and rice), non-ferrous metals, steel, coal and sugar. We expect that the mix of products traded on the platform will be seasonal, reflecting the underlying trends of certain products.

We are headquartered in Singapore, with a presence in the United States, the United Kingdom and, as of the date of this filing, Dubai. As of February 28, 2021 our team totaled 40 individuals (consisting of 28 employees and 12 contractors).

The Trading and Trade Finance Ecosystem Supported by Kratos

The long-term goal of Kratos is to bring together the entire trading ecosystem — buyers, sellers, traders, financiers, insurers and logistics providers — to facilitate trade finance and

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trading efficiently in a consistent, efficient, transparent and trusted environment. Kratos is designed to capture users’ entire trading and trade finance relationship to be completely hassle-free in just a few clicks at our “one-stop-shop.” The Trade and Trade Finance module covers the entire lifecycle of a trade and its related financing, allowing users and counterparts to buy or sell and/or finance the trades. The Trade and Trade Finance module has two sub-modules. Service provided in each sub-module is identified as a separate performance obligation as they are separately identifiable, distinct and not interdependent. The fee charged for each performance obligation is separately determined as a percentage of the trade or financing amount.

“Trade Discovery” sub-module

The “Trade Discovery” sub-module of the Trade and Trade Finance module covers the entire lifecycle of a trade, allowing users to deal with counterparties and transactions on the platform, create buy or sell orders, enter into sales agreements, generate invoices and request funds from lenders in the “Trade Finance” sub-module of the Trade and Trade Finance module, all while maintaining visibility for users over the underlying documentation, current status and next steps for each of their transactions and tying into the “Risk Assessment” module to facilitate KYC and bill of lading checks. The ability of parties to find new funders on Kratos disrupts the traditional relationship-based trading market. The “Trade Discovery” sub-module supports various internationally standardized terms of trade.

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The chart below sets forth our Transaction Volume by product for the fiscal year ended February 28, 2021:

As Kratos’ user base grows and geographical diversity increases, we expect that our users will begin trading additional products.

“Trade Finance” sub-module

Our platform brings buyers and sellers together to facilitate trades and provides the option for the parties to finance the purchase or sale of the products being traded using credit terms, generally through the purchase of receivables or supplier funding using the receivables as collateral. The “Trade Finance” sub-module of the Trade and Trade Finance module is used by the lenders or financial institutions to receive funding requests, to assess the funding opportunity and to provide funding to borrowers. It also supports lenders in setting funding limits and viewing the transaction history of each commodity user.

When our financing users provide trade finance to buyers or sellers, it takes the form of the deferral of payment by the purchaser. The financing provider makes an upfront payment to the supplier for the purchase of the goods from his own supplier. The buyer can enter into a purchase agreement with the financing provider for which a receivable is generated for the purchase price as well as for the cost of the financing and any other agreed costs, and such receivable is sold or assigned to the financing provider. The supplier can alternatively enter into a loan with the financing provider for which a receivable is generated for the purchase price as well as for the cost of the financing and other agreed costs, and such receivable is used as collateral to said loan. We do not charge a platform fee to the financing provider, who sets their own interest rate and other fees before agreeing to finance the transaction. We believe that we offer an attractive universe of lending opportunities, which often allows our lenders to lend

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at higher yields than larger transaction sizes, where banks or other large providers compete to provide funding. We also offer our lenders free customization options to facilitate their specific administrative needs, such as breakdowns of their exposure by product, region and borrower and a dashboard of overdue accounts, as well as access to a borrower’s third-party provided credit scores from the “Risk Assessment” module. The commercial launch of the “Trade Finance” sub-module occurred in February 2020. For the fiscal year ended February 28, 2021 we had onboarded lender users representing cumulative funds of $17 billion, primarily located in Singapore, Malaysia and the Cayman Islands, see “— Competition — Geographic Footprint & Employees”.

“Insurance” module

The “Insurance” module facilitates buyers’ procurement of insurance coverage from an insurer or underwriter; coverage amounts usually range between 85%-90% of the value of the receivable to protect the financing provider against default by the buyer. The seller typically retains the remaining 10%-15% commitment which is not covered by credit insurance. We also intend to introduce the facilitation of payments for our trading and financing users, using third-party payment providers. We do not provide trade finance, and only facilitate the transaction between the buyer and the lender.

“Risk Assessment” module

It is important to our business that Kratos remain a trusted environment for parties to trade and both source and offer financing, as well as credit insurance and logistics services. All users have access to the “Risk Assessment” module, and we require each participant in any of our modules to pass KYC, sanctions and anti-money laundering (“AML”) due diligence checks before commencing a relationship with a counterparty. We use a third party provider’s “Artemis” screening system via our platform’s “Risk Assessment” module to carry out this due diligence. We regularly monitor and review the appropriateness of ongoing relationships and we do not accept an entity that is subject to any trade/economic or regulatory sanctions as a user.

Our platform’s “Risk Assessment” module also supports lenders in accessing third party credit reports on other users, beyond which counterparties are required to satisfy the internal requirements of our insurers and our finance providers prior to entering a financing transaction. Finally, our platform’s “Risk Assessment” module allows commodity users, including producers, traders, stockists and end-users, as well as lenders to perform independent bill of lading checks on vessels transporting the stated goods for direct shipment orders they have placed on our “Trade Discovery” sub-module. These bill of lading checks provide an easy link to a third party’s reporting of the particulars of the vessel that is transporting their products, its past route and current position.

“Logistics” module

Because we also facilitate the trading of bulk physical commodities, logistics are an important aspect of the ecosystem and freight makes up an important cost component of many of the trades on Kratos. The “Logistics” module assists users in finding the fastest, most economical and most efficient transportation solution for the underlying cargo and agreed terms of trade, which can have a significant impact on the profitability of such trades for our users. The “Logistics” module is powered by a third-party provider and available to commodity users, ship owners and ship operators for all of their functional needs in chartering, post-fixture

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and voyage, as well as supporting voyage charter, time charter (“TC”) and contracts of affreightment (“COA”), and financial terms for commodities including dry cargo, tankers and gas.

The “Trade Discovery” sub-module supports various internationally standardized terms of trade to meet the varied needs of its users, is available in our “Logistics” module:

“Supply Chain Finance” Module

Our “Supply Chain Finance” module vertically integrates our operations into supply chain finance, otherwise known as “reverse factoring,” In contrast to our “Trade Finance” module, which focuses on transactions between SME producers, traders, stockists and end-users of commodities, the “Supply Chain Finance” module expands Kratos beyond commodities by focusing on the need of the many SME suppliers to quickly monetize their sales of raw materials and components to large, credit worthy “anchor” buyers. We believe the anchor buyers will drive adoption of Kratos by their small suppliers. The supply chain finance involves a lender providing immediate payment at the request of small suppliers who have otherwise offered deferred payment terms to the anchor buyer.

The Kratos Solution

We believe that the Kratos brings together the entire trading and trade finance ecosystem of buyers, sellers, traders, financiers, insurers and logistics providers to facilitate trading and trade finance. Kratos was developed by industry operators and participants who collectively have an aggregate of over 150 years of experience in the industry, and focuses on providing solutions for what they view as the industry’s greatest problems as set forth below:

1)      Shortfall in funding for SMEs and an inability for interested funders to source and perform proper KYC checks on SME opportunities. SMEs have historically struggled to obtain financing from more traditional lenders as evidenced by the estimated $1.7 trillion annual shortfall in trade finance funding. The exit by traditional banks from the SME trade finance space has provided an opportunity for less traditional providers of trade finance — such as funds and individual investors — to enter the trade finance sector. These less traditional investors have faced both high administrative and compliance costs, and previously have not had an efficient way to source financing opportunities or validate and perform proper KYC checks on counterparties. Kratos offers a solution to both of these problems.

For lenders, historically trade finance loans have been, slow, paper intensive and complex multi-step processes, susceptible to document errors and fraud, and have required a high amount of fixed overhead expenses, regardless of the size of the loan. Smaller-sized loans (below $10 million) were not as profitable because of these high fixed expenses. By utilizing technology to digitize documents, mitigate documentation error and fraud, as well as increase transaction speed, Kratos lowers the administration costs for lenders, and makes lending in this segment more profitable. For traders as borrowers, it allows greater access to trade finance, which is often referenced as a key barrier for traders. Also, for traders, our platform offers significantly lower financing sourcing costs than traditional options. Our financing source fees are notably lower than current offline market rates for capital sourcing, which we believe is generally closer to 2.0% to 2.25%.

Additionally, the platform provides lenders with a community of prequalified trade finance borrowers, with their KYC, AML and financial information available to the platform,

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giving potential trade finance providers the confidence to transact in this ecosystem. Our business focuses on transactions with the total value of traded goods below $10 million as we believe large transactions in excess of $50 million attract banks to offer trade finance. Our average transaction size for the fiscal year ended February 28, 2021 was $2,707,208.

2)      Traditional trade and trade finance processes that rely on paper trails are costly, lengthy, inefficient, paper intensive and subject to fraud.  The blockchain technology utilized by Kratos digitizes and streamlines the entire lifecycle of the transaction process, including documentation. We believe that transactions executed on Kratos are significantly faster and more efficient and secure, as all data and activity is time stamped and chronologically stored in blocks, minimizing the risk of data modification or tampering. The underlying process and architecture also provide users with more robust and secure reporting. For traders, collectively, this helps resolve counterparty trust issues, another significant problem in the industry, and boosts financial performance by reducing trade cycle times, thus driving higher revenue.

Our business is a 100% fee-based platform business. Kratos modules provide distinct revenue streams, as set forth below:

Revenue Streams

Trade Discovery and Trade Finance

1.1) Trade Discovery:    When buyers and sellers agree to execute a physical commodity trade on Kratos, we charge a percentage of the transaction value to the party who initiates the transaction with the option to split the fee between the two parties, which we believe is well-priced for the fraud protection, transparency, speed, analytics and efficiency that the “Risk Assessment” module of our platform delivers. We intend to facilitate payments using third party cross-border payment providers. We also intend to facilitate the trades between buyers and sellers by aggregating demand and supply into a market-place model.

1.2) Trade Finance:    Producers and suppliers expect immediate payment, while buyers often seek a trade finance option to bridge the time period between entering the transaction and receiving or reselling products. Based on our experience, buyers seek to utilize a trade finance option in approximately 80% of their trades, generating a receivable to the finance provider that is due in up to 150 days. We currently charge commodity buyers on Kratos that source trade finance on the platform an additional financing sourcing fee of a percentage of the amount financed. We do not charge a platform fee to financing providers and the providers set their own interest rate and other fees before agreeing to finance the transaction. We believe that we offer finance providers an attractive universe of lending opportunities, which often allows our lenders to lend at higher yields than larger transaction sizes, where banks or other large providers compete to provide funding. We also offer our lenders free customization options to facilitate their specific administrative needs, such as breakdowns of their exposure by commodity, region and borrower and a dashboard of overdue accounts.

2) Insurance:    Our “Insurance” module allows users to access trade credit insurance from insurers or underwriters. Users are able to source credit insurance that normally covers between 85%-90% of the trade finance receivable to protect trade finance lenders against defaults. We do not currently plan to charge an additional fee for users that access credit insurance via Kratos, but believe that the availability of credit insurance via Kratos will result in increased Trade Finance Volume and user growth.

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3) Logistics:    Our “Logistics” module allows users to arrange the functional aspects of chartering, post-fixture voyage management and voyage financials with traders on our platform. We do not currently plan to charge an additional fee for users that source logistics services on Kratos, but believe that the availability of logistics on Kratos will result in increased Transaction Volume and user growth.

4) Supply Chain Finance: Our “Supply Chain Finance” module expands Kratos beyond commodities and focuses on the SME suppliers to large “anchor” buyers. The lender will provide immediate payment at the request of small suppliers who have otherwise offered deferred payment terms to the anchor buyer. We intend to charge suppliers that opt for supply chain finance a sourcing fee which will be a percentage of the amount financed.

Our Strengths

Focused Founder and Compelling Management Experience in the Trade and Trade Finance Sector, Leading to the Design and Build-out of Kratos

We benefit from a strong entrepreneurial leadership team that links what we see as two complementary skill sets: technology development and deployment expertise, combined with trade finance and physical commodities trading experience. We believe that this combination provides us with a competitive advantage as trade finance and physical commodities trading businesses are often slow to adapt to technology, while technology firms or consortiums often lack the in-depth experience and relationships that are critical in the trade finance and physical commodities trading business.

Our founder, Mr. Srinivas Koneru, has over 35 years of entrepreneurial experience, of which over 20 years have been in the technology sector, including co-founding a business software and solutions company before selling this business in 2010. Since 2012, Mr. Koneru’s experience has been working as the founder and owner of Rhodium. Our business leverages his unique experiences in both technology and the commodity trading and trade finance industry to inform and guide the design and deployment of Kratos. Mr. Koneru has built a management leadership team made up of the Chief Financial Officer, the then-Chief Operating Officer, Chief Commercial Officer, Chief Technology Officer and Executive Vice President, Investor Relations, who we believe all have complementary skill sets in technology development and experience in the trade industry. See Item 6A for additional details regarding our Executive Management.

From the Company’s founding until the Business Combination, Mr. Koneru had been the sole source of equity capital for the business, which enabled the Company’s leadership to focus on growing the business and implementing their vision. We believe that our leadership’s focused, entrepreneurial mind set combined with our comprehensive institutional operational process and decades of trade finance experience provides us with a compelling competitive advantage.

Platform Scale from Current Customer Base

Transactional platforms such as Kratos require large scale trading volume and users to be successful. One of the most difficult aspects of starting a platform is attracting initial participants as the platform seeks to build the critical mass necessary for success. The launch of Kratos’ ecosystem was enabled by our relationship with Rhodium, whose existing physical commodity trading business initially provided immediate scale to the platform, in terms of both

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Transaction Volume and users.  Rhodium had nearly 400 customers as of February 2020, and $2.3 billion in overall commodities traded for the fiscal year ended February 29, 2020, but on December 17, 2020 sought a moratorium order from a Singapore court which will shield it from creditor actions while it prepares a scheme of arrangement pursuant to the Singapore Insolvency, Restructuring and Dissolution Act to restructure its debts and continue its business as a going concern. For further details on our ongoing relationship with Rhodium and Rhodium’s current business, see “— Our Relationship with Rhodium”.

We have expanded our user base with over 60 parties executing more than 5,000 transactions comprising approximately $13.8 billion in Total Transaction Volume at a ratio of Trade Finance Volume to Transaction Volume (“Financing Ratio”) of 24.67% as of February 28, 2021. Average Transaction Volume per user for the fiscal year ended February 28, 2021 was approximately $2.7 million.

We anticipate adding additional lenders to provide financing on Kratos, and adding credit insurance and logistics providers, which we believe will attract additional participants and further help us build the necessary scale independent from Rhodium.

Innovative Platform with First Mover Advantage, Streamlining Services for SMEs

We believe that Kratos will enhance international trading and trade financing across the entire life cycle of a commodity trade by acting as a single repository of information, allowing for a secured version of all trade documentation to be shared and visible in real-time to all stakeholders in the trade. We also believe we are the only digital platform in the market to use blockchain, support live transactions, offer emerging markets SME commodity trade finance and to have exceeded $6 billion in Total Transaction Volume.

The goal of Kratos is to bring together the entire trading ecosystem — buyers, sellers, traders, financiers, insurers and logistics providers — to facilitate trade finance and trading efficiently in a consistent, transparent and trusted environment. Kratos enables SME trade finance transactions with its innovative, blockchain-enabled platform to increase speed and efficiency, promote sustainability, foster compliance and provide security throughout the financing and trading process.

Using our deep industry experience, we custom-built Kratos to meet the needs of both traders and financing sources. By innovating from within the industry and providing a system built and designed by experienced industry practitioners, we believe the platform will provide immediate value for all users beyond what we believe any pure technology company could offer. Kratos enables users seeking financing to access tailored financing options quickly through a transparent blockchain-linked system that facilitates their growth and we believe makes us a partner of choice. It also gives lenders access to a market that they want to lend in, but often cannot otherwise reach, in a practical and cost-efficient manner.

Our Strategy

Our strategy is to be a leading global fintech platform for trade, trade finance and supply chain finance by innovating and developing new solutions with the goal of meeting the needs of our platform’s users. In addition to the organic growth we have achieved, we intend to further our strategic objectives as follows:

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Expand the Alternative Lenders on the Kratos platform

We will strive to attract credit specialist lenders (e.g., generalist credit funds, multi-strategy asset funds and regional banks) interested in asset-back backed lending, but who do not traditionally invest in or participate in trade finance. We believe trade finance lending offers a compelling business opportunity in terms of positive yields, low-risk, self-liquidating and short tenor assets. The Company’s deep experience in trade finance, our innovative technology and robust processes could be complementary to these types of lenders who are interested in trade finance lending asset class. Our business development team is well positioned to help credit specialist lenders’ entry in this market through various business arrangements such as joint ventures or strategic investments.

Expand New Trader Sectors

Historically the Company’s customer focus has been on traders of commodity products. We are contemplating expanding our customer base to include new trader communities involved in expanded vertical product markets with similar risk profiles, including non-commodity emerging markets cross-border transactions. The target markets under consideration would include traders of semi-finished and finished goods representing such segments as: automotive, electronics, alternative energy, general manufacturing, oil/gas and technology metals.  We believe this could capture margin along the value chain, attract new lenders to the platform that have a specific industry focus in their lending practice which could be synergistic to our business development focus.  

Supply Chain Finance (“SCF”)

The Company has been interested in offering SCF solution as an alternative form of financing on the Kratos platform. We believe this is one pathway to scale utilization of the platform, enter into new markets and diversify our innovative offerings. While we launched the SCF module at the end of February 2021, our subsequent May 17, 2021 acquisition of Invoice Bazaar, a leading supply chain finance platform based in United Arab Emirates, resulted in the Company enhancing its SCF capabilities. We are working to integrate the Invoice Bazaar SCF technology platforms and operations as well as support the expansion of the SCF business across emerging markets.

Corporate Developments

We have a very strong focus on corporate development activities that will allow the company to enter into new markets, new strategic partnerships and joint ventures, mergers and acquisitions, and other strategic investments. We evaluate these opportunities in terms of their potential impact on earnings growth, increased geographic presence, new technology acquisition, enhancements to the Kratos platform, and new client acquisition (lenders or traders).  

Recent strategic investments, include (i) our subscription of shares in Trade Credit Partners Ltd., a Cayman Islands exempted fund that exclusively invests in and manages trade finance assets generated from commodities trades, in August 2021 and September 2021, respectively for a total of $25 million (which will be reduced to comply with the Investment Company Act)  and (ii) our acquisition of IB Holdings Limited, a leading supply chain finance platform in United Arab Emirates in May 2021.

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Use Kratos to increase Total Transaction Volume with our existing counterparties and develop new financing relationships

We believe that the scale and ease of use of Kratos positions us well to increase our Total Transaction Volume with existing users, as we believe that the use of Kratos constitutes a relatively small portion of the overall business of our users, providing us with an opportunity to capture additional business flow from existing relationships. We plan to actively engage with our user base to increase this business flow.

Some of our users currently use only the “Trade Discovery” sub-module of Kratos and do not seek financing via the “Trade Finance” sub-module, which provides us an opportunity to expand our relationships with existing users through offering financing options. This would, in turn, provide us with opportunities to capture more value from each trade and potentially increase Total Transaction Volume from these users. The “Insurance” module and the “Logistics” module of Kratos provide further opportunities to expand our relationships with existing users.

Continue to enhance value proposition of Kratos to new and existing users, through growth in scale as well as additional functionality and features

Like other distributed ledger platforms, Kratos will become more appealing as its scale grows, and we intend to accelerate this growth by (i) offering incentives to current users to onboard new traders from their ecosystems to our platform, which we have initiated in March 2020, (ii) launching the “Logistics” and “Supply Chain Finance” Modules in January 2021 and February 2021; (iii) increasing our appeal to general credit lenders who might not have looked at Trade Finance; and (iv) provide a marketplace for the traders on the ecosystem where Kratos would act as intermediaries to assist their trade flows. We believe all these steps will attract additional transactions and trading participants to Kratos.

Focus on underserved and fragmented SME market

The $40 trillion trade finance market is dominated by multinational companies and large banks that trade and finance the highest volume of trade transactions, largely outside of the view of public markets. Large participants in this industry include Cargill, Trafigura and Glencore, among others, who we believe trade primarily between themselves and with their large-scale suppliers. The increased regulatory capital requirements imposed on banks by Basel III have made it less profitable and attractive for banks to serve the trade finance market, leading to a focus on large transaction sizes (typically larger than $50 million) to cover increasing fixed compliance costs. This pull back from large players and lack of well capitalized smaller participants has led to an estimated $1.7 trillion gap in trade finance for SMEs, according to the Asian Development Bank as of October 2020 (“ADB”).

Our business focuses on SME transactions with the total value of traded goods below $10 million, that may otherwise struggle to obtain trade partners and financing from more traditional lenders in the trade finance industry. Our average transaction size for the fiscal year ended February 28, 2021 has been approximately $2.7 million. While banks have exited SME trade finance, alternative investment platforms such as funds, corporate treasuries and individual investors are seeking ways to enter our sector but are facing barriers to entry such as sourcing financing opportunities, the inability to validate and perform proper KYC checks on counterparties and incurring prohibitively high administrative and compliance costs. We are capable of solving these problems for potential trade finance providers, as Kratos provides

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lenders with a community of prequalified trade finance borrowers, with their KYC, AML and financial information uploaded to the platform, giving potential trade finance providers the confidence to transact in this ecosystem. Furthermore, Kratos helps to streamline the overall documentation and transaction process, which we believe can be a challenging and costly part of doing business as an SME, with its efficient end-to-end digital environment.

Selectively pursue inorganic growth through acquisitions and partnerships

We believe that there are a number of businesses and partnerships that would be complementary to our existing business and would provide attractive opportunities for inorganic growth. These include accretive acquisitions or joint ventures of existing offline businesses in the trading ecosystem, whose customer base could increase the growth of Kratos, as well as acquisitions of certain technology offerings, such as artificial intelligence, analytics & dashboard reporting, credit scoring & rating solutions and payment processing solutions which would allow for additional features to be added to Kratos.

Expand the use of Kratos with new features and into new geographies

We have introduced the facilitation of cross-border payments services for our trading and financing users through our strategic partnership with Western Union Business Solutions. In the medium term, we plan to introduce a mobile application that will allow our users to view their transaction status, receive notifications remotely, review and approve individual transaction steps, and manage the overall transaction process.

Kratos enjoys a diverse user base but is currently focused on emerging markets. This provides us with an opportunity to expand into additional geographies without requiring significant adjustments to the overall platform or its offering due to the nature of the technology used and the lack of a physical presence requirement. This enables us to continue to expand our user base and scale of Kratos, while continuing to de-risk the business through additional geographical diversity. As Kratos’ user base grows and geographical diversity increases, we expect that our users will begin trading additional non-petroleum commodities.

Disruptive pricing model to capture greater market share

Offline trade and trade finance processes have been traditionally costly, lengthy, inefficient, paper intensive and subject to fraud. In contrast, Kratos provides faster and more efficient digital execution, mitigates the potential for documentation fraud or data tampering by using blockchain-enabled technology and provides easy coordination of numerous transaction participants, while reducing paper-based documentation costs and waste in a sustainable way. We can capture this advantage through our pricing structure, where we believe our current charges to the party using Kratos to initiate the trade are well-priced for the fraud protection, transparency, speed, analytics and efficiency that the “Risk Assessment” module of our platform delivers. In addition, we believe our finance sourcing fees are notably lower than current offline market rates for capital sourcing, which we believe are generally closer to 2.0% to 2.25%. We believe that both pricing advantages will drive users and Transaction Volume and Trade Finance Volume to our platform.

Kratos and COVID-19

The usage of Kratos by our users has proven to be resilient in the face of the challenges posed to the industry by the COVID-19 pandemic.  COVID-19 pandemic initially drove

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increased Total Transaction Volume from our existing users, resulting in a 64.6% increase in average Total Transaction Volume for the fiscal year ended February 28, 2021, and a 59.6% increase in platform user growth, each as compared to the fiscal year ended February 29, 2020. In addition to the ease of use of the platform during worldwide closures, we believe that less trade finance liquidity due to a risk-off environment and fewer available funding sources are exacerbating the estimated $1.7 trillion annual shortfall in trade finance funding for SMEs, making our offering and solutions even more compelling. COVID-19 has also resulted in delays in collections of receivables given the liquidity issues faced by our customers.

The COVID-19 pandemic has impacted the business of some of our original customers more than others, which has resulted in a changing composition of our customer base, and we believe that this will continue into the near future as original customers are being replaced by the entrance of new customers. We anticipate that this changing composition of our customer base may impact our existing business and we expect our newer customers become more and more reliant on the benefits of participation on our platform.

Kratos — Our Blockchain-enabled Platform

Kratos is an organized, efficient and trusted digital platform for end-to-end trade finance and physical trading. We believe Kratos enables us to more efficiently facilitate trading and trade financing solutions while making our users’ day-to-day operations faster, more efficient and more transparent.

The trading and trade finance ecosystem has multiple stakeholders: Kratos is designed to capture approved buyers, sellers, traders, financiers, insurers and logistics providers and events at every stage of the trade transaction, allowing our users’ entire trading and trade finance relationship to be completely hassle-free in just a few clicks at our “one-stop-shop.” The launch of Kratos’ ecosystem was enabled by our relationship with Rhodium, whose existing business initially provided immediate scale to the platform, in terms of both Transaction Volume and users. An important feature of Kratos is that we maintain oversight of the ecosystem, including “know your customer” (“KYC”) and anti-money laundering (“AML”) checks for all participants, assisting users with these cumbersome tasks.

Kratos enables ecosystem participants to more efficiently find deals and counterparties, while improving reporting by operating in a consistent, transparent and trusted environment. Kratos links to the blockchain six times for a trade transaction and an additional six times for a trade finance transaction, as shown in the below diagram.

Kratos’ platform architecture consists of different modules, each of which serves a particular trade finance and trading need. “Trade Discovery,” “Risk Assessment” (which is

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accessible to all users without charge, and supports the other modules by facilitating KYC, Sanctions and AML checks, as well as credit score reporting and bill of lading checks for our users), “Trade Finance” and “Insurance,” are operational, the “Logistics” and “Supply Chain Finance,” went live at the end of January 2021 and February 2021, respectively. Our Supply Chain Finance Module was further enhanced by our acquisition of Invoice Bazaar and further details are set out above. Additionally, the Transaction Volume that our current customer base and financing providers support attracts other traders to Kratos, which in turn draws in additional sources of financing, such as insurers and logistics providers.

We believe that Kratos has several advantages compared to traditional offline trade transactions, which are paper intensive, burdened by significant overhead costs and delays and subject to human error due to manual documentation handling and fraud resulting from document modification. Through its blockchain-enabled technology, Kratos provides faster and more efficient digital execution, mitigates the potential documentation fraud or data tampering and provides easy coordination of numerous transaction participants, all while reducing paper-based documentation costs and waste in a sustainable way. We believe Kratos is transforming trade finance and physical trading without borders, across multiple countries and with ease of integration with third party software providers through APIs (Application Programming Interfaces).

Kratos’ blockchain platform now uses Amazon Managed Blockchain (AMB) service. We chose a blockchain service from a reputed provider such as Amazon because of the scale, security, and simplicity it offers to Kratos. AMB allows us to customize our offering to build decentralized applications that gain the benefits of blockchain technology.

Our Relationship With Rhodium

Rhodium, who enabled the launch of the Kratos ecosystem with its initial business support, is a commodity trading business headquartered in Singapore with offices in Hong Kong, China, Dubai, Malaysia, Australia and the United Kingdom. Rhodium had nearly 400 customers as of February 2020 and traded approximately $2.3 billion in commodities during the fiscal year ended February 29, 2020. In the fiscal year ended February 29, 2020, Rhodium’s traditional commodity trading business was adversely impacted by the COVID-19 pandemic and the lack of availability of trade finance funding for commodity trades involving SMEs. On December 17, 2020, Rhodium sought a moratorium order from a Singapore court shielding it from creditor actions while it prepared a scheme of arrangement pursuant to the Singapore Insolvency, Restructuring and Dissolution Act to restructure its debts and continue its business as a going concern.

Rhodium accounted for 26.5% of our revenue for the fiscal year ended February 29, 2020, primarily relating to platform fees where Rhodium initiated the commodity trade with its counterparty. For the fiscal year ended February 28, 2021, Rhodium accounted for 9.3% of our revenue. There have been no transactions contributed by Rhodium since the last quarter of the fiscal year ended February 28, 2021.

All transactions between us and Rhodium during the fiscal year ended February 28, 2021 were on an arm’s length basis, as with all other users on the platform. Mr. Koneru, our founder, Executive Chairman, Chief Executive Officer and majority shareholder following the Business Combination is also the majority shareholder of Rhodium. For a description of our other transactions with Rhodium, see “Major Shareholders and Related Party Transactions—Related Party Transactions— Other Related Person Transactions” for more details.

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Competition

There are numerous companies in the broad trade, trade finance and supply chain finance industries that are introducing technology solutions to improve the efficiency of trade and the delivery of trade finance. This is strong validation for the compelling industry opportunities offered by digitization. However, most fintech companies in the space are focused on serving large corporates and banks, the traditional incumbents, and introducing incremental efficiencies to existing corporate and bank processes. This is not disruptive to the industry Triterras is focused on.

Triterras is scaling a platform built on blockchain technology that achieves two important objectives:

Within the broad trade and trade finance industry, the Company has what we believe to be a unique focus in terms of our combined blockchain-enabled product/service deliverables and our targeted customer market. Based on a thorough competitive analysis of 32 direct and indirect competitors, we found that only 8 of our competitors are focused on SMEs, exhibiting that the vast majority of industry players are focused on serving large corporates, leaving significant whitespace in the SME sector. Within this group of 8 competitors, 2 have blockchain product offerings; however, they lack the geographical scale and trading volume that Triterras has.

Within the larger group of identified competitors, we also found that only 8 of our competitors had blockchain technology as part of their product offering. However, within this peer group, we have identified that our competitors have largely different missions as compared to Triterras:

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As such, we do not believe that there are currently any financial technology (“fintech”) companies of scale that are direct competitors in the market and customer segments we are serving and targeting, i.e., competitors focused on serving emerging markets SMEs and creating new liquidity in the industry through alternative lenders. We see our most immediate competitive activity (and, correspondingly, our most immediate opportunity) is represented by the legacy paper-based procedures and informal broker-based communications that continue to represent the vast majority of today’s trade and trade finance transactions involving SME traders and lenders. In order to represent the size and scale of the opportunity, as per McKinsey & Co., SMEs account for 95% of global firms and a vast majority of the inefficient documentary trade finance business, which makes up ~85% of the USD 5.2 trillion global trade finance market. Additionally, SMEs experience the greatest pain points in trade finance and account for a bulk of the USD 1.7 trillion trade finance gap given that 65 million were considered credit constrained as of 2017 and they have the highest financing rejection rate at 40% (Reconceiving the Global Trade Finance Ecosystem, November 2021).

The Company does recognize that other fintech companies could revise their business deployment strategies in the future and, thereby, develop into more direct competitors.

Because the trade and trade finance industries are global, they experience a steady stream of new market entrants. Some of our potential competitors have greater financial, technical, sales, marketing and other resources than we do, as well as in some cases, lower costs. Our potential competitors may also benefit from innovative business models, expansion and diversification of their product/service offerings, transaction origination and or trading operations, or engage in pricing or other financial or operational practices that could increase competitive pressure on us.

Marketing

The Company is endeavoured towards the continuous building of its brand awareness, educating and engaging potential clients on our trade financing solutions and the digitalisation of trade processes via our blockchain-enabled Kratos platform, as well as encouraging our clients to come onboard for us to help address their trade and trade finance needs.

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We do these through a strategic myriad of carefully-planned digital and social media marketing, trade partnerships and collaborations through database content marketing, establishing rapport with media owners to boost public relations, as well as selective events outreach with thought-leadership exchanges, along with the creation and dissemination of meaningful relevant communications materials like blogs, whitepapers, newsletters and others.

Geographic Footprint & Employees

The tables below present geographic information related to the location of users of the Kratos platform, which is equivalent to the location associated with revenue generation for fiscal years ended February 28, 2021 and February 29, 2020.

The table below is for the fiscal year ended February 28, 2021:

*The revenue information of continuing operations above is based on the location of the customers’ country of incorporation.

The table below is for the fiscal year ended February 29, 2020:

*The revenue information of continuing operations above is based on the location of the customers’ country of incorporation.

We are headquartered in Singapore, a large trading hub that we believe gives us access to all necessary supporting counterparts, such as the trading arms of producers, banks and insurers. As of the date of this Annual Report and since our inception, our head office and registered office, which is leased, is located at 9 Raffles Place, #23-04 Republic Plaza, Singapore 048619, and our telephone number is +65- 6661- 9240.

We believe that we maintain constructive relationships with our employees. As of February 28, 2021, we had 28 employees, none of which were represented by unions. In addition, we have 12 contractors in India supporting the design, development and solutioning of Kratos, bringing our total number of employees and contractors to 40.

The SEC maintains an Internet site at www.sec.gov that contains our public filings with the SEC. Our website, which is not incorporated into this Annual Report, is located at www.triterras.com.

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External Factors

There were several key developments that impacted trade and trade financing industry and in turn, our business planning for the fiscal year ending February 28, 2021.  Many of these developments were overall industry related “headwinds” that brought with them new challenges and impediments to the industry and to our growth plans:

These developments materially adversely impacted the industry and resulted in disruption of commodities supply, tightening credit environment, and retrenchment by banks and other working capital lenders. Some SME traders lost critical working capital for their supply chain had to reduce their trading activity, suspended operations, and others were driven into business suspension, bankruptcy and/or liquidation. Regulators together with the big accounting firms have increased their scrutiny of supply chain finance, seeking more transparency by proposing required financial disclosures. In other historical industry contractions, the industry restructured and overcame the setback. 

Environmental, Social and Governance (“ESG”)

We are committed to providing efficient and accessible trade and trade finance to SMEs in emerging markets in a manner that underscores our commitment to long term value creation, sustainability, and socially and environmentally thoughtful innovation. The SME sector is a key driver of growth and jobs creation as well as a pivotal social, technological and economic accelerator. Notably, every $1 million loaned to SMEs in developing countries is associated

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with the creation of an average of 16.3 direct jobs over two years, according to an International Finance Corporation (IFC) publication titled How Investing in SMEs create jobs (March 2021). Additionally, recent data from the Corporate Finance Institute (CFI) shows emerging market countries generate more than 50% of the world’s economic growth. Despite SMEs’ fundamental role in the global value chain, they invariably have difficulty accessing commercial, growth and working capital financing to obtain necessary materials and resources to grow their businesses.  We believe that our facilitation of critical trade and trade finance meaningfully improves (i) the lives and livelihood of customers who rely on our transformative technology to conduct global commerce, (ii) the global economic efficiency, and (iii) the communities in which we operate and engage various stakeholders. 

We are continually striving to advance our ESG efforts through a multi-faceted approach and aligned to key aspects of the UN Sustainable Development Goals 2030, including:

One notably philanthropic undertaking is our support of the Singapore Indian Education Trust (SIET). SIET is an Indian community trust fund that supports the education of Indians in Singapore, particularly those from economically disadvantaged backgrounds. Our donation helps to provide financial assistance, in the form of student loans, to students from low-income families in pursuit of their higher educational goals. To date, we have donated SGD100,000 and have committed the same amount for the next 2 years, post assessment of the philanthropic impacts and benefits of the donation on an annual basis.

Government Regulations

Our business of facilitating trade and trade finance between customers and financing providers on Kratos currently does not require licensing or registration in the countries in which we operate. Our wholly owned subsidiary Invoice Bazaar is a licensed provider of payments and forfaiting services. In the U.S., we take a measured approach to doing business to avoid comprising our status as a foreign private issuer or to inadvertently violate any applicable law. To date, we are not subject to any fintech- specific regulatory framework by any federal or state regulator although this area of law is rapidly evolving to keep pace with digital technology advancements especially as it concerns the adaptation of blockchain. Depending on our products and services offerings, we could be subject to complex federal and state licensing

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requirements and registrations, and ultimately, we will have to comply with these diverse laws and regulations at both a state and federal levels. As an example, if we were to change our business model or add modules to Kratos in respect of consumer lending, money transmission, any type of digital assets or even directly provide some of the services featured on our platform, we could be subject to a broad range of rules and regulations and a climate of heightened regulatory scrutiny, particularly with respect to compliance with laws and regulations, including financial and operational controls and business processes.

In Singapore, where we are headquartered, the Monetary Authority of Singapore (MAS) is the regulator of financial technology firms.  Like U.S. regulators, MAS and Dubai Financial Services Authority (DFSA) in Dubai International Financial Centre, are very supportive of financial technology companies like ours as a means to strengthen the financial sectors through innovative, sustainable and responsible technology while being focused on the deterrence of financial crimes. We are required to implement robust controls to detect and deter the flow of illicit funds through the financial system.  We have implemented KYC and AML checks as part of our onboarding processes for users of the platform to comply with applicable laws and best practices.  

Changes to existing laws, introduction of new laws, or failure to comply with existing laws that are applicable to us may subject us to, among other things, additional costs or changes to our business practices, liability for monetary damages, fines and/or criminal prosecution, unfavorable publicity, restrictions on our ability to obtain and process information and allegations by our customers and customers that we have not performed our contractual obligations, any of which may have a material adverse effect on profitability and cash flow.

Privacy and Information Security Regulations

Regulators are increasingly focused on ensuring that our customer privacy, data protection, cross-border data flow, information security and cyber security-related policies and practices are adequate to inform consumers of our data collection, use, sharing or security practices, to provide them with choices, if required, about how we use and share their information, and to safeguard their personal information. We maintain systems designed to comply with these privacy, data protection, information security and cyber security requirements, including procedures designed to securely process, transmit and store confidential information and protect against unauthorized access to such information.

In addition, some of our customers and/or financing providers are subject to regulatory oversight, which may result in our being reviewed from time to time by such oversight bodies. Privacy and Information Security Regulations Data privacy laws and regulations in the U.S. and foreign countries apply to the access, collection, transfer, use, storage, and destruction of personal information in connection with our services. In the U.S., financing providers that are regulated financial institutions are required to comply with privacy regulations imposed under the Gramm-Leach-Bliley Act, in addition to other regulations.

Privacy laws outside the U.S. may be more restrictive and may require different compliance requirements than U.S. laws and regulations and may impose additional duties on us in the performance of our services. As noted above, there has been increased public attention regarding the use of personal information and data transfer, accompanied by legislation and regulations intended to strengthen data protection, information security and consumer and personal privacy. The law in these areas continues to develop and the changing nature of

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privacy laws in the U.S., the European Union (“E.U”) and elsewhere could impact our processing of personal information of our employees and on behalf of our customers. In the E.U. the comprehensive General Data Privacy Regulation (the "GDPR") has introduced significant privacy-related changes for companies operating both in and outside the E.U. In the U.S., California has adopted the California Consumer Privacy Act, and several states are considering adopting similar laws imposing obligations regarding the handling of personal information. While we believe that we are compliant with our regulatory responsibilities, information security threats continue to evolve resulting in increased risk and exposure. In addition, legislation, regulation, litigation, court rulings, or other events could expose us to increased costs, liability, and possible damage to our reputation.

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Percentages refer to voting power of the Ordinary Shares held by the respective shareholders or shareholder groups.

All significant subsidiaries of the Company as of the date of this filing are listed below.

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Our properties consist of office space within general, commercial office buildings.  As of the fiscal year ended February 28, 2021 the only property leased by the Company is its headquarters in Singapore which is approximately 4,300 square feet.  Subsequent to the fiscal year ended February 28, 2021, the Company acquired additional leases for office space in Dubai and the United Kingdom of approximately 2,300 square feet.  The offices are used by the Company’s operations and administrative staff.  The Company does not own or lease any plants and does not lease any material fixed assets.

ITEM 4A. Unresolved Staff Comments

Not applicable.

ITEM 5. Operating and Financial Review and Prospectus

The following discussion and analysis summarize the significant factors affecting our results of operations, financial condition and liquidity position for the fiscal years ended February 28, 2021, February 29, 2020 and February 28, 2019 and should be read in conjunction with our financial statements and related notes included in this Annual Report. The following discussion and analysis contain forward-looking statements that reflect our plans, estimates and beliefs. Actual results could differ materially from those discussed in the forward-looking statements. See “Cautionary Note Regarding Forward-Looking Statements” beginning on page iii of this Annual Report. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report, particularly in the section titled “Risk Factors” beginning on page 1 of this Annual Report.

Overview

We facilitate trading, trade finance and the provision of credit insurance by insurers, for small to medium-sized enterprises (“SMEs”) using Kratos, our internally developed innovative blockchain-enabled technology platform.  Kratos is a diversified platform built to address the needs of SMEs in the trading and trade finance community by connecting traders and lenders and enabling them to transact online, solving mission critical problems for this historically underserved market.  Kratos enables SMEs and other parties to trade and find short term trade financing for their purchases while in transit and prior to delivery.  We believe Kratos is one of the world’s first large-scale (as measured by Total Transaction Volume) blockchain-enabled trade and trade finance platforms.  Our ability to launch the blockchain-enabled trade and finance platforms at the time that we did provides us with a first mover advantage to address the complexities and challenges in trade finance for SMEs.

Unless stated otherwise, all amounts presented are in U.S. Dollars.

Key Operating Metrics

We evaluate our performance through key operating metrics, including:

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The table below sets forth our Total Transaction Volume, Average Transaction Fee and Financing Ratio for the periods presented:

None of our key operating metrics were applicable during the fiscal year ended February 28, 2019, as the Kratos platform had not yet begun commercial operations. The initial commercial launch of the Trade Discovery sub-module of the Kratos platform occurred in June 2019. The initial commercial launch of the Trade Finance sub-module of the Kratos platform occurred in February 2020. The initial commercial launch of “Logistics” module occurred in February 2021.

Factors Affecting Our Results of Operations

We believe the following key factors and market trends affected our results of operations for the periods presented and expect that such factors and trends may continue to affect our results of operations in the future.

Usage of the Kratos Platform

Kratos was developed to provide customers with an easy and efficient platform to address all aspects of the purchase, including trading, trade finance, insurance and logistics, making it a potentially captive environment for users. We believe that the captive nature of the Kratos platform will enable it to become quickly accepted by the marketplace and provide a significant competitive advantage compared to traditional market participants. As the Kratos platform becomes more accepted, we believe it will drive, possibly exponentially, Transaction Volume on Kratos, which is the key driver of our revenue because it not only drives Transaction Fees it also primarily drives our Trade Finance Volume, which drives Trade Finance Fees. The

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Total Transaction Volume increased by approximately $6.2 billion, or 163.1%, to approximately $10.0 billion for the fiscal year ended February 28, 2021 compared to approximately $3.8 billion for the fiscal year ended February 29, 2020.

Wide-spread market acceptance of Kratos and the continuing introduction of new modules, which are expected to create new revenue streams, also have the potential to drive significant increases in our revenues. On September 23, 2020, the Company announced the introduction of an Insurance module and on January 8, 2021 the Company announced the introduction of a Logistics module.  If usage of Kratos does not increase as quickly as we believe it will, it could adversely impact our revenue growth rates. Increased usage of the Kratos platform and its service offerings will be dependent in part on our ability to include functionality and usability that address customer requirements, and optimally price our products and services to meet customer demand and cover our costs.

Prices and the Volume of Products Sold

Our revenues and results of operations for any given period are driven by the Transaction Volume of products purchased and sold by Kratos users during the period on the platform’s Trade Discovery sub-module, because in addition to Transaction Fees we earn, this also primarily drives our Trade Finance Volume and the Trade Finance Fees we earn. While a decline in product prices will not lead to a loss for us, as the facilitator of product transactions, any decrease in product prices, assuming no change in the quantity of the product transacted, would result in a proportional decrease to our platform fee. Furthermore, significant fluctuations in a products price could affect such consumption and trading volumes in general, which in turn could have a significant adverse effect on our results of operations. Products prices and the volumes produced and sold are influenced by many factors, including the supply of and demand, speculative activities by market participants, global political and economic conditions and related industry cycles and production costs in major producing countries. Prices may move in response to changes in production capacity in a particular market, for example as a new asset comes online or when a large producer experiences difficult operational issues or is impacted by a natural disaster.

Availability of Financing Sources

As we do not provide trade financing ourselves, our ability to facilitate trade financing and earn revenue from our Trade Finance sub-module is entirely dependent on the willingness of lenders and other traders using the Trade Finance sub-module to finance the transactions and provide trade credit. As a result, the availability of financing from lenders using the Trade Finance sub-module is a key driver of our overall business and results of operations. Some lenders are only willing to provide trade financing where credit insurance is available, so Trade Finance Volume is also linked to the availability of credit insurance.

Completion of the Business Combination

The Business Combination was consummated on November 10, 2020, and we have generated non-operating income in the form of interest income on cash and cash equivalents and other investments upon completion of the Business Combination in connection therewith. Since the completion of the Business Combination, we have incurred increased expenses as a result of being a public company (including, for legal, financial reporting, and compliance) and no longer have the benefit of accumulated tax losses from our formerly related parties. Our expenses have increased substantially since the closing of the Business Combination.

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Pursuant to IFRS, the Business Combination will be accounted for as the continuance of Fintech with recognition of the identifiable assets acquired and the liabilities assumed of Netfin at fair value. Operations prior to the Business Combination will be those of Fintech from an accounting point of view.

We believe that the following key factors will also affect our results of operations in the future.

Delisting of the Company’s Securities

On February 1, 2022, the Company received notice from the Staff stating that the Panel had denied the Company’s appeal of the Staff’s Determination to delist and suspend trading of the Company’s securities on Nasdaq. With the Panel’s decision having been rendered, trading in the Ordinary Shares and the Triterras Warrants on Nasdaq was be suspended effective with the open of business on February 3, 2022.

The Company initially elected to appeal the Panel’s decision to the Listing Council within the applicable 15-day appeal period.  However, the Company has withdrawn the appeal, and instead, will focus on the relisting of the Ordinary Shares and the Triterras Warrants on Nasdaq as soon as practicable through the normal application process. The Company will work with external advisors to meet the listing requirements of Nasdaq, including financial, liquidity and corporate governance standards. However, there can be no assurance that a market for the Company’s securities will develop.

We expect that Nasdaq will complete the delisting of the Ordinary Shares and the Triterras Warrants by filing a Form 25 Notification of Delisting with the SEC.

The delisting of the Company’s securities by Nasdaq may negatively influence a current or potential customer’s decision to use the Kratos platform which could have a negative impact on the Company’s results of operations and cash flows.

Recent Expansion of Kratos’ Offering

We believe that the attractiveness of the Kratos platform is and will be the ability to bring together the entire trading and trade finance ecosystem of buyers, sellers, traders, financiers, insurers and logistics providers to facilitate trading and trade finance. In order to do so, we will need to continue to expand our product offerings.  Recent offering additions include Insurance, and Logistic modules.

The Insurance module provides Kratos’ traders access to leading insurers, initiate inquiries, get quotes and sign up for insurance coverage directly.

The Logistics module digitizes key information to enable shipbrokers, operators and shipowners to do business together, further with their trading partners, within the Kratos digital platform.  The module eliminates the redundancies of paper-and-mail based legacy systems and helps the counterparties to better manage their assets and maximize decision making. The company does not currently plan to charge an additional fee for users that source logistics services on Kratos but believe the availability of logistics on Kratos will drive increased Transaction Volume and user growth.

Our Supply Chain module (offered from mid-2021 onwards) expands Kratos beyond commodities and focuses on the SME suppliers to large “anchor” buyers. The lender will

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provide immediate payment at the request of small suppliers who have otherwise offered deferred payment terms to the anchor buyer. We plan to charge suppliers that opt for supply chain finance a sourcing fee based on the amount financed.

Acquisition of all of the Outstanding Share Capital of IB Holdings LTD and Techfin Solutions FZCO.

On May 20, 2021, Fintech entered into a Share Purchase Agreement (the “Purchase Agreement”) to acquire all of the outstanding share capital of IB Holdings LTD (the “IB Holdings” or “Invoice Bazaar”), a privately-held United Arab Emirates-based supply chain finance company with operations in the United Arab Emirates and offices in Dubai and India, along with all of the share capital of Techfin Solutions FZCO (“Techfin”), a 99%-owned subsidiary of IB Holdings (the “Acquisition”).

Pursuant to the Purchase Agreement, by and among Fintech and the individuals listed in Schedule 1 thereto as sellers (the “IB Sellers”), Fintech agreed to acquire all of the shares of IB Holdings and Techfin for (i) an initial cash payment of $4.0 million, (ii) deferred cash consideration of $2.0 million payable in two $1.0 million tranches upon the earlier of each of the first and second anniversary of the initial cash payment, or the achievement of cumulative revenue milestones and (iii) up to $2.0 million in earn-out consideration, subject to achievement of certain revenue milestones and continued service with IB Holdings of certain members of the IB Holdings’ founding team. The IB Sellers will be additionally entitled to receive a portion of the proceeds of any sale of e-commerce business by Fintech within 24 months of the closing of the Acquisition.

The Invoice Bazaar platform allows the Company to provide an alternative form of financing on the Kratos platform which we believe will increase utilization of the Kratos platform by entering into new markets and diversify our innovative offerings.

Investment into a Cayman Islands fund, Trade Credit Partners Ltd.

The Company subscribed to the shares in Trade Credit Partners Ltd., a Cayman Islands exempted fund that exclusively invests in and manages trade finance assets “Trade Credit Partners”), for the sum of $15 million in August 2021 and subsequently in September 2021, subscribed a further $10 million into the said fund. The parties’ endeavor to execute the transactions on Kratos. The Company believes that this strategic investment is in line with its business strategy to evolve its business and will help attract new customers on the Kratos platform.

The Company will be reducing its investment in Trade Credit Partners to a level where the Company will not be required to comply with the Investment Company Act.

On an ongoing basis, the Company will conduct periodic testing prior to our acquisition or investment of assets, to ensure that the Company will not be deemed to be primarily engaged in an investment company business. 

Class-Action Lawsuit

See “Financial Information — Consolidated Statements and Other Financial Information — Legal Proceedings.”

Share Repurchases

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On January 18, 2021, the Company announced a share repurchase program of up to $50.0 million of its ordinary shares and it commenced the program on February 12, 2021. As of February 28, 2021, the Company had spent $14.3 million on repurchasing 1,831,532 ordinary shares at an average price per share of $7.79 per share and incurred commission costs of $37,000. On April 20, 2021, the Company completed its share repurchase program, having spent a total of $49.9 million repurchasing 6,671,788 of its ordinary shares and incurring commission fees of $133,000. As of the date of this Annual Report, the Company had 6,671,788 treasury shares compared to 1,831,532 treasury shares as of February 28, 2021. The weighted average number of treasury shares for the fiscal year ended February 28, 2021 was 33,895.

Business Segment

The Company operates a single operating segment, the trading platform business. The activities of the operating segment have similar economic characteristic. The internal financial information provided to the Company’s chief operating decision maker, the Company’s CEO, is of the trading platform business. The Company has concluded that the trading platform business is the Company’s only reportable operating segment.

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Results of Operations

The results of operations presented below should be reviewed in conjunction with the financial statements and notes included elsewhere in this Annual Report. The following table sets forth our results of operations for the periods presented:

Comparison of Fiscal Years ended February 28, 2021 and February 29, 2020

Revenue

The table below set forth details of our revenue for the fiscal years indicated.

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Our revenue is primarily derived from platform service fees from both the “Trade Discovery” sub-module of the Kratos platform which launched in June 2019, as well as the “Trade Finance” sub-module of the Kratos platform which launched in February 2020, and license fees. Our revenue increased by $38.6 million, or 228.3%, to $55.5 million for the fiscal year ended February 28, 2021 compared to $16.9 million for the fiscal year ended February 29, 2020. Please read below for a discussion of the factors affecting the Company’s revenue.

Platform service fees increased by $38.6 million, or 228.3%, to $55.4 million for the fiscal year ended February 28, 2021 compared to $16.9 million for the fiscal year ended February 29, 2020.  The increase in revenue was primarily due to a $6.2 billion, or 163.1%, increase in Total Transaction Volume, which was primarily due to increased trading volume on the Kratos platform. This increase in revenue was due to the increase in Average Transaction Fee to 0.55% for the fiscal year ended February 28, 2021 as compared 0.44% for the fiscal year ended February 28, 2020. The Average Transaction Fee increase was primarily due to an increase in Total Transaction Volume along with an increase in the Financing Ratio to 34.1% for the fiscal year ended February 28, 2021 compared to 5.1% for the fiscal year ended February 29, 2020.

Of the revenue we generated for the fiscal years ended February 28, 2021, and February 29, 2020, $5.2 million, or 9.3%, and $4.5 million, or 26.7%, respectively, were attributable to services provided to related parties, namely Antanium Resources (previously known as Rhodium) and its subsidiaries. Since the fourth quarter of the fiscal year ended February 28, 2021, there have been no further transactions entered into on the Kratos platform by Rhodium and there are no due/to from balances with Rhodium.

The Company anticipates revenue to be flat to slightly down for the first six months ended August 31, 2021 when compared to the first six months ended August 31, 2020.  Trends impacting revenue, which are impacting SME traders, include supply chain disruption from COVID-19, extended business cycle times, reduced availability and increased premium rates for trade credit insurance, reduced liquidity and financial difficulties in the trade finance marketplace, reduced trading activity, and business suspensions and liquidations.

Costs and Expenses

Cost of revenue

Cost of revenue consists of (i) expenses related to operation of the IT platform, (ii) IT expenses and (iii) expenses related to cloud management (service fees and bandwidth costs). Our cost of revenue increased by $4.1 million, or 3,921.9%, to $4.2 million for the fiscal year ended February 28, 2021 compared to $0.1 million for the fiscal year ended February 29, 2020. This increase was primarily due to the increase in IT staffing and related expenses to support our increase in business volume. As a percentage of revenue, our cost of revenue was 7.5% for the fiscal year ended February 28, 2021 compared with 0.6% for the fiscal year ended February 29, 2020.  The primary driver of the increase in cost of revenue as a percentage of revenue for the fiscal year ended February 28, 2021, was related to the cost to operate the Kratos platform.

Research and Development

Research and development expenses primarily relate to the amortisation of IT expenses incurred for the design interface of the Kratos platform and other administrative expenses. We incurred $189,029 of research and development expenses for the fiscal year ended February

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28, 2021, of which $141,644 was from the amortisation of capitalized development costs and $47,385 was from research and development activities that are expensed as incurred. We incurred $9,172 of research and development expenses for the fiscal year ended February 29, 2020, entirely related to the amortisation of capitalized development costs.

Marketing and Sales

Marketing and sales expenses consist of (i) marketing and promotional expenditures, (ii) consultancy services relating to business development and (iii) amortisation of contract costs. During the fiscal year ended February 28, 2021, the Company entered into an agreement with an external party to pay commission fees for every successful customer referral upon signing of the subscription agreement of 3 years. These costs are capitalised as it is directly attributable to obtaining a customer’s contract and the Company expects to recover these costs. The contract costs are amortized over the subscription period of 3 years.

Marketing and sales expenses were $4.3 million for the fiscal year ended February 28, 2021, compared to $21,241 for the fiscal year ended February 29, 2020. Please read below for a discussion of the factors affecting the Company’s marketing and sales expenses.

General and Administrative

General and administrative expenses consist of (i) staff costs (including salaries, traveling expenses, benefits and related items), (ii) management fees (which relate to staff costs, accounting and administrative support services and office space recharges from the intermediate holding company), (iii) professional fees (including fees for lawyers), (iv) consultancy fees and (v) depreciation of right-of-use assets.  

Our general and administrative expenses increased by $13.0 million, or 929.9%, to $14.4 million for the fiscal year ended February 28, 2021 compared to $1.4 million for the fiscal year ended February 29, 2020. Please read below for a discussion of the factors affecting the Company’s general and administrative expenses.

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The Company expects general and administrative expenses to increase significantly for the first six months ended August 31, 2021 when compared to the first six months ended August 31, 2020 due to increases in staffing costs and professional advisors’ expenses.  These increases are attributed to activities associated with operating as a public company (including implementing additional procedures and processes for the purpose of addressing the standards and requirements applicable to public companies), on-going general corporate, regulatory and legal compliance requirements and the retention of external advisors in connection with the independent internal investigation, and the class action lawsuit.  In addition, the Company will incur additional expenses as it takes steps to relist its securities on a public exchange.

Impairments

Trade Receivables

Impairment loss on trade receivables consists of impairments of past due receivables for services provided by the Kratos platform, which are invoiced to users on a monthly basis and are payable in 90 days. We recognized an impairment loss on trade receivables of $3.9 million for the fiscal year ended February 28, 2021, based on our expected credit losses on $27.0 million in total gross carrying amount of trade receivables as of February 28, 2021. Of the total gross carrying amount of trade receivables, $13.2 million, or 49.1% were past due as of February 28, 2021. We recognized an impairment loss on trade receivables of $183,232 for the fiscal year ended February 29, 2020, based on our expected credit losses on $13.5 million in total gross carrying amount of trade receivables as of February 29, 2020.

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Intangible Assets

Due to the nature of the business of Triterras as a fintech platform, the company's intangible assets consist mainly of software and related IP.  The characteristic of platform software is its fast evolution partly in response to an ultra-competitive market competition where service level enhancement and minimization of platform performance latency is paramount.  This implies that fast prototyping and time to market is imperative, and a concomitant side effect is that impairment tests are an integral part of the software application development life cycle as part of a normal course of business. 

At each reporting period the Company is required to assess whether or not the carrying value of its intangible assets are in excess of their fair value.  If the carrying value of intangible assets is in excess of their fair value, an impairment charge is taken to reduce the carrying value to equal its fair value.  The determination of fair value requires the use of estimates and judgments.  Fair value is determined by applying a discounted cash flows model (“DCF”) to determine the value in use or the net realizable value.  Inputs to a DCF model include estimates of the performance of the business over a period of time and a discount rate. The discount rate used reflects a weighted average cost of capital for a representative peer group of financial technology companies. In developing the DCF, the company considered the adverse effect from the short report, the impact of the delisting of our securities and the class action lawsuit along with global and industry specific economic factors impacting the financial technology marketplace. In particular, the company considered the applicable software generation and requirements for migration to new architectures.  Based on this assessment, we have determined that the carrying value of our intangible assets on the Consolidated Statement of Financial Position as of February 28, 2021 is in excess of their fair value.  As a result, the Company has recorded an impairment charge of $1.9 million for the fiscal year ended February 28, 2021.

Contract Costs

The Company entered into an agreement with an external party to pay commission fees for every successful customer referral upon signing with the customer a 3-year subscription agreement that incorporates a condition to achieve an agreed target volume. These costs were capitalised as they are directly attributable to obtaining a customer’s contract which the Company expects to recover through referrals made by the external party.  The contract costs are amortized over the subscription period of 3 years.  The Company has concluded that certain customers referred by the external party will not meet the target volume anticipated in the subscription agreement.  As a result, the Company has recorded an impairment charge of $1.1 million.

Other Income

We had other income of $113,000, which was primarily related to recognition in the period of a government grant received in connection with the development of the Kratos platform in the fiscal year ended February 28, 2021. We had no other income for the fiscal year ended February 29, 2020.

Change in fair value of warrant liabilities

Outstanding warrant liabilities are remeasured to an updated fair value at each reporting period with changes in fair value recorded to “warrant liabilities” in the consolidated statement

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of financial position and to “change in fair value of warrant liabilities” in the consolidated statement of comprehensive income. See “Note 17 – Warrant Liabilities” in the notes to our consolidated financial statements included in this Annual Report for a description how the fair value of warrants are determined.  We expect to incur incremental income (expense) for the fair value adjustments until warrants are either exercised or expire. At February 28, 2021 the fair value adjustment resulted in $26.1 million of income.

Triterras Public Warrants and Private Warrants as of February 28, 2021 were valued using Level 1 and Level 2 Inputs, respectively.  As a result of the delisting of the Company’s securities by Nasdaq, valuations of the Triterras Warrants, after the date of the delisting, will be valued using Level 3 inputs until such time that there is an observable market quote for the Triterras Warrants.

Net Finance Cost

Finance income comprises interest income and foreign exchange gains. Finance costs comprise bank charges, interest expense and foreign exchange loss. Foreign currency gains and losses on financial assets and financial liabilities are reported on a net basis as either finance income or finance cost depending on whether foreign currency movements are in a net gain or net loss position.

Our net finance cost increased by $81,004 to $82,479 for the fiscal year ended February 28, 2021 compared to $1,475 for the fiscal year ended February 29, 2020.  The increase was primarily due to a $75,506 increase in interest expense and a $40,036 foreign exchange loss, which was partially offset by a $47,802 increase in interest income.

Income Tax Expense

Our income tax expense for the fiscal year ended February 28, 2021 was $6.3 million for an effective tax rate was 12.3%, which is lower than the statutory tax rate of 17% in Singapore. The lower effective tax rate was primarily the result of tax exempt income.

Our income tax expense for the fiscal year ended February 29, 2020 was $1.6 million. For the fiscal year ended February 29, 2020, our effective tax rate was 10.5%, which was lower than the statutory tax rate of 17% in Singapore. This was primarily due to the impact of unutilized tax losses carried forward from the prior period and tax losses available to be utilized from our related parties.

Comparison of the Fiscal Years ended February 29, 2020 and February 28, 2019

Triterras Inc. was incorporated on January 11, 2018 and the initial commercial launch of the Kratos platform occurred in June 2019.  For the fiscal year ended February 28, 2019, the Company only incurred costs of $2.0 million related to the launch of the Kratos platform.

Non-IFRS Financial Measures

We use certain measures derived from financial data but not presented in our financial statements prepared in accordance with IFRS, which include primarily EBITDA*. Non-IFRS financial measures in this Annual Report are indicated by “*”. We calculate EBITDA* by adding net finance costs, income tax expense, depreciation, amortisation of intangible assets, amortisation of contract costs, change in fair value of warrant liabilities, to our profit for the year. Adjusted EBITDA* is not a measurement of financial performance or liquidity under

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IFRS and should not be considered as an alternative to profit for the period, operating income or any other performance measures derived in accordance with IFRS or an alternative to cash flows from operating activities as a measure of liquidity. Our presentation of Adjusted EBITDA* may not be comparable to similarly titled measures presented by other companies. We use Adjusted EBITDA* and related measures to facilitate company-to-company and period-to-period comparisons and reflect our core performance, because it excludes the effects of income tax expense, net finance costs, depreciation and amortisation. Our management also believes that Adjusted EBITDA* and related measures are used by investors, analysts and other interested parties as measures of financial performance.

Adjusted EBITDA* is reconciled to profit for the year, its most closely comparable IFRS measure, in the tables below:

Our Adjusted EBITDA* increased by $11.8 million, or 77.9%, to $27.0 million for the fiscal year ended February 28, 2021 compared to $15.2 million for the fiscal year ended February 29, 2020.  The increase was primarily due to increased volume on the Kratos platform.  Our Adjusted EBITDA* of ($2.0 million) for the fiscal year ended February 28, 2019 consists primarily of development related costs for the Kratos platform which had not yet launched commercially during the fiscal year ended February 28, 2019.

We monitor our liquidity risk and maintain a level of cash and cash equivalents, deemed adequate by management to finance our operations and to mitigate the effects of fluctuations in cash flows. We consider cash from operating activities as the principal source of cash generation for our businesses. As of the date of this filling, we believe that our cash from operations is sufficient to fund ongoing operations, including development costs for the Kratos platform, and other capital expenditure for at least the next 12 months. The Company’s cash and cash equivalents at February 28, 2021 reflected primarily the generation of cash through operations, proceeds from capitalization of Netfin shares, net of redemptions and issuance costs offset in part by cash utilized in the Company’s stock buyback program, net of utilizations.

As of February 28, 2021, we had cash and cash equivalents of $134.0 million which excludes $35.7 million of restricted cash being held to repurchase the Company’s common share under the announced share buyback program. The Company’s cash balances are substantially held in U.S. Dollars.  As of February 28, 2021, our “trade receivables – from external customers” were $22.9 million and our “trade receivables – from related companies”

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were zero. Trade and other receivables are generally payable an average of 90 days following invoice generation (in May 2021 we extended our payment term to 120 days).  As of February 28, 2021 49.1% of gross trade receivables are past due. As of the date of this Annual Report, 94% of the outstanding trade receivables as of February 28, 2021 have been collected.  Of the trade receivables outstanding as of August 31, 2021, 63% are outstanding as of the date of this Annual Report.  During the fiscal year ended February 28, 2021, the Company recorded an additional impairment loss on trade receivables of $3.9 million. We have had, and continue to experience, delays in collection of receivables which is in large part due to liquidity issues faced by our customers because of COVID-19.

As noted above, we expect that Nasdaq will complete the delisting of the Ordinary Shares and the Triterras Warrants by filing a Form 25 Notification of Delisting with the SEC. The delisting of the Ordinary Shares and Triterras Warrants will likely affect the liquidity of such securities and could inhibit or restrict our ability to raise additional financing, among other things.

Although the Company will pursue the relisting of the Ordinary Shares and the Triterras Warrants on Nasdaq as soon as practicable through the normal application process, there can be no assurance that the Company’s securities will be re-listed on Nasdaq or that a future market for the Company’s securities will develop. The delisting of the Company’s securities by Nasdaq may negatively influence a current or potential customer's decision to use the Kratos platform which could have a negative impact on the Company’s operating cash flows.  

Cash Flows

The following table sets forth our cash flows for the fiscal years presented:

Operating Activities

Net cash provided by operating activities consists primarily of net income adjusted for noncash items, changes in working capital and income tax expense. The timing between the conversion of our trade receivables into cash from our customers and distributions to our employees and vendors are the primary drivers of changes to our working capital.

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Net cash from operating activities increased by $23.9 million to $24.2 million for the fiscal year ended February 28, 2021, compared to $0.3 million for the fiscal year ended February 29, 2020. The increase in net cash provided by operating activities is primarily due to a $18.6 million increase in net income after adjusting for non-cash items, a $9.4 million change in other payables primarily related to increases in accruals and provisions and a $3.2 million change in other current assets primarily related to prepaid insurance, offset in part by a $5.4 million change in contract costs paid related to prepaid customer referral commissions and a $1.7 million change in trade receivables (please see the discussion above regarding the impact trade receivables have on our operating cash flows).  Cash used in operating activities for the fiscal year ended February 28, 2019 were for expenditures related to the launch of the Kratos platform.

Investing Activities

Net cash used in investing activities is related to development of our Kratos platform, business acquisitions and acquisitions of plant and equipment

Net cash used in investing activities increased by $9.3 million to $9.4 million for the fiscal year ended February 28, 2021, compared to $0.1 million for the fiscal year ended February 29, 2020. The increase in net cash used in investing activities is primarily related to the development of the Kratos platform.

As discussed earlier in Item 5, the Company will be using cash, subsequent to the fiscal year ended February 28, 2021, to acquire IB Holdings for up to $8.0 million. IB Holdings will be additionally entitled to receive a portion of the proceeds for any sale of e-commerce business by Triterras within 24 months of the closing of our acquisition of IB Holdings. The Company will also be using cash of $25 million to subscribe to shares in Trade Credit Partners Ltd.

Financing Activities

Net cash provided by financing activities increased by $154.7 million, which was primarily related to proceeds from capitalisation of Netfin shares, net of redemptions and issuance costs of $99.2 million and warrants assumed of $69.9 million. This increase was primarily offset by the purchase of shares of the Company’s Ordinary Shares through the Company’s share buyback program of $14.3 million.  (On April 20, 2021, the Company completed its share buyback program, having spent a total of $49.9 million repurchasing 6,671,788 of its ordinary shares and incurring commission fees of $133,000.)  Cash provided by financing activities for the fiscal year ended February 28, 2019 relate to proceeds from a loan that was paid off during the fiscal year ended February 29, 2020 from the proceeds from the issuance of ordinary shares.

The delisting of the Company’s Ordinary Shares and Triterras Warrants by Nasdaq may negatively impact the Company’s future ability to raise funds in capital markets.

Capital Expenditures

We expect that for the year ending February 28, 2022, we will spend approximately $54 million for the development of the Kratos platform and expansion of our operations, most of which will be funded from cash and cash equivalents.

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While we have no other capital expenditures planned for the fiscal year ending February 28, 2022, other than the IB Holdings acquisition and the Trade Credit Partners subscription previously discussed in Item 5, we are an opportunistic organization and any opportunities that arise for accretive acquisitions of existing offline businesses in the trading ecosystem, whose customer base could increase the growth of Kratos, or certain technology offerings, such as artificial intelligence, analytics and dashboard reporting, credit scoring and rating solutions and payment processing solutions, which would allow for additional features to be added to Kratos, may be considered.

Contractual Obligations

The following table sets forth certain information about our contractual obligations as of February 28, 2021:

Subsequent to the fiscal year ended February 28, 2021, the Company extended its office lease in Singapore for another three years.  With the acquisition of IB Holdings on May 20, 2021, the Company now leases office space in Dubai and during the fiscal year ended February 28, 2022 the Company entered into a lease for an office in the UK.

Off Balance Sheet Arrangements

None.

For the periods presented, expenditure on research activities are recognised in profit or loss as incurred.  Development expenditure are capitalised only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable from license and platform fee charges to platform users and the Company intends to and has sufficient resources to complete development and to use or sell the asset. Otherwise, it is recognised in profit or loss as incurred. Subsequent to initial recognition, development expenditures are measured at cost less accumulated amortisation and any accumulated impairment losses.  Capitalised development expenditures are measured at cost less accumulated amortisation and accumulated impairment losses.

Research and Development

We have built our Kratos platform in-house. We employ and outsourced research and development personnel to enhance the Kratos platform and develop new modules for the Kratos platform. As of February 28, 2021, we had 7 employees involved in research and development activities.

For the fiscal year ended February 28, 2021, we spent $9.9 million ($9.7 million of which was capitalised) and for the fiscal year ended February 29, 2020 we spent, $309,000 ($300,000 of which was capitalised).

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Intellectual Property

“Kratos” is a registered trademark in Singapore.

Other than as disclosed in this Annual Report, we are not aware of any trends, uncertainties, demands, commitments or events for the current fiscal year that are reasonably likely to have a material effect on our net revenues, income, profitability, liquidity or capital reserves, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.

We prepare our consolidated financial statements in accordance with IFRS as issued by the IASB, as such, we are not required to disclose our critical accounting estimates.

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ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.Directors and Executive Management

The directors and Executive Management information below is as of the filing date of this Annual Report.

1.Board of Directors and Executive Management