Month: July 2022

Powell’s Economic Soft Landing Requires More Room to Change his Mind

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Image Credit: Federal Reserve (Flickr)


The Fed Chairman is Less Likely to Box Himself in With Specific Promises

It might surprise investors born after 1990 that back when 69-year-old Jerome Powell was a young man working for an investment bank, the Fed was very secretive. There was no forward guidance announced, and rate moves were never made immediately after FOMC meetings. Instead, the Fed changed policy secretly on random Fridays. Any adjustments to Fed Funds levels were not made certain to the public until the minutes were released over a month later. The markets were instead left to figure out what the Fed may or may not be doing.

The covert Fed slowly became more open under pressure from Congress toward the end of Greenspan’s 18 years. His last term ended in early 2006. He was followed by Bernanke, who, as part of the financial crisis of 2008, moved toward an even more overt Fed, signaling what to expect years out so that markets would be calmed. Yellen followed Bernanke and continued the policies of setting longer-term expectations.

Powell’s first term caused another leap toward more openly showing the Fed’s playbook to the world. The Fed made sure there were no surprises and worked to calm fears. After all, he was Fed chair during the pandemic, it became important for the U.S. central bank to show it had a plan; this helped to maintain confidence in economies worldwide.

Today Powell has continued his pandemic era guidance up until the last interest rate move in June, where he moved more aggressively than previously stated he would. Otherwise, he has, well in advance, let markets know when and by how much rates are going to move. In June, he had previously guided a 50bp tightening. Just prior to the meeting, stronger economic numbers were released; this prompted the FOMC to move by more than the initial telegraphed guidance.

Since it began its current round of interest-rate hikes this year, the U.S. Federal Reserve has aimed to let investors know ahead of time, not just where rates are heading but exactly how big a move to expect each time. It also more aggressively reduced its previously announced purchase of securities (tapering) as it became clearer to Fed governors that inflation was more persistent than transitory.

Fed Chair Powell wants the markets to know that he reserves the right to change plans as conditions change. He did this by moving 75bp in June and by changing the tapering strategy. Conditions are now too uncertain to be locked into 90-day-old promises. He isn’t likely to abandon telegraphing expectations, but he doesn’t want to jolt the market if he and other voting members of the FOMC adjust their thinking last minute. This gives them more flexibility.

The Fed’s ability to be more nimble and pivot should create confidence within the markets. During the 2008 financial crisis, what the markets needed to hear was rates would be held low for a long time; this way, capital could flow with increased confidence. Now the confidence would seem to come from the comfort that the Fed will do what it takes even if it shifts its plans unannounced and more quickly.

“It’s a very difficult environment to try to give forward guidance 60, 90 days in advance,” Powell said during a press conference on May 4th. “There are just so many things that can happen in the economy and around the world. So, you know, we’re leaving ourselves room to look at the data and make a decision as we get there.”

Take Away

As the head of the world’s most powerful central bank, battling record inflation, Powell’s primary duty is to get it right; estimating what the months ahead will bring is too difficult, and tying the Fed’s hands with pre-announced moves could interfere with the needed precision to achieve an economic soft landing.

On Wednesday, July 27th, the FOMC ends a two-day meeting at which they are expected to agree on a 0.75 percentage point increase. It is likely that the statement afterward will again put parameters around what to expect after the September 20-21 meeting. But that meeting is two months away, so the wording may be less exacting than we have become accustomed to.

Paul Hoffman

Managing Editor, Channelchek

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Sources

https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20220504.pdf

https://www.reuters.com/markets/us/fed-chair-powell-is-not-done-telling-markets-where-rates-will-go-2022-07-26/

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What is Earnings Season? (In 500 Words or Less)

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Company Reporting Investors Follow Closely

Four times a year, companies that issue shares of stock release financial statements covering the prior three months. The publicly traded companies are required to disclose, among other things, their quarter-end balance sheet and income statement information. There is a big focus from investors on the companies’ income numbers. These reporting periods have come to be known as “earnings season.”

There are no official or specific dates that mark the beginning or the end of the period; however, the majority of publicly traded U.S. companies disclose their quarterly earnings more or less around the same time. The only official requirement is that the earnings reports be released within 45 days of the end of each of the company’s quarter-ends.

When is It?

Most companies follow a fiscal calendar from January 1st through December 31st, with the earnings season being the weeks following the calendar quarter-ends (March, June, September, and December). The end of each month will mark the “beginning” of earnings season for that quarter; at this time, company earnings reports begin hitting the tape, and markets begin to react accordingly.

Why it is Important

By the time a company’s financial disclosures are released, expectations from analysts and market participants have already been baked into the stock price. Earnings season has the power to dramatically move stock prices by how expectations match up with reality. If a company’s results beat or fall short of analysts’ expectations, then its stock may experience an unexpected price move as the market adjusts the price to what it is now believed to be worth with the updated financials.

Volatility in the market tends to be higher during these periods as a higher number of stock prices readjust dramatically. Market sectors may do better or worse if several companies in the sector beat or miss expectations. Others in the industry that haven’t yet reported may trade in anticipation of also performing similarly. There is a ripple effect one company’s results may have on others in its sector and even the broader market.

Earnings Season May Affect Your Stock-Level Investment
Decisions

If you are considering buying a company’s stock, earnings reports and earnings trends offer a way to gauge the health of its business. Channelchek is a resource for financial
information on over 6,000 small and microcap companies, not often reported on mainstream financial news.

Paul Hoffman

Managing Editor, Channelchek

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Release – Tonix Pharmaceuticals Announces Appointment of Sina Bavari, Ph.D. as Executive Vice President, Infectious Disease Research and Development

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Tonix Pharmaceuticals Announces Appointment of Sina Bavari, Ph.D. as Executive Vice President, Infectious Disease Research and Development

Research, News, and Market Data on Tonix Pharmaceuticals

CHATHAM, N.J., July 25, 2022 (GLOBE NEWSWIRE) — Tonix Pharmaceuticals Holding Corp. (Nasdaq: TNXP) (Tonix or the Company), a clinical-stage biopharmaceutical company, today announced the appointment of Sina Bavari, Ph.D. as its new Executive Vice President, Infectious Disease Research and Development. In this role, Dr. Bavari will be responsible for leading Tonix’s development of its growing infectious disease pipeline and will serve as a key member of the Company’s executive leadership team. Dr. Bavari will be based in Frederick, Md. and, as part of his role, will oversee scientific development at Tonix’s Infectious Disease R&D Center located there.

“We are delighted that Dr. Bavari has joined our team to lead our infectious disease research and development efforts,” said Seth Lederman, M.D., President and Chief Executive Officer of Tonix Pharmaceuticals. “Dr. Bavari has a proven track record of innovation and of developing scientific strategies as well as leading programs at all stages of discovery and development.”

“I am excited to join Tonix and to lead the Company’s efforts in infectious disease research and development programs, including vaccines in development for monkeypox, smallpox and COVID-19,” said Dr. Bavari. “The Frederick, Md. Research and Development Center, or RDC, is a state-of-the-art facility with exceptional capabilities. The facility is up and running and is staffed by an outstanding team of scientists. I look forward to leveraging my years of experience in industry and government to expedite this important work with the goal of ultimately solving health problems on a global basis.”

Dr. Bavari has a record of achievement utilizing new and complex technologies and in guiding programs through clinical decision points into advanced development. He is an inventor of approximately 30 patents, published over 300 peer-reviewed manuscripts and contributed to 15 development candidates, as well as numerous Investigational New Drug candidate filings. Most recently, he served as Chief Scientific Officer / Scientific Director at the U.S. Army Research Institute of Infectious Diseases (USAMRIID) and has held numerous leadership roles at USAMRIID, including Chief, Molecular and Translational Sciences Division and Therapeutic Discovery Center; Chief, Target Discovery & Experimental Microbiology, Integrated Toxicology Division; and Chief, Immunology, Target Identification, and Translational Research, Bacteriology Division. Dr. Bavari earned his Ph.D. in Immunotoxicology and Pharmaceutical Science at the University of Nebraska Medical Center in Omaha, Neb., and his M.S. in Nuclear Physics and Nuclear Pharmacy at the University of Southern California, Los Angeles.

Tonix Pharmaceuticals
Holding Corp.*

Tonix is a clinical-stage biopharmaceutical company focused on discovering, licensing, acquiring and developing therapeutics to treat and prevent human disease and alleviate suffering. Tonix’s portfolio is composed of central nervous system (CNS), rare disease, immunology and infectious disease product candidates. Tonix’s CNS portfolio includes both small molecules and biologics to treat pain, neurologic, psychiatric and addiction conditions. Tonix’s lead CNS candidate, TNX-102 SL (cyclobenzaprine HCl sublingual tablet), is in mid-Phase 3 development for the management of fibromyalgia with a new Phase 3 study launched in the second quarter of 2022 and interim data expected in the first quarter of 2023. TNX-102 SL is also being developed to treat Long COVID, a chronic post-acute COVID-19 condition. Tonix expects to initiate a Phase 2 study in Long COVID in the third quarter of 2022. TNX-1300 (cocaine esterase) is a biologic designed to treat cocaine intoxication that is mid-Phase 2 and has been granted Breakthrough Therapy Designation by the FDA. TNX-1900 (intranasal potentiated oxytocin), a small molecule in development for chronic migraine, is expected to enter the clinic with a Phase 2 study in the second half of 2022. Tonix’s rare disease portfolio includes TNX-2900 (intranasal potentiated oxytocin) for the treatment of Prader-Willi syndrome. TNX-2900 has been granted Orphan-Drug Designation by the FDA. TNX-601 ER (tianeptine hemioxalate extended-release tablet) is being developed as an antidepressant in the U.S., with a Phase 2 study expected to be initiated in first quarter of 2023 pending IND clearance. Tonix’s immunology portfolio includes biologics to address organ transplant rejection, autoimmunity and cancer, including TNX-1500, which is a humanized monoclonal antibody targeting CD40-ligand being developed for the prevention of allograft and xenograft rejection and for the treatment of autoimmune diseases. A Phase 1 study of TNX-1500 is expected to be initiated in the first half of 2023. Tonix’s infectious disease pipeline consists of a vaccine in development to prevent smallpox and monkeypox called TNX-801, next-generation vaccines to prevent COVID-19, and a platform to make fully human monoclonal antibodies to treat COVID-19. Tonix’s lead vaccine candidate for COVID-19 is TNX-1850, a live virus vaccines based on Tonix’s recombinant pox live virus vector vaccine platform.

*All of Tonix’s product
candidates are investigational new drugs or biologics and have not been
approved for any indication.

This press release and further information about Tonix can be found at www.tonixpharma.com.

Forward Looking
Statements

Certain statements in this press release are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words such as “anticipate,” “believe,” “forecast,” “estimate,” “expect,” and “intend,” among others. These forward-looking statements are based on Tonix’s current expectations and actual results could differ materially. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, risks related to the failure to obtain FDA clearances or approvals and noncompliance with FDA regulations; delays and uncertainties caused by the global COVID-19 pandemic; risks related to the timing and progress of clinical development of our product candidates; our need for additional financing; uncertainties of patent protection and litigation; uncertainties of government or third party payor reimbursement; limited research and development efforts and dependence upon third parties; and substantial competition. As with any pharmaceutical under development, there are significant risks in the development, regulatory approval and commercialization of new products. Tonix does not undertake an obligation to update or revise any forward-looking statement. Investors should read the risk factors set forth in the Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the Securities and Exchange Commission (the “SEC”) on March 14, 2022, and periodic reports filed with the SEC on or after the date thereof. All of Tonix’s forward-looking statements are expressly qualified by all such risk factors and other cautionary statements. The information set forth herein speaks only as of the date thereof.

Contacts

Jessica Morris (corporate)

Tonix Pharmaceuticals
investor.relations@tonixpharma.com 
(862) 904-8182

Olipriya Das, Ph.D. (media)

Russo Partners
Olipriya.Das@russopartnersllc.com 
(646) 942-5588

Peter Vozzo (investors)
Westwicke/ICR

peter.vozzo@westwicke.com 
(443) 213-0505


Primary Logo

Source: Tonix Pharmaceuticals Holding Corp.

Released
July 25, 2022

 


Has AI Outgrown Our Ability to Measure its Performance?

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Image Credit: Christine Daniloff (MIT)


How to Tell if Artificial Intelligence is Working the Way We Want it To

 

Adam Zewe | MIT
News Office

About a decade ago, deep-learning models started achieving superhuman results on all sorts of tasks, from beating world-champion board game players to outperforming doctors at diagnosing breast cancer.

These powerful deep-learning models are usually based on artificial neural networks, which were first proposed in the 1940s and have become a popular type of machine learning. A computer learns to process data using layers of interconnected nodes, or neurons, that mimic the human brain.

As the field of machine learning has grown, artificial neural networks have grown along with it.

Deep-learning models are now often
composed of millions or billions of interconnected nodes in many layers that
are trained to perform detection or classification tasks using vast amounts of
data. But because the models are so enormously complex, even the researchers
who design them don’t fully understand how they work. This makes it hard to
know whether they are working correctly.

For instance, maybe a model designed to help physicians diagnose patients correctly predicted that a skin lesion was cancerous, but it did so by focusing on an unrelated mark that happens to frequently occur when there is cancerous tissue in a photo, rather than on the cancerous tissue itself. This is known as a spurious correlation. The model gets the prediction right, but it does so for the wrong reason. In a real clinical setting where the mark does not appear on cancer-positive images, it could result in missed diagnoses.

With so much uncertainty swirling around these so-called “black-box” models, how can one unravel what’s going on inside the box?

This puzzle has led to a new and rapidly growing area of study in which researchers develop and test explanation methods (also called interpretability methods) that seek to shed some light on how black-box machine-learning models make predictions.


What are Explanation Methods?

At their most basic level, explanation methods are either global or local. A local explanation method focuses on explaining how the model made one specific prediction, while global explanations seek to describe the overall behavior of an entire model. This is often done by developing a separate, simpler (and hopefully understandable) model that mimics the larger, black-box model.

But because deep learning models work in fundamentally complex and nonlinear ways, developing an effective global explanation model is particularly challenging. This has led researchers to turn much of their recent focus onto local explanation methods instead, explains Yilun Zhou, a graduate student in the Interactive Robotics Group of the Computer Science and Artificial Intelligence Laboratory (CSAIL) who studies models, algorithms, and evaluations in interpretable machine learning.

The most popular types of local explanation methods fall into three broad categories.

The first and most widely used type of explanation method is known as feature attribution. Feature attribution methods show which features were most important when the model made a specific decision.

Features are the input variables that are fed to a machine-learning model and used in its prediction. When the data are tabular, features are drawn from the columns in a dataset (they are transformed using a variety of techniques so the model can process the raw data). For image-processing tasks, on the other hand, every pixel in an image is a feature. If a model predicts that an X-ray image shows cancer, for instance, the feature attribution method would highlight the pixels in that specific X-ray that were most important for the model’s prediction.

Essentially, feature attribution methods show what the model pays the most attention to when it makes a prediction.

“Using this feature attribution explanation, you can check to see whether a spurious correlation is a concern. For instance, it will show if the pixels in a watermark are highlighted or if the pixels in an actual tumor are highlighted,” says Zhou.

A second type of explanation method is known as a counterfactual explanation. Given an input and a model’s prediction, these methods show how to change that input so it falls into another class. For instance, if a machine-learning model predicts that a borrower would be denied a loan, the counterfactual explanation shows what factors need to change so her loan application is accepted. Perhaps her credit score or income, both features used in the model’s prediction, need to be higher for her to be approved.

“The good thing about this explanation method is it tells you exactly how you need to change the input to flip the decision, which could have practical usage. For someone who is applying for a mortgage and didn’t get it, this explanation would tell them what they need to do to achieve their desired outcome,” he says.

The third category of explanation methods are known as sample importance explanations. Unlike the others, this method requires access to the data that were used to train the model.

A sample importance explanation will show which training sample a model relied on most when it made a specific prediction; ideally, this is the most similar sample to the input data. This type of explanation is particularly useful if one observes a seemingly irrational prediction. There may have been a data entry error that affected a particular sample that was used to train the model. With this knowledge, one could fix that sample and retrain the model to improve its accuracy.


How are Explanation Methods Used?

One motivation for developing these explanations is to perform quality assurance and debug the model. With more understanding of how features impact a model’s decision, for instance, one could identify that a model is working incorrectly and intervene to fix the problem, or toss the model out and start over.

Another, more recent, area of research is exploring the use of machine-learning models to discover scientific patterns that humans haven’t uncovered before. For instance, a cancer diagnosing model that outperforms clinicians could be faulty, or it could actually be picking up on some hidden patterns in an X-ray image that represent an early pathological pathway for cancer that were either unknown to human doctors or thought to be irrelevant, Zhou says.

It’s still very early days for that area of research, however.

 

Words of Warning

While explanation methods can sometimes be useful for machine-learning practitioners when they are trying to catch bugs in their models or understand the inner-workings of a system, end-users should proceed with caution when trying to use them in practice, says Marzyeh Ghassemi, an assistant professor and head of the Healthy ML Group in CSAIL.

As machine learning has been adopted in more disciplines, from health care to education, explanation methods are being used to help decision makers better understand a model’s predictions so they know when to trust the model and use its guidance in practice. But Ghassemi warns against using these methods in that way.

“We have found that explanations make people, both experts and nonexperts, overconfident in the ability or the advice of a specific recommendation system. I think it is very important for humans not to turn off that internal circuitry asking, ‘let me question the advice that I am given,’” she says.

Scientists know explanations make people over-confident based on other recent work, she adds, citing some recent studies by Microsoft researchers.

Far from a silver bullet, explanation methods have their share of problems. For one, Ghassemi’s recent research has shown that explanation methods can perpetuate biases and lead to worse outcomes for people from disadvantaged groups.

Another pitfall of explanation methods is that it is often impossible to tell if the explanation method is correct in the first place. One would need to compare the explanations to the actual model, but since the user doesn’t know how the model works, this is circular logic, Zhou says.

He and other researchers are working on improving explanation methods so they are more faithful to the actual model’s predictions, but Zhou cautions that, even the best explanation should be taken with a grain of salt.

“In addition, people generally perceive these models to be human-like decision makers, and we are prone to overgeneralization. We need to calm people down and hold them back to really make sure that the generalized model understanding they build from these local explanations are balanced,” he adds.

Zhou’s most recent research seeks to do just that.

 

What’s Next for Machine-Learning Explanation Methods?

Rather than focusing on providing explanations, Ghassemi argues that more effort needs to be done by the research community to study how information is presented to decision makers so they understand it, and more regulation needs to be put in place to ensure machine-learning models are used responsibly in practice. Better explanation methods alone aren’t the answer.

“I have been excited to see that there is a lot more recognition, even in industry, that we can’t just take this information and make a pretty dashboard and assume people will perform better with that. You need to have measurable improvements in action, and I’m hoping that leads to real guidelines about improving the way we display information in these deeply technical fields, like medicine,” she says.

And in addition to new work focused on improving explanations, Zhou expects to see more research related to explanation methods for specific use cases, such as model debugging, scientific discovery, fairness auditing, and safety assurance. By identifying fine-grained characteristics of explanation methods and the requirements of different use cases, researchers could establish a theory that would match explanations with specific scenarios, which could help overcome some of the pitfalls that come from using them in real-world scenarios.

Reprinted with permission from MIT News ( http://news.mit.edu/)

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Vera Bradley (VRA) – CEO Change and Cost Initiatives Update

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Monday, July 25, 2022

Vera Bradley (VRA)
CEO Change and Cost Initiatives Update

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

A Transition. Vera Bradley announced Thursday the retirement of long-time President and CEO Robert Wallstrom. Mr. Wallstrom will remain in the position until a successor is named, which is expected by the beginning of 2023, and will work with the board of directors in the search. The search will consider both internal and external candidates, with a focus on a CEO to continue the Company’s focus on building consistent, sustainable growth over the long-term for the Vera Bradley and Pura Vida businesses.

Cost Initiatives Update. The Company also provided an update to the cost reduction initiatives, announced in the first quarter earnings call. Management has identified annualized cost reductions totaling approximately $25 million, at the high end of the $15-$25 million forecasted range. A portion of the savings are expected to be realized this fiscal year and will be fully implemented in the fiscal year ending February 2024….

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Release – Entravision Schedules Second Quarter 2022 Earnings Release and Conference Call

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Entravision Schedules Second Quarter 2022 Earnings Release and Conference Call

Research, News, and Market Data on Entravision

SANTA MONICA, Calif.–(BUSINESS WIRE)– Entravision (NYSE: EVC), a leading global advertising solutions, media and technology company, announced that it will release its second quarter 2022 financial results after market close on Wednesday, August 3, 2022. The Company will host a conference call that day at 5:00 p.m. Eastern Time to discuss the second quarter 2022 results.

To access the conference call, please dial (877) 407-9716 (U.S.) or (201) 493-6779 (International) ten minutes prior to the start time. The call will also be available via live webcast on the investor relations portion of the Company’s website located at www.entravision.com.

If you cannot listen to the conference call at its scheduled time, there will be a replay available through Wednesday, August 17, 2022 which can be accessed by dialing (844) 512-2921 (U.S.) or (412) 317-6671 (International) and entering the passcode 13730294. The webcast will also be archived on the Company’s website.

About Entravision

Entravision is a leading global advertising, media and ad-tech solutions company connecting brands to consumers by representing top platforms and publishers. Our dynamic portfolio includes digital, television and audio offerings. Digital, our largest revenue segment, is comprised of four business units: our digital sales representation business; Smadex, our programmatic ad purchasing platform; our branding and mobile performance solutions business; and our digital audio business. Through our digital sales representation business, we connect global media companies such as Meta, Twitter, TikTok and Spotify with advertisers in primarily emerging growth markets worldwide. Smadex is our mobile-first demand side platform, enabling advertisers to execute performance campaigns using machine learning. We also offer a branding and mobile performance solutions business, which provides managed services to advertisers looking to connect with global consumers, primarily on mobile devices, and our digital audio business provides digital audio advertising solutions for advertisers in the Americas. In addition to digital, Entravision has 49 television stations and is the largest affiliate group of the Univision and UniMás television networks. Entravision also manages 46 primarily Spanish-language radio stations that feature nationally recognized, Emmy award-winning talent. Shares of Entravision Class A Common Stock trade on the NYSE under ticker: EVC. Learn more about our offerings at entravision.com or connect with us on 
LinkedIn and Facebook.

View source version on 
businesswire.com: https://www.businesswire.com/news/home/20220722005440/en/

Christopher T. Young
Chief Financial Officer
Entravision

310-447-3870

Kimberly Esterkin
Addo Investor Relations
310-829-5400

evc@addo.com

Source: Entravision


Release – Kratos Awarded $54M Task Order to Develop a Low Cost, Limited Life Engine for Attritable and Expendable Systems

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Kratos Awarded $54M Task Order to Develop a Low Cost, Limited Life Engine for Attritable and Expendable Systems

Research, News, and Market Data on Kratos Defense & Security Solutions

SAN DIEGO, 
July 25, 2022 (GLOBE NEWSWIRE) — 
Kratos Defense & Security Solutions, Inc. (Nasdaq: KTOS), a leading National Security Solutions provider, announced today that Kratos Turbine Technologies (KTT) Division has been awarded a task order contract to develop a low cost, limited life engine for attritable and expendable systems. The contract is part of the 
Air Force Research Laboratory, 
Aerospace Systems Directorate, Turbine Engine Division (AFRL/RQT), Attritable Cost Optimized Limited Life Engine Technologies (ACOLLET) program. Under prior and existing contracts, KTT has completed component rig and core engine testing and has recently begun full engine ground testing. The initial, 
$6.8M, effort will focus on key component testing and engine optimization trade studies to validate the capabilities the engine can bring to future systems. Additional, unfunded, options are available to complete the engine design and testing for future flight demonstrations. The work will be performed by KTT in 
Florida.

KTT’s Attritable and Expendable Turbofan Engine

KTT’s Attritable and Expendable Turbofan Engine

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/1c7b82ca-7df7-4034-99de-75990b2072c7

Stacey Rock, President of Kratos Turbine Technologies Division, said, “The new contract allows KTT to continue the great working relationship with AFRL’s Turbine Engine Division to bring disruptive engine technology to the warfighter. Both parties are focused on increasing system mission capability, while providing engines at a lower cost. All of Kratos is focused on supporting 
the United States warfighter and industrial base, including making significant investments in the development and production of next generation engines and supporting STEM opportunities in the 
USA. We look forward to continuing to support the AFRL in the development of transformative and affordable turbine engine technologies.”

About Kratos
Defense & Security Solutions
Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) develops and fields transformative, affordable technology, platforms and systems for United States National Security related customers, allies and commercial enterprises. Kratos is changing the way breakthrough technology for these industries are rapidly brought to market through proven commercial and venture capital backed approaches, including proactive research and streamlined development processes. At Kratos, affordability is a technology and we specialize in unmanned systems, satellite communications, cyber security/warfare, microwave electronics, missile defense, hypersonic systems, training, combat systems and next generation turbo jet and turbo fan engine development. For more information go to 
www.KratosDefense.com.

Notice Regarding Forward-Looking Statements
Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made on the basis of the current beliefs, expectations and assumptions of the management of Kratos and are subject to significant risks and uncertainty. Investors are cautioned not to place undue reliance on any such forward-looking statements. All such forward-looking statements speak only as of the date they are made, and Kratos undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise. Although Kratos believes that the expectations reflected in these forward-looking statements are reasonable, these statements involve many risks and uncertainties that may cause actual results to differ materially from what may be expressed or implied in these forward-looking statements. For a further discussion of risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of Kratos in general, see the risk disclosures in the Annual Report on Form 10-K of Kratos for the year ended 
December 26, 2021, and in subsequent reports on Forms 10-Q and 8-K and other filings made with the 
SEC by Kratos.

Press Contact: Yolanda White 858-812-7302 Direct

Investor Information:
877-934-4687

investor@kratosdefense.com


Primary Logo

KTT’s Attritable and
Expendable Turbofan Engine

A picture containing indoor Description automatically generated 

KTT’s Attritable and
Expendable Turbofan Engine

Source: Kratos Defense & Security Solutions, Inc.


Regulatory Implications of the SEC Coinbase Insider Trading Case

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Image Credit: Ivan Radic (Flickr)


The New Coinbase Insider Trading Case May Finally Define Crypto Tokens

Whether cryptocurrency tokens are securities or should be treated as securities by regulators is being tested yet again. This time a Coinbase (COIN) employee and two others are being charged with insider trading by the Securities and Exchange Commission (SEC). The outcome of this legal disagreement could have industry-changing ramifications for the crypto industry.

 

Details
of Case

In a press release last week, the SEC alleged that, while employed at Coinbase, Ishan Wahi helped to coordinate the platform’s public listing announcements that included what crypto assets or tokens would be made available for trading. According to the SEC’s complaint, Coinbase treated such information as confidential and warned its employees not to trade on the basis of, or tip others with, that information. However, from at least June 2021 to April 2022, in breach of his duties, Ishan repeatedly tipped off the timing and content of upcoming listing announcements to his brother, Nikhil Wahi, and his friend, Sameer Ramani. Ahead of those announcements, this usually resulted in an increase in the assets’ prices. Nikhil Wahi and Ramani allegedly purchased at least 25 crypto assets, at least nine of which were “securities,” and then typically sold them shortly after the announcements for a profit. The long-running insider trading scheme generated profits totaling more than $1.1 million.

The tokens in question would be considered outside of the Securities and Exchange Commission’s jurisdiction if they are not securities. The SEC alleges that they fall within that classification.

The chief legal officer at Coinbase, Paul Grewal, issued a statement in response where he said, “Seven of the nine assets included in the SEC’s charges are listed on Coinbase’s platform. None of these assets are securities. Coinbase has a rigorous process to analyze and review each digital asset before making it available on our exchange — a process that the SEC itself has reviewed. This process includes an analysis of whether the asset could be considered to be a security and also considers regulatory compliance and information security aspects of the asset. To be explicit, the majority of assets that we review are not ultimately listed on Coinbase.”

Grewal’s statement says these charges put a “spotlight on an important problem: the US doesn’t have a clear or workable regulatory framework for digital asset securities.” He continued, “And instead of crafting tailored rules in an inclusive and transparent way, the SEC is relying on these types of one-off enforcement actions to try to bring all digital assets into its jurisdiction, even those assets that are not securities.”

“Coinbase does not list securities. End of story” wrote the chief legal officer.

Struggle to Define

The question of whether tokens should be classified as currencies, commodities, or securities has created a cloud of uncertainty over the industry. According to the SEC, some tokens most likely meet the definition of a security.

One legal battle involving the SEC is the payments network Ripple’s token (XRP.X). According to the SEC, the payments token is a security. Ripple Labs and the Commission are engaged in a legal battle over the distinction.

Bitcoin (BTC.X), according to SEC Chairman Gensler, is a commodity.

The definitions help compartmentalize the assets. If the crypto tokens are not securities, then the SEC isn’t likely under its current mandates to have much jurisdiction over exchanges like Coinbase – then it wouldn’t be in a position to regulate the listing and trading of tokens.


Image: Tweet from Coinbase co-founder and CEO.

Coinbase does not support wrongdoing; according to management, however, they want a clear set of legal guidelines for their industry.

As part of a string of Twitter posts, CEO Brian Armstrong wrote, “we actively monitor for illegal activity and investigate any alleged misconduct.” The company launched an investigation in April after being tipped off about possible frontrunning, Armstrong said the company provided the names of three individuals to law enforcement and terminated an employee.

However, Coinbase intends to strongly dispute the SEC’s premise that some tokens on its platform are securities.

The SEC’s insider-trading case also seems to be at conflict with the beliefs of other regulators. CFTC Commissioner Caroline Pham said that the SEC’s move was an example of “regulation by enforcement.” The SEC’s allegations “could have broad implications beyond this single case,” she called on regulators to work more closely.


Take Away

On the road to defining and classifying digital tokens, the industry is likely to experience higher levels of regulatory scrutiny. The Department of Justice is beginning to get more involved in prosecuting crypto crime; the DOJ filed criminal charges in the Coinbase case, and it has filed insider trading charges against a former employee of the largest NFT platform, Opensea.  

The SEC has said it aims to beef up its crypto
enforcement. The Commission added 20 positions to its crypto asset and cyber unit in May, bringing its dedicated headcount to 50.

The outcome of defining the asset class and proper jurisdiction and rules surrounding cryptocurrency is a process. During the early stages of this process, investors in tokens tolerate an added level of uncertainty surrounding the outcomes.

Paul Hoffman

Managing Editor, Channelchek

Suggested Content



SEC Announces Crypto Assets and Cyber Unit Will Double in Size

SEC Investigates Digital Engagement Practices in Broker Apps




Has the Crypto Crunch Accelerated SEC Plans to Regulate the Market?

What Might be in a Portfolio Allocated for a Republican Majority in the House?


Sources

https://www.sec.gov/news/press-release/2022-127

https://blog.coinbase.com/coinbase-does-not-list-securities-end-of-story-e58dc873be79

https://twitter.com/CarolineDPham/status/1550159347984044033/photo/1

https://www.breakingviews.com/considered-view/bidens-sec-pick-is-ominous-sign-for-wall-st/

https://www.reuters.com/legal/government/gary-gensler-has-set-sec-perilous-path-2022-07-22/

https://www.barrons.com/articles/sec-says-ripple-improperly-sold-cryptocurrency-51608675654?mod=article_inline

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Release – CoreCivic Announces 2022 Second Quarter Earnings Release and Conference Call Dates

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CoreCivic Announces 2022 Second Quarter Earnings Release and Conference Call Dates

Research, News, and Market Data on CoreCivic

BRENTWOOD, Tenn., July 25, 2022 (GLOBE NEWSWIRE) — CoreCivic, Inc. (NYSE: CXW) (the Company) announced today that it will release its 2022 second quarter financial results after the market closes on Tuesday, August 2, 2022.

A live broadcast of CoreCivic’s conference call will begin at 10:00 a.m. central time (11:00 a.m. eastern time) on Wednesday, August 3, 2022, and will be accessible through the Company’s website at www.corecivic.com under the “Events & Presentations” section of the “Investors” page. The live broadcast can also be accessed by dialing 888-221-3881 in the U.S. and Canada, including the confirmation passcode 8733680. An online replay of the call will be archived on our website promptly following the conference call. In addition, there will be a telephonic replay available beginning at 1:15 p.m. central time (2:15 p.m. eastern time) on August 3, 2022, through 1:15 p.m. central time (2:15 p.m. eastern time) on August 11, 2022. To access the telephonic replay, dial 888-203-1112 in the U.S. and Canada. International callers may dial +1 719-457-0820 and enter passcode 8733680.

About CoreCivic

CoreCivic is a diversified, government-solutions company with the scale and experience needed to solve tough government challenges in flexible, cost-effective ways. We provide a broad range of solutions to government partners that serve the public good through high-quality corrections and detention management, a network of residential and non-residential alternatives to incarceration to help address America’s recidivism crisis, and government real estate solutions. We are the nation’s largest owner of partnership correctional, detention and residential reentry facilities, and believe we are the largest private owner of real estate used by government agencies in the United States. We have been a flexible and dependable partner for government for nearly 40 years. Our employees are driven by a deep sense of service, high standards of professionalism and a responsibility to help government better the public good. Learn more at www.corecivic.com.

Contact:

Investors: Cameron Hopewell – Managing Director, Investor Relations – (615) 263-3024
Media: Steve Owen – Vice President, Communications – (615) 263-3107

 


Noble Capital Markets Media Sector Review – Q2 2022

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Noble Capital Markets Media Sector Review – Q2 2022


INTERNET AND DIGITAL MEDIA COMMENTARY

A Third Consecutive Quarter of Declines for Internet and Digital Media Stocks

Last quarter we wrote that despite performing well overall in 2021, Internet and Digital Media stocks performed poorly in the fourth quarter of 2021 and again in the first quarter of 2022. Unfortunately, that trend continued in the second quarter of 2022. None of Noble’s Internet and Digital Media Indices outperformed the broader market, which we define as the S&P 500. The S&P 500 Index decreased by 16% in 2Q 2022, which was better than Noble’s Digital Media Index (-24%), MarTech Index (-28%), Esports & iGaming Index (-29%), Social Media Index (-30%), and AdTech Index (-39%).

The theme from last quarter was that high flying stocks got “their wings clipped”, in which we noted that the tech stocks with the highest multiples were the worst performers in the sector. What’s interesting to note this quarter is that not even the FAANG stocks were immune to this trend in 2Q 2022. Last quarter, only two of the FAANG stocks posted double digit declines. This quarter, all of them did: Google (GOOGL) was down 22%, Apple (AAPL) was down 22%, Facebook was down 27%, Amazon was down 35%, and Netflix was down 53%).

It is not surprising that AdTech stocks were the worst performers in 2Q 2002. Advertising spend is a discretionary expenditure and with the backdrop of macro headwinds that include inflation, rising interest rates, war in Ukraine and supply chain issues, investors decided to shoot first and ask questions later. We believe advertising held up well in the months of April and May but began to see a slowdown, particularly in national advertising, in June. Standard Media Index, which tracks national advertising across all media, reported that national ad spending in June decreased by 3% year-over-year, the first year-over-year decline in national ad spend since February 2021 (see the chart on the top of page 2). Again, online advertising held up relatively well, with traditional media ad spend down 17%, while digital ad spending increased 9%.

NOBLE Capital Markets, Inc. is a FINRA registered broker/dealer. Member – SIPC (Securities Investor Protection Corporation). Refer to the segment analysis part of the Newsletter to see the components of NOBLE Media Segment Indexes

Nevertheless, recent data suggests that online ad spending growth has slowed, which was confirmed by SNAP’s second quarter earnings call in which they noted that company’s revenue growth decreased from 38% in 1Q to 13% in 2Q. More concerning was that the company’s 3Q revenues are pacing flat with a year ago. Twitter’s (TWTR) 2Q results seem to have confirmed the ad spend slowdown. Twitter’s 16% revenue growth in 1Q slowed to -1% in 2Q. Twitter’s press release also noted the impact that a stronger dollar had on its revenue growth. A stronger dollar shaved 400 bps off Twitter’s 2Q revenue growth.

Perhaps more concerning for Snap and Twitter was that expense growth significantly exceeded revenue growth. Snap’s operating expenses increased by 27% resulting in a 94% decrease in adjusted EBITDA (to $7M from $117M in 2Q 2021) as margins fell from 12% in 2Q 2021 to 1% in 2Q 2022. Twitter’s results were little better: expenses increased by 26%, resulting in an adjusted EBITDA decrease of 68% (to $112M from $343M in 2Q 2021) as margins fell to 10% from 29% in 2Q 2021.

We expect more companies to report moderating revenue growth and those that rein in expense growth ought to outperform those that face significant margin compression.

2Q 2022 M&A Holds Up Well Despite Macro Headwinds

One might expect that given the very difficult macro headwinds that companies faced in the second quarter, that deal activity would have fallen off dramatically relative to the first quarter or the year ago period. However, this did not happen, and M&A held up well in the second quarter. We tracked 169 deals in the second quarter of 2022 in the TMT sectors we follow, a 5% decrease compared to the first quarter of 2022, when we tracked 177 deals, and 10% higher than 2Q 2021, when we tracked 153 transactions. We also did not see a material slowdown in deal activity within the second quarter, but rather the opposite: a pick-up in deal activity, with 49 deals announced in April, 57 in May and 63 in June. This is fairly unusual as macro headwinds typically create uncertainty, particularly with future forecasts, which tends to have a dampening effect on M&A transactions.

The dollar value of the deals we tracked in 2Q 2022 decreased sequentially (by 14% to $93.6 billion, down from $108.4 billion in 1Q 2022), but increased year-over-year (by 185% from $32.9 billion in 2Q 2021). The deal value for 2Q 2022 should come with a caveat, as the largest deal in 2Q 2022 was Elon Musk’s $46 billion acquisition of Twitter, which he subsequently backed out of. There is a chance that Mr. Musk could be forced to close on this acquisition, depending upon a judge’s decision. If we take the largest 2Q 2022 deal out of the numbers, then 2Q 2022 deal value would have fallen by 56% sequentially but still be up 43% versus the year ago period.

From a deal volume perspective, the most active sectors we tracked were Marketing Tech (49 deals), Digital Content (43 deals) and Agency & Analytics (32 deals). From a deal value perspective, the most active sectors were Social Media ($48.5B including the Twitter deal or $2.1B if you exclude it), Digital Content ($18.6B), Marketing Tech ($10.6B), and Information ($9.8B).

Of the $18.6B in announced transactions in the Digital Content sector, $15B of this amount was attributable to the video gaming subsector, with $15 billion of announced deals in the second quarter. The largest transaction was the $14.5B announced acquisition of serial acquirer Enbracer Group by Savvy Gaming Group, which is backed by the Public Investment Fund of Saudi Arabia. A look at the largest Gaming M&A transactions of 2Q 2022 is provided in the chart below.

On the other end of the spectrum, there were surprisingly few M&A transactions in the AdTech sector, with just 4 announced transactions, down from 15 in the first quarter of 2022. Deal value also fell dramatcially, from $1.5B in the first quarter of 2022 to just $100 million in the second quarter.

Another hot sector that has come off the boil is the podcasting space. During the second quarter of 2022, the only notable M&A transaction in podcasting was SiriusXM’s $150 million acquisition of Team Coco Digital. Despite a lack of podcast M&A transactions, audio remained a key area of focus in M&A. Examples include the reverse merger between the SPAC I2PO Societe anonyme and streaming audio company Deezer for $1.2 billion. Audio focused transactions also include Spotify’s acquisition of AI voice generation company Sonantic Ltd., and SouncCloud’s acquisition of AI enabled hit prediction software company Musiio.

We expect M&A in the Internet and Digital Media sector to moderate in the coming months given macroeconomic headwinds and the accompanying increased uncertainty around financial forecasts.

Esports & iGaming

The following is an excerpt from a recent note by Noble’s Media Equity Research Analyst Michael Kupinski

What Will The Industry Look Like? 

Once the darlings of Wall Street the industry has taken a meaningful turn as investors shun developmental industries, like Esports. Many companies in this sector are in survival mode, shuttering money losing operations, seeking alternative financing options, and/or selling off assets. Companies that Noble provides equity research coverage on include Esports Entertainment, Engine Media and Motorsport Games. In the case of Esports Entertainment, the shares are down 92% over the past year. Motorsport Games is down 95%, and, Engine Media is down 81% in the comparable time frame.

Notably, each of those companies has a potential path to survive and create value to shareholders. In the case of Esports, there are assets that the company could sell, which generate cash flow. The risk is that it may not be able to sell them for what the company paid for them. Engine Media seems to be on a more favorable path at this point. The company quickly sold off assets and shuttered money losing businesses. As such, the company appears to have a pathway toward cash flow break even, expected by the third quarter.

We view the GAME shares as a high risk/high reward prospect. Motorsport Games appears to us to be the most intriguing speculative investment. The company has multiple pathways to create value. It could time its game releases to generate positive cash flow, which it can then use to invest in launching additional games. In addition, it could seek financing from its parent company to fund its game development through launch. As such, Motorsport is among our favored speculative investment in the space.

Finally, we recommend the shares of Codere Online Luxembourg in the iGaming space. The company has cash to develop its iGaming business in developing countries. It could back off of the development should market conditions change. As such, we believe that the company will survive and possibly become a leader in its respective markets as companies with less financial flexibility exit markets.

TRADITIONAL MEDIA COMMENTARY

The following is an excerpt from a recent note by Noble’s Media Equity Research Analyst Michael Kupinski

Overview

How Bad Will It Be? 

The advertising recession may already be here. Based on Standard Media Index’s U.S. Ad Market Tracker (Ad Tracker), the U.S. advertising market contracted 3% in June, illustrated by Figure #1 Ad Trends. This was the first decline in the Index since February 2021. Notably, the contraction in advertising was felt by traditional media, which declined 16.6%, while Digital Media increased 8.6% in June. A bifurcated market? The advertising decline was among the U.S. largest, top 10 advertisers. Ad Tracker indicated that the other categories expanded a modest 1.2% in June. What does the data tell us? For one, economically sensitive National advertisers are anticipating a general economic downturn given a rising interest rate environment. National advertising was very weak, down in excess of 20% for most traditional mediums. In our view, advertising weakness will disproportionately be felt in the major U.S. markets where the economy is largely impacted. It is possible that local advertising may still growing, albeit modestly and more likely in smaller markets. Traditional mediums with a large digital component likely will perform better, if not well, compared with industry peers. We believe that advertising pacings in July are likely to be similar to that of the weak advertising environment in June, driven by continued weak National advertising.

The media stocks seem to have already anticipated the somber news. Media stocks as a group over the past 12 months are down 30% to 40%, significantly under performing the general market decline of 20.4% as measured by the S&P 500 Index in the comparable time frame. While Digital fundamentals appear more favorable, the digital stocks did not fare well. The average Digital Media stock, which includes Digital Ad Tech, is down 35% over the past 12 months.

Are the stocks oversold? We think so. In our view, while second quarter results may miss expectations, given the softness in advertising in June, we believe that the results may be better than most investors fear. Most companies guided toward a softer second quarter from the first quarter. As such, most investors expected moderation in revenue in the quarter. With the 30% to 40% decline in stocks over the past year, we believe that investors have factored in a severe economic downturn. The second quarter advertising environment does not appear to reflect that type of situation. While the third quarter is likely to start off weak, a follow through from June into July and August, we believe that advertising should improve in August. Media fundamentals in the second half of the year should be buoyed by the influx of Political advertising, which has already begun in some markets. In addition, Digital advertising appears to be doing well. And, to some degree, advertisers may be pushing budgets toward the important Holiday season. Macro economic trends may even force advertisers to advertise more heavily into back to school and the important Holiday seasons. In addition, the Fed typically is not as aggressive in raising rates in advance of elections.

It is possible that the Fed will read the recent economic weakness as a signal to be less aggressive on rate increases. Such a move would buoy the general stock market, in our view. Consequently, there may even be an improvement in advertising toward the end of the third quarter and into the fourth quarter. This scenario would suggest that there could be a tradeable bounce in media stocks.

What should investors do? In our view, media investors should take an accumulation approach. Historically, the best time to buy media stocks has been in the midst of an economic downturn. The mid-point of that downturn is difficult to predict. As such, investors should be selective and take an accumulation approach. We encourage investors to focus on companies that have large digital segments, have diversified revenue streams that are not advertising sensitive, and on companies that have the financial capability to weather an economic downturn. Some of our favorites include: Entravision (EVC), E.W. Scripps (SSP), and Townsquare Media (TSQ). Additional companies are highlighted later in this report.  7

Broadcast Television

Will Television Fare Better This Time?

As a group, Broadcast TV stocks dropped 22.6% in Q2, in what was a reversal from Q1 when the industry climbed a solid 10%. It appears the broad economic implications of prolonged supply chain disruptions, rising inflation, and concerns over an economic downturn in a rising interest rate environment curbed investor appetite. Larger cap stocks, such as Nexstar (NXST) performed better, down 14%, while the shares of E.W. Scripps (SSP) underperformed, down 40%, in the latest quarter. It is not surprising that the stocks are underperforming, but the level of decline is notable. It is typical that advertising driven media stocks underperform in a rising interest rate environment due to the adverse impact on economically sensitive advertising. But, television has diversified revenue streams, with retransmission revenue accounting for a large portion of revenue. We believe that investors have not differentiated among the TV stocks. In the case of E.W. Scripps, the company is expected to benefit from strong political advertising in the second half of this year. In addition, 75% of its subscribers in 2023 come up for renewal. Some of those subscribers are at very low rates. Based on our estimates, roughly 2.5 million Comcast subscribers are at $2.20 per sub. Based on current market prices, we expect Scripp’s rates will rise comfortably above $3.00 per sub. We believe that the high margin political advertising and the lift from retrans next year will allow the company to pare down debt leverage, which appears to be a key concern for investors.

But, one stock stands out to us, Entravision. This company has completely transformed from a traditional broadcast company to a Digital Media powerhouse. Digital now represents roughly 80% of total company revenues. While it is lower margin business, it is rapidly growing. The company represents Facebook, Spotify and TikTok is some of the fastest growing markets. Notably, the company recently announced that it has expanded its relationship with Meta to be the Facebook rep in Honduras and El Salvador, now representing 11 countries in Latin America. We believe that the company will report better than consensus estimates for the second quarter and recently raised our full year 2022 adj. EBITDA expectations. With the shares trading slightly above 4 times cash flow, we believe that there is limited downside risk and a favorable risk/reward relationship.

Broadcast Radio

All Is Not Lost

Similar to the TV industry, radio stocks reversed course in Q2, falling 34% after modest 2% gains in Q1. While all media stocks struggled in the latest quarter, none have performed more poorly than the Radio sector. Noble’s Radio index is down 63% over the past 12 months, as shown in the chart at the bottom of page 13. This market cap weighted index reflected the performance of the largest cap companies, including Audacy and iHeart Media, which are down 81% and 69%, respectively. Much of the pain in those stocks was delivered in the latest quarter, with Audacy down 67% and iHeart down 58%. Both of those stocks were adversely affected by a downgrade by a Wall Street firm, given the unfavorable outlook for national advertising, and relatively high debt leverage, heading into a possible economic downturn. As investors shunned radio stocks, they did not appear to differentiate among the players in the industry. Outside of Audacy and iHeart Media, the rest of the radio stocks did not fare well either. The rest of the radio stocks were in the range of down 22% (Cumulus Media) to down 27% (Beasley Broadcast) on the low end to down 36% (Townsquare Media) and down 37% (Salem Media) on the high end.

Investors should take note. Townsquare Media is largely a digital media company, with 51% of its revenues derived from its fast- growing digital media businesses. The company demonstrated that this business is largely recession resistant, growing revenues through the depths of the Covid pandemic. In addition, the company operates in small market radio, which tends not to suffer from the vagaries of the economic cycle. Salem Media is somewhat similar in that it has a diversified revenue stream as well. In addition, over 30% of its radio business is from a very stable block programming business. Finally, Beasley Broadcasting has recently bolstered its digital development with an acquisition that allows the company to scale its digital business. Management recently indicated that it plans for digital to account for 40% of its total company revenues in a short 2 years. Figure #10 Radio Comparables highlight the recession type valuations that many of the stocks currently trade.

DOWNLOAD THE FULL REPORT (PDF)

View the PDF version for segment analysis, M&A activity, and more…

Noble Capital Markets Media Newsletter Q2 2022

This newsletter was prepared and provided by Noble Capital Markets, Inc. For any questions and/or requests regarding this news letter, please contact >Chris Ensley

DISCLAIMER

All statements or opinions contained herein that include the words “ we”,“ or “ are solely the responsibility of NOBLE Capital Markets, Inc and do not necessarily reflect statements or opinions expressed by any person or party affiliated with companies mentioned in this report Any opinions expressed herein are subject to change without notice All information provided herein is based on public and non public information believed to be accurate and reliable, but is not necessarily complete and cannot be guaranteed No judgment is hereby expressed or should be implied as to the suitability of any security described herein for any specific investor or any specific investment portfolio The decision to undertake any investment regarding the security mentioned herein should be made by each reader of this publication based on their own appraisal of the implications and risks of such decision This publication is intended for information purposes only and shall not constitute an offer to buy/ sell or the solicitation of an offer to buy/sell any security mentioned in this report, nor shall there be any sale of the security herein in any state or domicile in which said offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or domicile This publication and all information, comments, statements or opinions contained or expressed herein are applicable only as of the date of this publication and subject to change without prior notice Past performance is not indicative of future results.

Please refer to the above PDF for a complete list of disclaimers pertaining to this newsletter

MustGrow Biologics Corp. (MGROF) – Canada Distribution

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Monday, July 25, 2022

MustGrow Biologics Corp. (MGROF)
Canada Distribution

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

A New Distributor. On Wednesday, MustGrow’s management announced the Company has reached an exclusive marketing and distribution agreement in the Canadian canola and pulse market for TerraMG with NexusBioAg. The agreement allows the companies to move forward to the next stage of the development process. Financial details of the agreement were not disclosed.

Potential Market?  In the Canadian market, it has been estimated farmers suffer a CAD$500 million economic loss on the Canola crop due to clubroot and a CAD$100 million economic loss in Pulse crops (peas, lentils, legumes, etc.) due to  aphanomyces. …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

RCI Hospitality Holdings (RICK) – Another Club Acquisition

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Monday, July 25, 2022

RCI Hospitality Holdings (RICK)
Another Club Acquisition

With more than 50 units, RCI Hospitality Holdings, Inc., through its subsidiaries, is the country’s leading company in gentlemen’s clubs and sports bars/restaurants. Clubs in New York City, Chicago, Dallas-Fort Worth, Houston, Miami, Minneapolis, Denver, St. Louis, Charlotte, Pittsburgh, Raleigh, Louisville, and other markets operate under brand names such as Rick’s Cabaret, XTC, Club Onyx, Vivid Cabaret, Jaguars Club, Tootsie’s Cabaret, and Scarlett’s Cabaret. Sports bars/restaurants operate under the brand name Bombshells Restaurant & Bar.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Acquisition. Last Friday, RCI announced closing on purchase agreements that will enable the Company to open a third adult nightclub in the Odessa, TX area. The new club will be RCI’s third in the area, complimenting the existing Rick’s Cabaret Odessa and Jaguar’s Club Odessa. To be called PT’s Showclub, the new location will offer adult entertainment and liquor service and is expected to appeal to a different demographic from the existing clubs.

Details. RCI paid $1.8 million in cash and seller financing for the club’s assets, including all necessary licenses, and for the 5,180 square foot building and one acre property. The property was the former home of a couple of other adult nightclubs. Although financial details were not provided outside of the acquisition cost, other properties in the area are listed in the $70-$80 per sq/ft range, according to LoopNet, suggesting a potential cost of the property in the $400,000 range, leaving $1.4 million for the business. At management’s normal 3-5x EBITDA acquisition target, this would suggest expected annual EBITDA contribution in the $400,000 range. The club should begin contributing to results by the end of September….

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Reseach – Comtech Names Ken Peterman Chairman of the Board

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Comtech Names Ken Peterman Chairman of the Board

Research, News, and Market Data on Comtech Telecommunications

Fred Kornberg to retire following 50 years of
service

MELVILLE, N.Y.
–(BUSINESS WIRE)–Jul. 25, 2022– 
Comtech Telecommunications Corp. (NASDAQ: CMTL) announced today that it has elected current independent director  Ken Peterman  as Chairman of the Board, effective 
July 22, 2022.  Mr. Peterman will succeed  Fred Kornberg , who is retiring as Chairman.  Mr. Kornberg  will also not stand for re-election to the Board and will step down as a director immediately preceding the next annual shareholder meeting.

“As Comtech gets ready to start its fiscal 2023, the full Board is delighted that Ken will step into the Chairman role,” said  Judy Chambers , Chairperson of Comtech’s 
Nominating and Governance Committee of the Board. “Ken has shown himself to be a highly capable successor, who can help guide the Company as it continues to transform itself and build upon its leadership positions in key areas of the 
Failsafe Communications
 market.”

“It’s an honor to have been elected Chairman by this Board,” noted  Ken Peterman . “I’m extremely excited about Comtech’s potential, and genuinely appreciate the legacy of hard work, innovation and customer focus that Fred established. I look forward to helping President and CEO  Mike Porcelain  and the rest of the Board build on Comtech’s strong foundation to create long-term shareholder value.”

“It’s been a true privilege to have led 
Comtech through so many different eras,” said  Mr. Kornberg . “I know I leave the Company in excellent hands, with both Mike and Ken at the helm, as 
Comtech enters its next chapter of growth and success.”

Mike Porcelain  added, “It goes without saying that we’re all deeply grateful for Fred Kornberg’s contributions to the Company. With over 50 years of service to 
Comtech, Fred’s retirement is well-earned, and I speak for both the Board and everyone at 
Comtech when I say we wish him well.”

In connection with Mr. Kornberg’s full retirement, 
Comtech is announcing that it will reduce the size of its Board to eight members, seven of whom will be independent. This reduction will take place immediately preceding the next annual shareholder meeting.

Mr. Peterman  joined the Comtech Board in 
May 2022
, following an accomplished career that spanned over forty years in the defense sector, earning credentials across a wide array of markets and both commercial and government satellite systems at companies, including Viasat, ITT/
Exelis, 
Collins Aerospace
, 
Raytheon and SpyGlass Group.

Mr. Kornberg  was CEO and President of 
Comtech from 1976 to 2021 and has been a director of the company since 1971. He was the Executive Vice President of the company from 1971 to 1976 and the General Manager of the telecommunications transmission segment.

About Comtech

Comtech Telecommunications Corp. is a leading global provider of next-generation 911 emergency systems and secure wireless communications technologies to commercial and government customers around the world. Headquartered in 
Melville, New York and with a passion for customer success, 
Comtech designs, produces and markets advanced and secure wireless solutions. For more information, please visit www.comtech.com.

Forward-Looking Statements
Certain information in this press release contains statements that are forward-looking in nature and involve certain significant risks and uncertainties. Actual results could differ materially from such forward-looking information. The Company’s 
Securities and Exchange Commission filings identify many such risks and uncertainties. Any forward-looking information in this press release is qualified in its entirety by the risks and uncertainties described in such 
Securities and Exchange Commission filings.

PCMTL

Investor Relations

Robert Samuels
robert.samuels@comtech.com
(631) 962-7102

Source: 
Comtech Telecommunications Corp.