Tokens.com Corp is a publicly traded company that invests in Web3 assets and businesses focused on the Metaverse, NFTs, DeFi, and gaming based digital assets. Tokens.com is the majority owner of Metaverse Group, one of the world’s first virtual real estate companies. Hulk Labs, a wholly-owned Tokens.com subsidiary, focuses on investing in play-to-earn revenue generating gaming tokens and NFTs. Additionally, Tokens.com owns and stakes crypto assets to earn additional tokens. Through its growing digital assets and NFTs, Tokens.com provides public market investors with a simple and secure way to gain exposure to Web3.
Joe Gomes, Managing Director – Generalist Analyst, Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
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First Quarter Results. Total revenue for the quarter was at $151,848, an increase from the prior quarter of $101,235. We will be comparing quarters as Tokens.com has two new revenue streams, leasing and gaming revenue, which both did not occur last year. We estimated revenue at $105,000. Operating loss for Tokens.com was $566,525 versus $879,430 last quarter, and net loss was at $1.7 million, or EPS loss of $0.02, versus the prior quarter loss of $1.8 million, or a $0.02/sh loss.
Market Appreciation. The overall cryptocurrency market has seen an increase in total market cap over the last three months, as total market cap has risen to $1.05 trillion from $843.3 billion on November 15, 2022. This is an increase of $206.1 billion or 24.4%. If sustained, the rebound in the cryptocurrency market will be a positive for Tokens.com, in our view.
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*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.
Haynes International, Inc. is a leading developer, manufacturer and marketer of technologically advanced, nickel and cobalt-based high-performance alloys, primarily for use in the aerospace, industrial gas turbine and chemical processing industries.
Mark Reichman, Senior Research Analyst, Natural Resources, Noble Capital Markets, Inc.
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Initiating coverage with an Outperform rating. Haynes International, Inc., headquartered in Kokomo, Indiana, is one of the world’s largest developers, producers, and distributors of advanced high-performance nickel- and cobalt-based alloys. Haynes’ products, which are sold primarily to companies in the aerospace, chemical processing, and industrial gas turbine industries, consist of high-temperature resistant alloy (HTA) and corrosion-resistant alloy (CRA) products.
Track record of innovation. Founded in 1912, Haynes has a track record of pioneering many well-known nickel- and cobalt-based super alloys. In fiscal 2022, 59% of the company’s revenues were from alloys the company invented. Haynes currently has 20 published U.S. patents and applications. Approximately 27% of its product margin dollars were from proprietary alloys that no one else produces due to Haynes’ patent protection and/or processing technology and expertise. Since 2003, Haynes’ technical programs have yielded nine new proprietary alloys.
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Bowlero Corp. is the worldwide leader in bowling entertainment, media, and events. With more than 300 bowling centers across North America, Bowlero Corp. serves more than 26 million guests each year through a family of brands that includes Bowlero, Bowlmor Lanes, and AMF. In 2019, Bowlero Corp. acquired the Professional Bowlers Association, the major league of bowling, which boasts thousands of members and millions of fans across the globe. For more information on Bowlero Corp., please visit BowleroCorp.com.
Michael Kupinski, Director of Research, Noble Capital Markets, Inc.
Patrick McCann, Research Associate, Noble Capital Markets, Inc.
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Impressive Q2 results. The company reported fiscal Q2 end December 2022 revenue of $273.4 million, up a strong 33%, and Adj. EBITDA of $97 million, up 45%. The impressive revenue and Adj. EBITDA beat our estimates by 7.4% and 18.6%, respectively. Adj. EBITDA margins increase from 32.9% a year earlier to 35.5%.
Events and walk-in revenue rebound. The company reported impressive event revenue of $69 million, an increase of 74% from the prior year period. Walk in retail revenue in the quarter was $170 million, growing by 24% from the prior year period. Management attributed the strong rebound in event revenue to waning concerns over the Omicron Covid variant.
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Axcella is a clinical-stage biotechnology company pioneering a new approach to treat complex diseases using compositions of endogenous metabolic modulators (EMMs). The company’s product candidates are comprised of EMMs and derivatives that are engineered in distinct combinations and ratios to restore cellular homeostasis in multiple key biological pathways and improve cellular energetic efficiency. Axcella’s pipeline includes lead therapeutic candidates in Phase 2 development for the treatment of Long COVID and non-alcoholic steatohepatitis (NASH), and the reduction in risk of overt hepatic encephalopathy (OHE) recurrence. The company’s unique model allows for the evaluation of its EMM compositions through non-IND clinical studies or IND clinical trials. For more information, please visit www.axcellatx.com.
Robert LeBoyer, Vice President, Research Analyst, Life Sciences , Noble Capital Markets, Inc.
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IND Cleared For Phase 2b/3. Axcella Health announced that its IND submission for a Phase 2b/3 trial for AXA1125 in Long COVID Fatigue has been cleared by the FDA. This trial has been designed as a registrational trial to support an NDA filing. In January 2023, Axcella announced the UK’s MHRA (Medicines and Health Regulatory Agency) gave guidance that that a single trial could serve as a registrational trial. Axcella now has clearance in both the US and UK that allows AXA1125 to move forward as planned.
Phase 2b/3 Trial Design. The placebo-controlled trial has a projected enrollment of 300 patients. Patients will be treated for 12 weeks, compared with 4 weeks in the Phase 2a trial. The primary endpoint will be the CFQ11, an accepted clinical tool for measuring fatigue. Secondary endpoints will include the PROMIS questionnaire to measure pain, fatigue, physical function, emotional distress, and ability to return to work.
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*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.
Gold Softens as Yields Rise on US Treasuries From Inflation Stickiness
As the month of February began, the talk was for gold to hit $2,000 an ounce in the first quarter. But, as is often the case with investment markets, once certainty creeps into the mindset, something unexpected often comes along and undermines it. Gold may very well reach the $2,000 price in early 2023, but it has, for now, taken a small hit caused by a resurgence of expectations related to inflation’s pervasiveness. The inflation itself isn’t necessarily a problem, it is the chain reaction of events that then follows.
The One Two-Punch Catches Gold Off-Guard
Gold futures reached 10-month highs near $1,975 just before the release of January U.S. non-farm payrolls were reported on February 3rd. The Friday release showed large gains in the employment condition which stoked old inflation worries.
Concerns about inflation had been settling down before the jobs number. One indication of that is US bond yields had been priced, by most measures, for an eventual easing of rates, not tightening of conditions. The employment report itself began to unwind gold’s strength. The price sank to below $1,830 before recovering to around $1,875. The reason is that higher inflation, begets higher expectations of bond yields, which then begets capital flows into dollars to take advantage of the higher rates available. Gold becomes relatively weaker and less desirable under these conditions.
On February 14th, as some AU investors were falling out of love with gold, an inflation report (CPI) for January showed a tick-up in January prices over December’s numbers. This exacerbated U.S. inflation fears and helped to bring gold back under $1,850.
New Expectations
The shift in expectations over a two week period are not likely to unwind without new information which undermines the new employment and inflation reports. That doesn’t seem likely in the coming days as a just released wholesale price report (PPI) now indicates inflation is more than a services sector concern.
Gold long positions are now caught in the crosshairs of the Fed’s resolve to fight inflation. Every treasury yield spike has led to a dollar spike and been used as an opportunity to reduce demand for gold or reduce it’s relative value against US dollars.
Historically, gold prices had risen with inflation as investors bought the currency alternative as a hedge against paper currency. Currency typically loses value when prices go up. What happened then is more typical and is what is still taught in textbooks – good economic news was good for risk assets.
More recently, good economic news, worries investors because it has the potential to make inflation hotter, prompting the Fed to dial up rates and hurt everything from stocks to gold and oil. The positive correlation is on hiatus, probably until the Fed’s finger comes off the rates trigger.
Take Away
The markets had begun looking past the tightening phase after 450 bp worth of Fed Funds increases. The numbers reported in February have many investors, including those that trade currencies, precious metals, stocks, bonds, and other commodities less certain about the Fed calling for a cease fire in its inflation battle.
Of course, this new trend is young, it can conceivably be unwound in an instant in a changing world with many concerns outside and away from price increases.
Will AI Learn to Become a Better Entrepreneur than You?
Contemporary businesses use artificial intelligence (AI) tools to assist with operations and compete in the marketplace. AI enables firms and entrepreneurs to make data-driven decisions and to quicken the data-gathering process. When creating strategy, buying, selling, and increasing marketplace discovery, firms need to ask: What is better, artificial or human intelligence?
A recent article from the Harvard Business Review, “Can AI Help You Sell?,” stated, “Better algorithms lead to better service and greater success.” The attributes of the successful entrepreneur, such as calculated risk taking, dealing with uncertainty, keen sense for market signals, and adjusting to marketplace changes might be a thing of the past. Can AI take the place of the human entrepreneur? Would sophisticated artificial intelligence be able to spot market prices better, adjust to expectations better, and steer production toward the needs of consumers better than a human?
In one of my classes this semester, students and I discussed the role of AI, deep machine learning, and natural language processing (NLP) in driving many of the decisions and operations a human would otherwise provide within the firm. Of course, half of the class felt that the integration of some level of AI into many firms’ operations and resource management is beneficial in creating a competitive advantage.
However, the other half felt using AI will inevitably disable humans’ function in the market economy, resulting in less and less individualism. In other words, the firm will be overrun by AI. We can see that even younger college students are on the fence about whether AI will eliminate humans’ function in the market economy. We concluded as a class that AI and machine learning have their promises and shortcomings.
After class, I started thinking about the digital world of entrepreneurship. E-commerce demands the use of AI to reach customers, sell goods, produce goods, and host exchange—in conjunction with a human entrepreneur, of course.
However, AI—machine learning or deep machine learning—could also be tasked with creating a business-based model, examining the data on customers’ needs, designing a web page, and creating ads. Could AI adjust to market action and react to market uncertainty like a human? The answer may be a resounding yes! So, could AI eliminate the human entrepreneur?
Algorithm-XLab explains deep machine learning as something that “allows computers to solve complex problems. These systems can even handle diverse masses of unstructured data set.” Algorithm-XLab compared deep learning with human learning favorably, stating, “While a human can easily lose concentration, and possibly make a mistake, a robot won’t.”
This statement by Algorithm-XLab challenges the idea that trial and error leads to greater market knowledge and better enables entrepreneurs to provide consumers with what they are willing to buy. The statement also portrays the marketplace as a process where people have perfect knowledge and an equilibrium point, and it implies that humans do not have specialized knowledge of time and place.
The use of AI and its tools of deep learning and language processing do have their benefits from a technical standpoint. AI can determine how to produce hula hoops better, but can it determine whether to produce them or devote energy elsewhere? If entrepreneurs discover market opportunities, they must weigh the advantages and disadvantages of their potential actions. Will AI have the same entrepreneurial foresight?
The acquisition of market knowledge can take humans years to acquire; AI is much faster at it than humans would be. For example, the Allen Institute for AI is “working on systems that can take science tests, which require a knowledge of unstated facts and common sense that humans develop over the course of their lives.” The ability to process unstated, scattered facts is precisely the kind of characteristic we attribute to entrepreneurs. Processes, changes, and choices characterize the operation of the market, and the entrepreneur is at the center of this market function.
There is no doubt that contemporary firms use deep learning for strategy, operations, logistics, sales, and record keeping for human resources (HR) decision-making, according to a Bain & Company article titled “HR’s New Digital Mandate.” While focused on HR, the digital mandate does lend itself to questioning the use of entrepreneurial thinking and strategy conducted within a firm. After AI has learned how to operate a firm using robotic process automation and NLP capacities to their maximum, might it outstrip the human natural entrepreneurial abilities?
AI is used in everyday life, such as self-checkout at the grocery store, online shopping, social media interaction, dating apps, and virtual doctor appointments. Product delivery, financing, and development services increasingly involve an AI-as-a-service component. AI as a service minimizes the costs of gathering and processing customer insights, something usually associated with a team of human minds projecting key performance indicators aligned with an organizational strategy.
The human entrepreneur has a competitive advantage insofar as handling ambiguous customer feedback and in effect creating an entrepreneurial response and delivering satisfaction. We seek to determine whether AI has replaced human energy in some areas of life. Can AI understand human uneasiness or dissatisfaction, or the subjectivity of value felt by the consumer? AI can produce hula hoops, but can it articulate plans and gather the resources needed to produce them in the first place?.
In what, if any, entrepreneurial functions can AI outperform the human entrepreneur? The human entrepreneur is willing to take risks, adjust to the needs of consumers, pick up price signals, and understand customer choices. Could the human entrepreneur soon become an extinct class? If so, would machine learning and natural processing AI understand the differences between free and highly regulated markets? If so, which would it prefer, or which would it create?
Revenue was a record-breaking $273.4 million in the second quarter, growing $68.2 million, or 33.2%, year-over-year, and $88.5 million, or 47.9%, relative to the corresponding pre-pandemic period.1 Same-store revenue increased $54.4 million, or 27.3%, year-over-year, and grew $53.9 million, or 30.2%, vs. the comparable pre-pandemic period.2
Net income in the second the quarter was $1.4 million, impacted by the non-cash expense related to the revaluation of the earnout shares ($30.8 million). Adjusted for this non-cash expense, Normalized Net Income was $32.2 million.
Adjusted EBITDA in the second quarter was $97.0 million, $30.2 million, or 45.2%, higher vs. the prior year’s quarter, and $44.1 million, or 83.3%, higher relative to pre-pandemic performance.
Trailing Twelve Month (TTM) Revenue was $1.03 billion, a high watermark in the Company’s history. The TTM Revenue was $151 million or 17% higher than the corresponding projection provided in the December 2021 go-public transaction.
TTM Adjusted EBITDA was $353.0 million with a 34.3% margin and increased $158 million or 80.8% compared to prior year TTM period.
MoneyBowl™, the Company’s proprietary skill-based gamification app, is active in 37 centers as of February 15, 2023, which represents over 11% of the center population.
The Company added 8 new centers during the quarter. Total centers in operation as of January 1, 2023 were 326. Subsequent to the quarter-end, the Company acquired an additional 1 center bringing the updated center count to 327, and signed leases for another 6 locations to be newly constructed.
RICHMOND, Va.–(BUSINESS WIRE)– Bowlero Corp. (NYSE: BOWL) (“Bowlero” or the “Company”), the world’s largest owner and operator of bowling centers, today provided financial results for the second quarter of the 2023 fiscal year, which ended on January 1, 2023. Bowlero announced revenue of $273.4 million, which was driven by dramatic growth in event revenue and a solid increase in walk-in-retail and league revenue. Event Revenue grew 74% ($29.6 million) vs. the prior year’s quarter and 59% ($25.8 million) vs. the pre-pandemic quarter. Total revenue grew by 33.2% on a year-over-year basis and 47.9% compared to pre-pandemic performance. Same-store sales rose by 27.3% year-over-year and 30.2% relative to pre-pandemic quarter.
Bowling Center Trailing 13-week Revenue Growth Trend (Graphic: Business Wire)
“The Company’s second quarter top-line and bottom-line growth was extraordinary. The re-investment in our people that we made in the first quarter prepared us for a record holiday season that delivered on every facet. Event Revenue continued to drive revenue growth with event sales up $30 million over prior year’s quarter, more than offsetting the estimated $10 million loss in revenue due to the emergence of the COVID-19 Omicron variant in the prior year,” said Thomas Shannon, Founder and Chief Executive Officer. “The future for the Company is as bright as ever. In addition to record financial performance in the quarter, we continue to achieve exciting milestones, including surpassing $1.0 billion in TTM revenue, $350 million in TTM Adjusted EBITDA, and rolling out MoneyBowl™, our entirely in-house gamification app to 37 centers and counting, which we anticipate will revolutionize how bowlers interact with the lanes.”
Second-Quarter 2023 Operating Results
Tremendous growth in Revenue during the second quarter, totaling $273.4 million, up 33.2% on a year-over-year basis, and up 47.9% relative to pre-pandemic performance. Same-store sales increased 27.3% year-over-year, demonstrating the Company’s ability to continue to drive organic growth.
Net income for the quarter was $1.4 million, after giving effect to $30.8 million of non-cash expenses related to the increase in the fair value of earnouts. In the prior year, Net loss for the quarter was $34.5 million, driven primarily by non-recurring expenses related to the successful de-SPAC transaction net of the non-cash decrease in expenses related to fair value of the earnouts ($48.9 million). Adjusted for the non-cash expense, normalized Net Income was $14.4 million in the prior year’s quarter. Normalized Net Income increased $17.8 million or 123.1% vs. the prior year’s quarter. Adjusted EBITDA for the quarter was $97.0 million, up 45.2% year-over-year and 83.3% relative to pre-pandemic performance.The Company was able to expand margin as a result of the QMS’s tech-enabled financial performance optimization tool and operating leverage from higher revenue generation in the quarter.
Brett Parker, President and CFO of Bowlero, said, “We had a fantastic quarter. The second quarter’s margin improvement was the result of our relentless pursuit of operating leverage in the business while simultaneously driving sales in order to maximize EBITDA. Through our proprietary, algorithmic-based technology toolkit, management remained hyper-focused on maximizing both revenue and profit. We had a strong and balanced performance across all segments of our bowling business–walk-in retail, leagues, and events–and saw robust demand throughout the quarter.”
Financial Position
As of January 1, 2023, cash, cash equivalents, and restricted cash totaled $89.8 million and total debt was $887.7 million, resulting in net debt of $797.9 million. At the end of the second quarter of 2023, Bowlero’s Net Leverage Ratio was 2.3x TTM Adjusted EBITDA. For the second quarter of 2023, Net Cash provided by operating Activities was $80.3 million, and Net Cash generated from Adjusted Operating Activities was $106.0 million when adjusted for the $25.7 million in interest expense paid in cash.
Share Repurchase Program
The Company repurchased 629,677 shares of Class A common stock during the second quarter at an average price of $12.62, bringing the total shares repurchased to 4,528,447 shares (average price per share of $10.59) and bringing the total Class A and Class B shares outstanding down to 162.4 million as of January 1, 2023. The Company has now repurchased more than 100% of the shares issued as a result of the warrant redemption in May 2022. Bowlero has $146.6 million of share repurchase authorization remaining as of January 1, 2023.
Bowling Center Trailing 13-week Revenue Growth Trend3
[Please see the Bowling Center Trailing 13-week Revenue Growth TrendChart]
Investor Webcast Information
Listeners may access an investor webcast hosted by Bowlero. The webcast and results presentation will be accessible at 4:30 PM ET on February 15, 2023 in the Events & Presentations section of the Bowlero Investor Relations website at https://ir.bowlerocorp.com/overview/default.aspx.
About Bowlero Corp.
Bowlero Corp. is the worldwide leader in bowling entertainment. With more than 325 bowling centers across North America, Bowlero Corp. serves nearly 30 million guests each year through a family of brands that includes Bowlero and AMF. Bowlero Corp. is also home to the Professional Bowlers Association, which boasts thousands of members and millions of fans across the globe. For more information on Bowlero Corp., please visit BowleroCorp.com.
Forward Looking Statements
Some of the statements contained in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are generally identified by the use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology and include preliminary results. These forward-looking statements reflect our views with respect to future events as of the date of this release and are based on our management’s current expectations, estimates, forecasts, projections, assumptions, beliefs and information. Although management believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. All such forward-looking statements are subject to risks and uncertainties, many of which are outside of our control, and could cause future events or results to be materially different from those stated or implied in this document. It is not possible to predict or identify all such risks. These risks include, but are not limited to: the impact of COVID-19 or other adverse public health developments on our business; our ability to grow and manage growth profitably, maintain relationships with customers, compete within our industry and retain our key employees; changes in consumer preferences and buying patterns; the possibility that we may be adversely affected by other economic, business, and/or competitive factors; the risk that the market for our entertainment offerings may not develop on the timeframe or in the manner that we currently anticipate; general economic conditions and uncertainties affecting markets in which we operate and economic volatility that could adversely impact our business, including the COVID-19 pandemic and other factors described under the section titled “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) by the Company on September 15, 2022, as well as other filings that the Company will make, or has made, with the SEC, such as Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this press release and in other filings. We expressly disclaim any obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law.
Non-GAAP Financial Measures
To provide investors with information in addition to our results as determined under Generally Accepted Accounting Principles (“GAAP”), we disclose net income, normalized for extraordinary and non-recurring items, cash generated from Adjusted Operating Activities, net, Adjusted EBITDA, and trailing twelve month Adjusted EBITDA as “non-GAAP measures” that management believes provide useful information to investors because each measure assists both investors and management in analyzing and benchmarking the performance and value of our business. Accordingly, management believes that these measurements are useful for comparing general operating performance from period to period, and management relies on these measures for planning and forecasting of future periods. Additionally, these measures allow management to compare our results with those of other companies that have different financing and capital structures. These measures are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for revenue, net income, net cash provided (used) by operating activities or any other operating performance or liquidity measure calculated in accordance with GAAP, and may not be comparable to a similarly titled measure reported by other companies.
Net income normalized for extraordinary and non-recurring items represents Net income (loss) before non-cash expenses or income related to Changes in the value of earnouts and warrants. Cash generated from Adjusted Operating Activities, net represents Net cash provided by operating activities before cash interest. Adjusted EBITDA represents Net income (loss) before Interest, Income Taxes, Depreciation and Amortization, Share-based Compensation, EBITDA from Closed Centers, Foreign Currency Exchange Loss (Gain), Asset Disposition Loss (Gain), Transactional and other advisory costs, Charges attributed to new initiatives, Extraordinary unusual non-recurring gains or losses and Changes in the value of earnouts and warrants and settlement costs. Trailing twelve month Adjusted EBITDA represents Adjusted EBITDA over the most recent twelve month period.
The Company considers net income normalized for extraordinary and non-recurring items as an important financial measure because it provides an indicator of performance that is not affected by fluctuations in certain costs or other items. However, this measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are that it does not reflect every cash expenditure and is not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows.
The Company considers Cash generated from Adjusted Operating Activities, net as an important financial measure because it provides an indicator of cash flow that is not affected by how the Company finances its operations. However, this measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of cash generation as reported under GAAP.
The Company considers Adjusted EBITDA as an important financial measure because it provides a financial measure of the quality of the Company’s earnings. Other companies may calculate Adjusted EBITDA differently than we do, which might limit its usefulness as a comparative measure. Adjusted EBITDA is used by management in addition to and in conjunction with the results presented in accordance with GAAP. Additionally, we believe trailing twelve month Adjusted EBITDA provides the current run-rate for trending purposes, rather than annualizing the respective quarters, as the Company’s business is seasonal, with the second and third fiscal quarters being higher than the first and last quarters.
We have presented Adjusted EBITDA solely as a supplemental disclosure because we believe it allows for a more complete analysis of results of operations and assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance.
Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are that Adjusted EBITDA and trailing twelve month Adjusted EBITDA: do not reflect every expenditure, future requirements for capital expenditures or contractual commitments; do not reflect changes in our working capital needs; do not reflect the interest expense, or the amounts necessary to service interest or principal payments, on our outstanding debt; do not reflect income tax (benefit) expense, and because the payment of taxes is part of our operations, tax expense is a necessary element of our costs and ability to operate; do not reflect non-cash equity compensation, which will remain a key element of our overall equity based compensation package; and do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations.
The closed center adjustment is to remove EBITDA for closed centers. Closed centers are those centers that are closed for a variety of reasons, including permanent closure, newly acquired or built centers prior to opening, centers closed for renovation or rebranding and conversion. Closed centers do not include centers closed in compliance with local, state and federal government restrictions due to COVID-19. If a center is not open on the last day of the reporting period, it will be considered closed for that reporting period. If the center is closed on the first day of the reporting period for permanent closure, the center will be considered closed for that reporting period.
The adjustment for transaction costs and other advisory costs is to remove charges incurred in connection with any transaction, including mergers, acquisitions, refinancing, amendment or modification to indebtedness, dispositions and costs in connection with an initial public offering, in each case, regardless of whether consummated.
The adjustment for charges is to remove charges attributed to new initiatives include charges with the undertaking and/or implementation of new initiatives, business optimization activities, cost savings initiatives, cost rationalization programs, operating expense reductions and/or synergies and/or similar initiatives and/or programs (including in connection with any integration, restructuring or transition, any reconstruction, decommissioning, recommissioning, or reconfiguration of fixed assets for alternative uses, any office or facility opening and/or pre-opening), including any inventory optimization program and/or any curtailment, any business optimization charge, any restructuring charge (including any charges relating to any tax restructuring), any charge relating to the closure or consolidation of any office or facility (including but not limited to rent terminations, moving costs and legal costs), any systems implementation charge, any severance charge, any one time compensation charge, any charge relating to entry into a new market, any charge relating to any strategic initiative or contract, any charge relating to any entry into new markets and contracts, any lease run-off charge, any charge associated with improvements to information technology (IT) or accounting functions, losses related to temporary decreases in work volume and expenses related to maintaining underutilized personnel, any charge relating to a new contract, any consulting charge and/or any corporate development charge; provided, that, in this case of any such charge, the results of any such action relating to such charge are projected by in good faith to be achieved with 24 months of undertaking.
The adjustment for extraordinary unusual non-recurring gains or losses is to remove extraordinary gains and losses, which include any gain or charge from any extraordinary item as determined in good faith by the Company and/or any non-recurring or unusual item as determined in good faith by the Company and/or any charge associated with and/or payment of any legal settlement, fine, judgment or order.
The adjustment for changes in the value of earnouts and warrants is to remove the impact of the revaluation of the earnouts and warrants. As a result of the Company’s de-SPAC transaction, the Company recorded liabilities for earnouts and warrants. Changes in the fair value of the earnout and warrant liabilities are recognized in the statement of operations. Decreases in the liability will have a favorable impact on the income statement and increases in the liability will have an unfavorable impact.
The closed center adjustment is to remove EBITDA for closed centers. Closed centers are those centers that are closed for a variety of reasons, including permanent closure, newly acquired or built centers prior to opening, centers closed for renovation or rebranding and conversion. Closed centers do not include centers closed in compliance with local, state and federal government restrictions due to COVID-19. If a center is not open on the last day of the reporting period, it will be considered closed for that reporting period.If the center is closed on the first day of the reporting period for permanent closure, the center will be considered closed for that reporting period.
The adjustment for transaction costs and other advisory costs is to remove charges incurred in connection with any transaction, including mergers, acquisitions, refinancing, amendment or modification to indebtedness, dispositions and costs in connection with an initial public offering, in each case, regardless of whether consummated.
The adjustment for charges is to remove charges attributed to new initiatives include charges with the undertaking and/or implementation of new initiatives, business optimization activities, cost savings initiatives, cost rationalization programs, operating expense reductions and/or synergies and/or similar initiatives and/or programs (including in connection with any integration, restructuring or transition, any reconstruction, decommissioning, recommissioning, or reconfiguration of fixed assets for alternative uses, any office or facility opening and/or pre-opening), including any inventory optimization program and/or any curtailment, any business optimization charge, any restructuring charge (including any charges relating to any tax restructuring), any charge relating to the closure or consolidation of any office or facility (including but not limited to rent terminations, moving costs and legal costs), any systems implementation charge, any severance charge, any one time compensation charge, any charge relating to entry into a new market, any charge relating to any strategic initiative or contract, any charge relating to any entry into new markets and contracts, any lease run-off charge, any charge associated with improvements to information technology (IT) or accounting functions, losses related to temporary decreases in work volume and expenses related to maintaining underutilized personnel, any charge relating to a new contract, any consulting charge and/or any corporate development charge; provided, that, in this case of any such charge, the results of any such action relating to such charge are projected by in good faith to be achieved with 24 months of undertaking.
The adjustment for extraordinary unusual non-recurring gains or losses is to remove extraordinary gains and losses, which include any gain or charge from any extraordinary item as determined in good faith by the Company and/or any non-recurring or unusual item as determined in good faith by the Company and/or any charge associated with and/or payment of any legal settlement, fine, judgment or order.
The adjustment for changes in the value of earnouts and warrants is to remove the impact of the revaluation of the earnouts and warrants. As a result of the Company’s de-SPAC transaction, the Company recorded liabilities for earnouts and warrants. Changes in the fair value of the earnout and warrant liabilities are recognized in the statement of operations. Decreases in the liability will have a favorable impact on the income statement and increases in the liability will have an unfavorable impact. The adjustment also includes realized costs associated with the settlement of warrants during past reporting periods.
1 The pre-pandemic comparable period for quarter ended January 1, 2023 is the quarter ended on December 29, 2019.
2 Same-store sales are measured by comparing revenues for centers open for the entire duration of both the current and comparable measurement periods.
3 Revenue growth is calculated as the growth in Bowling Center Revenue compared to the comparable week during the pre-pandemic 52-week period beginning March 2019 and ending February 2020. Total Bowling Center Revenue (i) excludes media-related revenue and closed bowling centers from both current period and pre-pandemic and prior year periods and (ii) includes new bowling centers that have opened since March 2020. For weeks ending between September 26, 2021 and December 26, 2021, the percentages above are calculated by comparing each week to the comparable week in 2019. For weeks ending between January 2, 2022 and February 27, 2022, the percentages above are calculated by comparing each week to the comparable week in 2020. For weeks ending between March 6, 2022 and February 5, 2023, the percentages above are calculated by comparing each week to the comparable week in 2019. Total Bowling Center Revenue for each date is the 13-week rolling average of weekly Total Bowling Center Revenue. We use the 13-week rolling average because the revenue performance in individual weeks can be positively or negatively impacted by timing shift of holiday/sporting events, holidays moving to weekends, and extreme weather events. Data for all weeks following the close of the quarter ended on January 1, 2023 are preliminary and have not been audited or reviewed and are forward-looking statements based solely on information available to us as of the date of this announcement.
Acquisition expected to establish Item 9 Labs Corp. as the largest cannabis franchisor in North America & among the top 10 cannabis retailers
Sessions currently generates over CA$80 million in annual systemwide sales across more than 45 dispensaries in Ontario, with an Adjusted EBITDA* margin of approximately 65%
Item 9 Labs Corp. (OTCQX: INLB ) (the “Company”), a vertically integrated U.S. cannabis dispensary franchisor and operator that produces premium, award-winning products, shared that it has secured the necessary financing to complete the previously announced acquisition of Sessions Cannabis (“Sessions”), one of Canada’s largest cannabis retail franchisors. The total cash purchase price of the transaction is $12.8 million, which is being fully funded through an Acquisition Line of Credit with a 5-year term from a commercial lender.
“Our highly anticipated acquisition of Sessions is on track to close in March. We have completed the due diligence process, received all required approvals, and now, secured the financing to bring this transformative acquisition across the finish line and create the largest international cannabis retail franchiser and publicly traded cannabis franchise company in North America,” said CEO of Item 9 Labs Corp. Mike Weinberger.
The Canadian cannabis market is expected to reach upwards of $6.3 billion by 2026, according to data research firm BDSA . Most of the growth is projected to be produced from Ontario, Canada’s most populous province, as it contributes nearly $1.3 billion of legal sales alone.
Sessions currently generates more than CA$80 million in annual systemwide sales with over 45 locations open throughout Ontario, up from 40 earlier in 2022, and is continuing to grow rapidly. The franchise network consists of 15-plus franchisees, with over 10 who are multi-unit owner-operators. The franchise anticipates maintaining strong performance with multiple openings in prime retail shopping centers surrounded by well-known grocers, quick service restaurants, and more, already slated for the coming months.
The franchise business model will become fundamental to accommodate the shifts in the Canadian cannabis landscape and allow the future joint company to aid both existing independent dispensaries and prospective franchisees as part of its international growth strategy. By joining the greater combined North American franchise network of more than 50 dispensaries, they gain the ongoing, dedicated support and buying power needed to excel in highly competitive markets.
“Franchising is the key vehicle to unlocking untapped market potential and significantly increasing brand penetration,” Weinberger continued. “Sessions stores are strategically placed in prime retail locations and have not seen the same impact others have experienced in competitive Canadian cannabis markets. Their dispensaries are thriving, and we anticipate with our unified team that we will be able to scale quickly across the country.”
The closing of the acquisition is subject to customary closing conditions, details of which can be found in the Company’s 8-K filing on May 24, 2022 .
For more information about Item 9 Labs Corp. and its brands, visit item9labscorp.com . For potential merger and acquisition opportunities, contact Mark Busch at acquisitions@item9labs.com .
*Adjusted EBITDA is a non-GAAP financial measure of earnings. Adjusted EBITDA represents EBITDA plus stock-based compensation and non-recurring revenue and expenses.
ABOUT ITEM 9 LABS CORP.
Item 9 Labs Corp. (OTCQX: INLB) is a vertically integrated cannabis operator and dispensary franchisor delivering premium products from its large-scale cultivation and production facilities in the United States. The award-winning Item 9 Labs brand specializes in best-in-class products and user experience across several cannabis categories. The company also offers a unique dispensary franchise model through the national Unity Rd. retail brand. Easing barriers to entry, the franchise provides an opportunity for both new and existing dispensary owners to leverage the knowledge, resources and ongoing support needed to thrive in their state compliantly and successfully. Item 9 Labs brings the best industry practices to markets nationwide through distinctive retail experience, cultivation capabilities and product innovation. The veteran management team combines a diverse skill set with deep experience in the cannabis sector, franchising and the capital markets to lead a new generation of public cannabis companies that provide transparency, consistency and well-being. Headquartered in Arizona, the company is currently expanding its operations space up to 640,000-plus square feet on its 50-acre site, one of the largest properties in Arizona zoned to grow and cultivate flower. For additional information, visit item9labscorp.com .
ABOUT SESSIONS CANNABIS
Sessions Cannabis is a community focused retailer selling safe, Health Canada regulated cannabis. Sessions is one of Ontario’s first brick and mortar cannabis retailers with multiple locations in Ontario. The company’s mission is to bring people together by providing a retail experience that is inviting, comfortable and educational. More information can be found at sessions.ca .
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties, including, but not limited to, risks and effects of legal and administrative proceedings and governmental regulation, especially in a foreign country, future financial and operational results, competition, general economic conditions, proposed transactions that are not legally binding obligations of the company and the ability to manage and continue growth. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this news release include the introduction of new technology, market conditions and those set forth in reports or documents we file from time to time with the SEC. We undertake no obligation to revise or update such statements to reflect current events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Sale provides Energy Fuels with significant non-dilutive funding for expansion of industry-leading US uranium production and completion of ‘Phase 1’ rare earth separation circuit.
LAKEWOOD, Colo., Feb. 15, 2023 /CNW/ – Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) (“Energy Fuels” or the “Company”) is pleased to announce that it has completed the sale (the “Closing“) of three (3) wholly-owned subsidiaries that together hold Energy Fuels’ Alta Mesa ISR Project (“Alta Mesa“) to enCore Energy Corp. (“enCore“) for total consideration of $120 million (the “Transaction“). Unless otherwise indicated, all references to dollar amounts in this press release are references to US$.
The consideration is comprised of:
$60 million cash at or prior to Closing; and
$60 million in a secured convertible note (the “Note“), payable in two (2) years from the Closing, bearing annual interest of eight percent (8%). The Note will be convertible at Energy Fuels’ election into enCore common shares at a conversion price of $2.9103 per share, being a 20% premium to the 10-day volume-weighted average price of enCore shares ending the day before the Closing. enCore was recently listed on the NYSE American and also trades on the TSX Venture Exchange. The Note is guaranteed by enCore and is fully secured by Alta Mesa. Unless a block trade or similar distribution is executed by Energy Fuels to sell enCore shares received upon conversion of the Note, Energy Fuels will be limited to converting the Note into a maximum of $10 million principal amount per thirty (30) day period.
In addition, enCore is required to replace the existing reclamation bonds for the Alta Mesa project shortly after the Closing, which will result in Energy Fuels receiving an additional $3.6 million cash as a return of collateral from those bonds. The Transaction also reduces the Company’s holding costs related to Alta Mesa by approximately $2 million per year.
The Transaction provides Energy Fuels with significant additional cash and working capital, enabling the Company to ramp-up its US industry-leading uranium and rare earth element (“REE“) production, while avoiding dilution to shareholders. In addition, the Note provides Energy Fuels with significant exposure to uranium market upside through potential conversion into enCore common shares.
Boosting Industry-Leading US Uranium Production:
Energy Fuels plans to invest a portion of the proceeds from the Transaction into increasing its US industry-leading uranium production. At the current time, the Company’s White Mesa Mill (the “Mill“) is the only US uranium facility producing material quantities of uranium, having produced 162,000 pounds of U3O8 in Q4-2022. The Company is also preparing four (4) of its conventional uranium and uranium/vanadium mines to be ready to resume uranium ore production, including significant workforce expansion and performing needed rehabilitation of surface and underground infrastructure. The exact timing for resumption of ore production from each of these projects will be subject to current and future uranium sales and inventory requirements.
Energy Fuels’ 2022 uranium production of 162,000 pounds exceeded its previously announced guidance of 130,000 to 140,000 pounds of U3O8. In addition, over the past several months, the Company has invested in additional uranium inventories, having purchased approximately 301,000 pounds of US-origin U3O8 at a weighted average price of $50.08 per pound. In addition, in January 2023, the Company sold 300,000 pounds of U3O8 to the US government for the establishment of the strategic Uranium Reserve, earning total gross proceeds of $18.5 million, or $61.57 per pound.
As a result of 2022 production, recent purchases, and the sale to the US government, Energy Fuels currently holds approximately 847,000 pounds of U3O8 in inventory at a book value of $29.19 per pound (worth about $42.5 million at the current weekly uranium spot price as reported by TradeTech). In combination with future uranium production, the Company expects to utilize this inventory to fulfill its delivery obligations under its supply contracts with US nuclear utilities. Energy Fuels is also actively seeking additional uranium sales contracts with nuclear utilities at increasingly higher uranium prices bolstered by improving market fundamentals, including the global energy transition toward less carbon intensive sources of energy, including nuclear, efforts to move away from Russian uranium and nuclear fuel supply, and other factors related to transportation and security of supply. As a result of the Company’s strategic moves in the uranium space, the Company believes it is creating significant flexibility by growing and managing its existing inventories and preparing several of its US assets for near-term production.
Investing in Production of Advanced Rare Earth Materials in the US:
In a February 13, 2023 news release, the Company announced that it had achieved several milestones related to its expanding REE supply chain, including completion of the acquisition of the Bahia Project in Brazil and continued progress on procuring natural monazite sand concentrate. Today, the Company is producing the most advanced REE material in the US and is currently performing modifications and enhancements to the existing solvent extraction (“SX“) circuits at the Mill (“Phase 1“) that are expected to enable Energy Fuels to annually produce up to 5,000 metric tons (“MT“) of total REE oxides (“TREO“), including up to 1,000 MT of neodymium-praseodymium (“NdPr“) oxide (or oxalate), subject to receipt of sufficient REE-bearing monazite sand supply and successful commissioning. The “Phase 1” circuit will be in the same SX building where uranium and vanadium is produced at the Mill. If these milestones are achieved, Energy Fuels believes it will be the ‘first to market’ among US companies with commercial quantities of separated NdPr available to electric vehicle (“EV“), renewable energy, and other companies for offtake, while fully maintaining our uranium and vanadium recovery capabilities. Energy Fuels’ “Phase 1” “light” separation circuit is expected to produce commercial quantities of separated NdPr oxide (or oxalate) by later this year or early 2024, followed by planned further enhancements to expand NdPr production capability (“Phase 2“) and to produce separated “heavy” REEs, including Dy, Tb, and potentially other REE materials, in the future (“Phase 3“) from monazite and potentially other REE-bearing process streams.
Mark S. Chalmers, President and CEO of Energy Fuels stated: “Energy Fuels’ sale of the Alta Mesa project for $120 million of total consideration is highly strategic for a variety of reasons. When combined with our already strong balance sheet, the proceeds from this sale are expected to fully fund our current uranium, vanadium and rare earth business plans through approximately 2024 without the dilution to shareholders one might normally expect, nor depletion of working capital. On the uranium front, this sale provides Energy Fuels with the ability to make the focused investments in infrastructure and human capital required to resume production at our lowest-cost and nearest-term uranium mines and facilities. We believe Energy Fuels will be among the quickest to market with significant new US uranium production and retain our position as the leading US uranium producer for many years to come.
“Of the four (4) conventional mines we are currently preparing for production, three (3) produce both uranium and vanadium. Vanadium prices are currently on the move, having risen from $7.50 per pound of V2O5 in October 2022 to $10.80 per pound today. Vanadium is important to our uranium business, as strong vanadium prices contribute to the economics of these mines, making them a more attractive option for us as we evaluate which mines to place back into production. Due to today’s strong vanadium markets, we are also evaluating the sale of more of our existing vanadium inventory which currently sits at 987,000 pounds of V2O5.
“Even though uranium is Energy Fuels’ core business, we expect to invest some of the proceeds from the sale of Alta Mesa into our rapidly expanding rare earths business. We have started the modifications and enhancements at our White Mesa Mill in Utah that are expected to produce commercial quantities (500 – 1,000 MT) of NdPr oxide (or oxalate) by later this year or early in 2024, while maintaining our uranium and vanadium capabilities. NdPr oxide is a high-demand advanced material needed in the EV, renewable energy and defense industries. We are not aware of any other US company that will get this far down the US rare earth supply chain as quickly as Energy Fuels. It is also virtually unheard of anywhere else in the world to produce uranium, vanadium and separated rare earths in the same building, which demonstrates the creativity and resourcefulness of the team at the Mill.
“We also expect to invest some of the proceeds from Alta Mesa into advancing our Bahia Project in Brazil, where we plan to continue our comprehensive sonic drill program in 2023 to better define and delineate the titanium (ilmenite and rutile), zirconium (zircon), and of course rare earths (monazite) resources. We believe the Bahia Project has the potential to produce 3,000 to 10,000 MT per year of monazite concentrate for our Mill as soon as 2025 and for decades to come. Bahia, combined with other Company-owned and third-party monazite sources, is expected to supply the feed for ‘Phase 1’ and ‘Phase 2’ ‘light’ rare earth separation, and ‘Phase 3’ ‘heavy’ rare earth separation at the Mill.
“We see our rapidly developing REE business as highly complementary to our primary uranium business. We can utilize our existing facilities to recover uranium and REEs from monazite, which increases our uranium production and also allows us to generate margins from multiple commodities. No other US uranium producer has the ability to complement its primary uranium business in this manner.
“Finally, the $60 million secured convertible note Energy Fuels received from enCore at closing provides the Company with additional uranium market upside through the potential conversion of the Note into enCore Energy shares at an attractive conversion price.”
ABOUT ENERGY FUELS
Energy Fuels is a leading US-based critical minerals company. The Company mines uranium and produces natural uranium concentrates that are sold to major nuclear utilities for the production of carbon-free nuclear energy. Energy Fuels recently began production of advanced rare earth element (“REE“) materials, including mixed REE carbonate, and plans to produce commercial quantities of separated REE oxides in the future. Energy Fuels also produces vanadium from certain of its projects, as market conditions warrant, and is evaluating the recovery of radionuclides needed for emerging cancer treatments. Its corporate offices are in Lakewood, Colorado, near Denver, and substantially all its assets and employees are in the United States. Energy Fuels holds two of America’s key uranium production centers: the White Mesa Mill in Utah and the Nichols Ranch in-situ recovery (“ISR“) Project in Wyoming. The White Mesa Mill is the only conventional uranium mill operating in the US today, has a licensed capacity of over 8 million pounds of U3O8 per year, has the ability to produce vanadium when market conditions warrant, as well as REE products, from various uranium-bearing ores. The Nichols Ranch ISR Project is on standby and has a licensed capacity of 2 million pounds of U3O8 per year. The Company recently acquired the Bahia Project in Brazil, which is believed to have significant quantities of titanium (ilmenite and rutile), zirconium (zircon) and REE (monazite) minerals. In addition to the above production facilities, Energy Fuels also has one of the largest NI 43-101 compliant uranium resource portfolios in the US and several uranium and uranium/vanadium mining projects on standby and in various stages of permitting and development. The primary trading market for Energy Fuels’ common shares is the NYSE American under the trading symbol “UUUU,” and the Company’s common shares are also listed on the Toronto Stock Exchange under the trading symbol “EFR.” Energy Fuels’ website is www.energyfuels.com.
This news release contains “forward-looking information” within the meaning of applicable securities laws in the United States and Canada. Forward-looking information may relate to future events or future performance of Energy Fuels. All statements in this release, other than statements of historical facts, with respect to Energy Fuels’ objectives and goals, as well as statements with respect to its beliefs, plans, objectives, expectations, anticipations, estimates, and intentions, are forward-looking information. Specific forward-looking statements in this discussion include, but are not limited to, the following: any expectation that the Company will receive an additional $3.6 million cash as a return of collateral from the Alta Mesa reclamation bonds; any expectation that the conversion price of the Note may be attractive or that the Company will convert all or any portion of the Note; any expectation that the proceeds from the sale of Alta Mesa will fully fund the Company’s current uranium, vanadium and REE business plans through approximately 2024 without dilution to shareholders or depletion of working capital; any expectation that the Company will invest a portion of the proceeds of the Transaction into its uranium production; any expectation that the Company will successfully prepare any of its mines to resume ore production or that any of its mines will enter into production in the near term or at all; any expectation that the Company will utilize any of its inventories to fulfill delivery obligations under its existing supply contracts or will be successful in obtaining any additional supply contracts; any expectation as to the quantities of uranium and heavy minerals, including monazite, NdPr, Dy and Tb contained in the Bahia Project; any expectation as to the potential annual supply of monazite sands from the Bahia Project to the Mill, the contained MT of TREO per year, or the number of years or decades of such potential supply; any expectation as to the timing of mining at the Bahia Project; any expectation that the Company will complete its Phase 1, Phase 2 and/or Phase 3 separation facilities on the time frames indicated, if at all; any expectation as to the expected throughput rates, production capability, and REEs to be produced; any expectation that the Company will be the first to market among US companies with commercial quantities of separated NdPr available to EV, renewable energy and other companies for offtake; any expectation that the Company will retain its position as the leading US uranium producer for many years to come; any expectations as to vanadium or other commodity prices; any expectation that the Company will sell any of existing inventory at attractive prices or at all; any expectation that the Company will be able to utilize the Mill to generate margins from recovering uranium and REEs from monazite sands and other ores independent of the price of uranium; any expectation that the Company’s REE business may become a profitable stand-alone business for the Company, or provide commodity price diversification for the Company; and any expectation that the Mill is a unique and highly strategic asset in the US. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “continues”, “forecasts”, “projects”, “predicts”, “intends”, “anticipates” or “believes”, or variations of, or the negatives of, such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved. This information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. Factors that could cause actual results to differ materially from those anticipated in these forward-looking statements include risks associated with: technical difficulties; mining or processing difficulties and upsets;licensing, permitting and regulatory delays; litigation risks; competition from others; political actions or instability in foreign countries; and market factors, including future demand for and prices realized from the sale of uranium, vanadium and REEs. Forward-looking statements contained herein are made as of the date of this news release, and Energy Fuels disclaims, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or if management’s estimates or opinions should change, or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements. Energy Fuels assumes no obligation to update the information in this communication, except as otherwise required by law.
SOURCE Energy Fuels Inc.
For further information: ENERGY FUELS, Curtis Moore – VP of Marketing & Corporate Development, (303) 974-2154; CONTACT: ENERGY FUELS, Curtis Moore – SVP of Marketing & Corporate Development, (303) 974-2154
One Stop Systems, Inc. (OSS) designs and manufactures innovative AI Transportable edge computing modules and systems, including ruggedized servers, compute accelerators, expansion systems, flash storage arrays, and Ion Accelerator™ SAN, NAS, and data recording software for AI workflows. These products are used for AI data set capture, training, and large-scale inference in the defense, oil and gas, mining, autonomous vehicles, and rugged entertainment applications. OSS utilizes the power of PCI Express, the latest GPU accelerators and NVMe storage to build award-winning systems, including many industry firsts, for industrial OEMs and government customers. The company enables AI on the Fly® by bringing AI datacenter performance to ‘the edge,’ especially on mobile platforms, and by addressing the entire AI workflow, from high-speed data acquisition to deep learning, training, and inference. OSS products are available directly or through global distributors. For more information, go to www.onestopsystems.com.
Joe Gomes, Managing Director – Generalist 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.
Getting More Work. Yesterday, One Stop Systems announced the Company has received a $1.3 million contract from the U.S. Army to develop vehicle visualization systems. OSS will be working closely with the Army to deliver prototypes later in 2023. The announcement comes on the heels of the $3 million order last month, and further signifies the Company’s capabilities in military applications.
Details. The contract from the U.S. Army is for the design, development, and prototypes for a ruggedized compute visualization system. Using OSS PCIe Gen 4 switched fabric technology and NVIDIA Jetson AGX Orin system-on-modules, the system will be used to support 360-degree visualization for U.S. Army ground vehicles.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
Gregory Aurand, Senior Research Analyst, Healthcare Services & Medical Devices, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Proof of concept confirmed. ChitogenX announced yesterday that in the meniscus tear repair study, the ORTHO-R biopolymer showed residency on the tissue more than 24 hours after surgery. In addition, PRP regenerative cells were recruited and aggregated at the surgery site. PRP alone disperses quickly, but the “sticky” PRP/chitosan biopolymer matrix showed extended tissue adherence.
Meniscus tear repair study in sheep. This pre-clinical study, composed of 22 sheep, tested the subjects’ menisci with sutures alone vs. platelet rich plasma (PRP) alone vs. PRP delivered by ORTHO-R biopolymer. This study represents the Company’s second proof of concept for their ORTHO-R drug/biologic in an orthopedic indication.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
How Dangerous Was the Ohio Chemical Train Derailment? An Environmental Engineer Assesses the Long-Term Risks
State officials offered more details of the cleanup process and a timeline of the environmental disaster during a news conference on Feb. 14, 2023. Nearly a dozen cars carrying chemicals, including vinyl chloride, a carcinogen, derailed on the evening of Feb. 3, and fire from the site sent up acrid black smoke. Officials said they were testing over 400 nearby homes for contamination and tracking a plume of spilled chemicals that had killed 3,500 fish in streams and reached the Ohio River.
However, the slow release of information after the derailment has left many questions unanswered about the risks and longer-term impact. We discussed the chemical release with Andrew Whelton, an environmental engineer who investigates chemical risks during disasters.
This article was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic experts. It represents the research-based findings and thoughts of, Andrew J. Whelton, Professor of Civil, Environmental & Ecological Engineering, Director of the Healthy Plumbing Consortium and Center for Plumbing Safety, Purdue University.
Let’s start with what was in the train cars. What are the most concerning chemicals for human health and the environment long term, and what’s known so far about the impact?
The main concerns now are the contamination of homes, soil and water, primarily from volatile organic compounds and semivolatile organic compounds, known as VOCs and SVOCs.
The train had nearly a dozen cars with vinyl chloride and other materials, such as ethylhexyl acrylate and butyl acrylate. These chemicals have varying levels of toxicity and different fates in soil and groundwater. Officials have detected some of those chemicals in the nearby waterway and particulate matter in the air from the fire. But so far, the fate of many of the chemicals is not known. A variety of other materials were also released, but discussion about those chemicals has been limited.
State officials disclosed that a plume of contamination released into the nearby creek had made its way into the Ohio River. Other cities get their drinking water from the river, and were warned about the risk. The farther this plume moves downstream, the less concentrated the chemical will be in water, posing less of a risk.
Long term, the greatest risk is closest to the derailment location. And again, there’s limited information about what chemicals are present – or were created through chemical reactions during the fire.
It isn’t clear yet how much went into storm drains, was flushed down the streams or may have settled to the bottom of waterways.
There was also a lot of combusted particulate matter. The black smoke is a clear indication. It’s unclear how much was diluted in the air or fell to the ground.
How long can these chemicals linger in soil and water, and what’s their potential long-term risk to humans and wildlife?
The heavier the chemical, often the slower it degrades and the more likely it is to stick to soil. These compounds can remain for years if left unaddressed.
After the Kalamazoo River oil pipeline break in Michigan in 2010, the U.S. Environmental Protection Agency excavated a tributary where the oil settled. We’ve also seen from oil spills on the coasts of Alaska and Alabama that oil chemicals can find their way into soil if it isn’t remediated.
The long-term impact in Ohio will depend in part on how fast – and thoroughly – cleanup occurs.
If the heavily contaminated soils and liquids are excavated and removed, the long-term impacts can be reduced. But the longer removal takes, the farther the contamination can spread. It’s in everyone’s best interest to clean this up as soon as possible and before the region gets rain.
Air-stripping devices, like this one used after the derailment, can help separate chemicals from water. U.S. EPA
Booms in a nearby stream have been deployed to capture chemicals. Air-stripping devices have been deployed to remove chemicals from the waterways. Air stripping causes the light chemicals to leave the water and enter air. This is a common treatment technique and was used after an 2015 oil spill in the Yellowstone River near Glendive, Montana.
At the derailment site in Ohio, workers are already removing contaminated soil as deep as 7 feet (about 2 meters) near where the rail cars burned.
Some of the train cars were intentionally drained and the chemicals set on fire to eliminate them. That fire had thick black smoke. What does that tell you about the chemicals and longer-term risks?
Incineration is one way we dispose of hazardous chemicals, but incomplete chemical destruction creates a host of byproducts. Chemicals can be destroyed when heated to extremely high temperatures so they burn thoroughly.
The black smoke plume you saw on TV was incomplete combustion. A number of other chemicals were created. Officials don’t necessarily know what these were or where they went until they test for them.
We know ash can post health risks, which is why we test inside homes after wildfires where structures burn. This is one reason the state’s health director told residents with private wells near and downwind of the derailment to use bottled water until they can have their wells tested.
The EPA has been screening homes near the derailment for indoor air-quality concerns. How do these chemicals get into homes and what happens to them in enclosed spaces?
Homes are not airtight, and sometimes dust and other materials get in. It might be through an open door or a window sill. Sometimes people track it in.
So far, the U.S. EPA has reported no evidence of high levels of vinyl chloride or hydrogen chloride in the 400 or so homes tested. But full transparency has been lacking. Just because an agency is doing testing doesn’t mean it is testing for what it needs to test for. Media reports talk about four or five chemicals, but the manifest from Norfolk Southern also listed a bunch of other materials in tanks that burned. All those materials create potentially hundreds to thousands of VOCs and SVOCs.
Are Government Officials Testing for Everything they Should?
People in the community have reported headaches, which can be caused by VOCs and other chemicals. They’re understandably concerned.
Ohio and federal officials need to better communicate what they’re doing, why, and what they plan to do. It’s unclear what questions they are trying to answer. For a disaster this serious, little testing information has been shared.
In the absence of this transparency, misinformation is filling that void. From a homeowner’s perspective, it’s hard to understand the true risk if the data is not shared.
Getting to Know ChatGPT: A Shallow Dip into Its Current Functionality and Future Potential
ChatGPT and the underlying AI technology are, as near as anyone can tell, the next-level toolkit for research, communication, idea generation, and a million other uses. If you haven’t introduced yourself to it yet, leave plenty of time – getting started is easy, but getting yourself to stop may not be. Those of us that were around pre-internet may liken the first-time experience to the first time we gained access to the world wide web. The Sudden, much easier access to a world of information, puts one in a place where you don’t know what to try first.
Over the past couple of months, the now-familiar name, ChatGPT has made headlines. It quickly captivated the worlds imagination as an AI product that is likely to disrupt or destroy some industries while enhancing others. Obviously, this is of particular interest to investors. With this in mind, I sat down for an interview with ChatGPT; below are answers to questions that many investors are asking.
Channelchek (PH) – Am I able to interview Chatgpt?
ChatGPT – Hello! As an AI language model, I’m happy to answer any questions you may have. However, it’s important to keep in mind that I don’t have personal experiences or opinions like a human, and I can only provide information based on my training data. So feel free to ask me anything!
Channelchek (PH) – What do most users have ChatGPT to do for them?
ChatGPT – As an AI language model, ChatGPT can be used for a wide range of tasks, including:
Language translation: ChatGPT can be used to translate text from one language to another.
Content creation: ChatGPT can generate text for various types of content, such as articles, blog posts, and product descriptions.
Chatbot development: ChatGPT can be used to develop chatbots that can interact with users and provide information.
Sentiment analysis: ChatGPT can be used to analyze the sentiment of a piece of text, such as a social media post or a product review.
Question-answering: ChatGPT can be used to answer questions on a wide range of topics.
Text summarization: ChatGPT can be used to summarize long pieces of text into shorter, more manageable summaries.
Language modeling: ChatGPT can be used to train new models for specific domains, such as medical or legal language.
These are just a few examples of what ChatGPT can be used for. Its versatility and flexibility make it a powerful tool for many different applications.
Channelchek (PH) – From where do you pull your answers ChatGPT?
ChatGPT – As an AI language model, I don’t have pre-programmed answers. Instead, I generate responses to questions by analyzing patterns in large amounts of text data that I was trained on. Specifically, I was trained on a dataset of billions of words from various sources, including books, articles, websites, and other textual sources. During my training, I was exposed to a wide range of topics and writing styles, which helps me generate responses to many different types of questions.
When you ask me a question, I use natural language processing (NLP) techniques to analyze the question and generate a response based on patterns in the text data that I was trained on. I then use statistical models to determine the most likely response based on the context of the question and the patterns in the training data.
It’s important to note that my responses are only as accurate and reliable as the patterns that I learned during my training. While I strive to provide accurate and helpful information, I may not always get it right, and my responses may not reflect the views or opinions of OpenAI.
Channelchek (PH) – Are you at risk of having the response you generate slanted or biased based on users feedback adjusting your training ChatGPT?
ChatGPT – As an AI language model, I am designed to learn from the data that I am trained on, including the feedback that users provide to adjust my training. However, it’s important to be aware that the feedback that users provide can sometimes introduce biases into my training.
If the feedback is consistently biased in a particular direction, this could affect the accuracy and fairness of my responses. This is why it’s important to carefully monitor and evaluate any feedback that is used to adjust my training, and to ensure that it is representative of a wide range of perspectives.
To address this issue, OpenAI has implemented a number of safeguards to prevent bias and ensure that my training data is as accurate and diverse as possible. For example, the training data is carefully curated to include a wide range of sources and perspectives, and the training process is carefully monitored to ensure that biases are not introduced.
Additionally, OpenAI has implemented a number of techniques to help identify and mitigate any biases that may be present in the training data or feedback. For example, I am periodically evaluated to ensure that my responses are accurate and unbiased, and any issues that are identified are addressed through additional training or other adjustments to the model.
Channelchek (PH) – As an editor I write for Channelchek about stocks, the financial markets, the economy and business climate. Are you a good resource for current events related to these topics ChatGPT?
ChatGPT – As an AI language model, I can certainly provide you with information on current events related to stocks, financial markets, the economy, and the business climate. I have been trained on a vast amount of text data, including news articles and other sources related to these topics, so I can provide you with up-to-date information and insights on current events.
When asking me questions related to these topics, it’s important to provide me with as much context and specificity as possible so that I can provide you with the most accurate and relevant information. For example, if you are looking for information on a particular company or sector, you could provide me with the name of the company or sector, as well as any other relevant details or questions you may have.
However, it’s important to note that my responses are generated based on patterns in the text data that I was trained on, and may not reflect the views or opinions of OpenAI. Additionally, while I can provide you with information on current events and trends, I cannot provide investment advice or make predictions about future market performance. It’s always important to carefully evaluate information and seek the advice of a qualified financial professional before making investment decisions.
Channelchek (PH) – Do users ask you to forecast the stock market direction?
ChatGPT – Yes, users sometimes ask me to forecast the direction of the stock market. However, as an AI language model, I cannot make accurate predictions about future market performance. While I can provide information on current market trends and historical data, predicting the future direction of the stock market is a highly complex task that involves a range of economic, political, and social factors.
It’s important to note that investing in the stock market involves a certain degree of risk, and investors should always carefully evaluate market conditions and seek the advice of a qualified financial professional before making investment decisions. While I can provide general information and insights related to stocks and financial markets, I cannot provide investment advice or predict the future performance of individual stocks or the overall market.
Channelchek (PH) – Are you familiar with Channelchek?
ChatGPT – While I am not specifically programmed to be familiar with individual websites, I may have come across content from Channelchek during my training.
That being said, I can still provide you with general information on what Channelchek is. From my understanding, Channelchek is a financial information platform that provides independent research, analysis, and market commentary on publicly traded companies. It offers a range of tools and resources for investors and financial professionals, including market data, stock quotes, and research reports.
Channelchek’s focus is on providing unbiased and independent information to help investors make informed investment decisions.
Channelchek (PH) – Does your AI technology pose a risk to traditional internet search engines?
ChatGPT – My purpose is not to compete with traditional search engines like Google or Bing, but rather to complement them by providing an additional source of information and assistance to users. While I am capable of providing answers to a wide range of questions and generating responses to open-ended queries, I am not designed to replace traditional search engines or web browsing.
Search engines like Google and Bing are still the primary means by which users navigate the internet and find information, and they use a range of sophisticated algorithms and machine learning techniques to index and rank content on the web. While I am capable of processing natural language queries and generating responses, my training data is based on pre-existing content, which means that my responses are generated based on patterns in the text data that I was trained on, rather than direct access to the vast amounts of data on the internet.
Early Boolean Phrase Search Tool
Overall, AI language models like me are part of a larger ecosystem of tools and technologies that are designed to help users access and navigate the vast amount of information available online. While there may be some overlap between the capabilities of traditional search engines and AI language models, both serve different purposes and can work together to provide users with the most comprehensive and accurate information possible.
Channelchek (PH) – What industries are you likely to disrupt and which are you likely to augment or help build?
ChatGPT – As an AI language model, my capabilities are quite broad, and I have the potential to impact a wide range of industries and areas of society. Here are a few ways in which I could potentially disrupt or augment various industries:
Industries that could be disrupted:
Customer service: AI language models like me are already being used by many companies to automate and improve customer service interactions, and this trend is likely to continue. As AI technology improves, it could potentially replace many human customer service jobs.
Content creation: AI language models have the potential to automate certain types of content creation, such as news articles, product descriptions, and even social media posts. This could have a significant impact on the journalism and writing industries.
Education: AI language models could potentially disrupt the traditional education model by providing personalized learning experiences and automating certain types of teaching and grading.
Industries that could be augmented:
Healthcare: AI language models could help augment healthcare by providing more accurate and personalized diagnoses, and by automating certain types of administrative tasks.
Finance: AI language models could help augment finance by providing more accurate and data-driven investment advice, and by automating certain types of financial analysis.
Research: AI language models could help augment research by processing and analyzing vast amounts of data, and by identifying patterns and insights that might be difficult for humans to spot on their own.
Overall, the impact of AI language models like me on various industries will depend on a wide range of factors, including the development of the technology, the regulatory environment, and societal attitudes toward automation and AI. While there may be some industries that are more susceptible to disruption or augmentation than others, it’s important to approach these developments with a nuanced understanding of the potential benefits and risks.
Channelchek (PH) – Are users using ChatGPT to create social media bots to respond without human intervention likely to flood the internet?
ChatGPT – While it is technically possible for users to use AI language models like ChatGPT to create social media bots that can respond to messages without human intervention, I cannot speculate on whether this is likely to flood the internet.
The use of AI language models like ChatGPT could potentially make it easier and more accessible for users to create more sophisticated chatbots that can mimic human conversation more convincingly.
It’s also important to consider the potential impact of widespread use of social media bots on the quality and authenticity of online interactions. While chatbots can be useful in certain contexts, they can also be used to spread misinformation and propaganda or to manipulate public opinion. As with any technology, it’s important to approach the use of AI language models and chatbots in a responsible and ethical way, and to consider the potential risks and benefits of their use.
Channelchek (PH) – What do you call one that uses ChatGPT?
ChatGPT – There is no specific term for a person who uses ChatGPT or other AI language models, as these tools are designed to be accessible and usable by anyone with an internet connection.
However, a person who uses ChatGPT to create chatbots or other automated tools could be referred to as an AI developer or AI engineer. Similarly, a person who uses ChatGPT to conduct research or analysis in a specific field could be referred to as an AI researcher or analyst.
Channelchek (PH) – How much do you cost?
As an AI language model, I do not have a specific cost as I am not a commercial product. My purpose is to provide information and assistance to users like you, and I am freely accessible through various platforms that integrate my technology, including chatbots, voice assistants, and search engines.
Channelchek (PH) – Should I throw out the encyclopedias on my book shelf and rely instead on ChatGPT?
ChatGPT – Ultimately, whether or not to keep your encyclopedias depends on your personal preferences and how you prefer to access information. While AI language models like ChatGPT are convenient and accessible, they may not always provide the level of detail or accuracy that you require for a specific question or topic. So, it’s always a good idea to consult multiple sources of information to ensure that you have a well-rounded understanding of a given topic.
Channelchek (PH) – How does one get started using ChatGPT for research?
ChatGPT – Getting started with using ChatGPT for research can involve several steps. Here are a few basic steps you can follow:
Identify your research question or topic: Start by identifying the research question or topic you want to investigate. This will help you to focus your search and make the best use of ChatGPT.
Choose a ChatGPT platform: There are several platforms that integrate ChatGPT, including chatbots, voice assistants, and search engines. Choose a platform that best fits your needs and preferences.
Familiarize yourself with the platform: Once you have chosen a platform, take some time to explore and familiarize yourself with its features and capabilities. Many platforms offer tutorials and guides to help you get started.
Start asking questions: Once you are comfortable with the platform, start asking questions related to your research topic. Try to ask open-ended questions that will allow ChatGPT to provide more detailed and relevant answers.
Evaluate the results: As you receive answers from ChatGPT, evaluate the accuracy and relevance of the information. Keep in mind that ChatGPT is not perfect and may not always provide the most accurate or comprehensive information. Be sure to double-check any information you receive with other sources to ensure its accuracy.
Refine your search: If you are not finding the information you need, try refining your search by using more specific keywords or phrases.
Overall, using ChatGPT for research can be a valuable tool for gathering information and conducting preliminary investigations. However, it’s important to keep in mind that it is just one tool in the research process, and should be used in conjunction with other sources of information and research methods.
Wrap Up
It’s easy to comprehend how this technology, which will likely see stronger competition in the coming year, will quickly become something that is used every day to help streamline how we do our jobs, and find information in our personal lives. Unlike an internet search engine, queries produce individual results tailored to the individual question. The same question will recieve different phraseology if asked a minute later. Whereas Google or DuckDuckGo list websites that may provide the answer, ChatGPT responds using its own answer using artificial intelligence.
Getting started is as easy as going to OpenAI.com and navigating to Chat.OpenAI.com and providing an email and verification phone number. Click on my name below and write me, I’d love to hear what you are using it for.
