QuoteMedia Announces 22% Revenue Growth for 2021

Research, News, and Market Data on QuoteMedia

 

PHOENIX, March 30, 2022 (GLOBE NEWSWIRE) — QuoteMedia, Inc. (OTCQB: QMCI), a leading provider of market data and financial applications, announced financial results for the fiscal year ended December 31, 2021.

QuoteMedia provides banks, brokerage firms, private equity firms, financial planners and sophisticated investors with a more economical, higher quality alternative source of stock market data and related research information. We compete with several larger legacy organizations and a modest community of other smaller companies.  QuoteMedia provides comprehensive market data services, including streaming data feeds, on-demand request-based data (XML/JSON), web content solutions (financial content for website integration) and applications such as Quotestream Professional desktop and mobile.

Highlights for fiscal 2021 include the following:

• Annual revenue increased to $15,174,372 in 2021 from $12,402,224 in 2020, an increase of $2,772,148 (22%).
• Net income for 2021 was $212,372 compared to a net loss of $646,324 in 2020, an improvement in profitability of $858,696.
• Adjusted EBITDA for 2021 was $1,649,679 compared to $734,068 in 2020, an improvement of $915,611.
  

“This was an enormously successful year for QuoteMedia, and we are very pleased with our results,” said Robert J. Thompson, Chairman of the Board. “We experienced strong growth across virtually every success metric, including revenue growth, profitability and market share; and we also grew and improved our product lines, data coverage and infrastructure. We are even more excited about the year to come, as we expect to maintain this momentum and improve upon the results we achieved in 2022.

“2022 has started on a positive footing. QuoteMedia entered into preliminary agreements with two large multinational financial institutions to start a range of services while definitive multi-year agreements are being finalized. Based on those new contracts and our other clients currently under contract, we expect our revenue growth in fiscal 2022 to be comparable to the 22% annual revenue growth rate we achieved in 2021; and we expect to significantly improve upon the $212,372 net income figure reported in 2021.

“Additionally, because of the efforts and investments we made to improve our infrastructure, security, and business continuity management over the last year, we anticipate achieving our SOC2 Type II certification in the coming months. SOC2 certification provides independent assurance that an organization maintains a high level of information security, data integrity and business resiliency. This certification will allow QuoteMedia to make even greater gains in market share, as it is increasingly becoming a requirement for those providing services to large financial institutions.

“2021 was a very good year for QuoteMedia, and 2022 looks like it may be even better.”

QuoteMedia will host a conference call Wednesday, March 30, 2022 at 2:00 PM Eastern Time to discuss the 2021 financial results and provide a business update.

Conference Call Details:

Date: March 30, 2022

Time: 2:00 PM Eastern

Dial-in number: 866-831-8713

Conference ID: QUOTEMEDIA

An audio rebroadcast of the call will be available later at: www.quotemedia.com

About QuoteMedia

QuoteMedia is a leading software developer and cloud-based syndicator of financial market information and streaming financial data solutions to media, corporations, online brokerages, and financial services companies. The Company licenses interactive stock research tools such as streaming real-time quotes, market research, news, charting, option chains, filings, corporate financials, insider reports, market indices, portfolio management systems, and data feeds. QuoteMedia provides industry leading market data solutions and financial services for companies such as the Nasdaq Stock Exchange, TMX Group (TSX Stock Exchange), Canadian Securities Exchange (CSE), London Stock Exchange Group, FIS, U.S. Bank, Broadridge Financial Systems, JPMorgan Chase, CI Financial, Canaccord Genuity Corp., Hilltop Securities, HD Vest, Stockhouse, Zacks Investment Research, General Electric, Boeing, Bombardier, Telus International, Business Wire, PR Newswire, FolioFN, Regal Securities, ChoiceTrade, Cetera Financial Group, Dynamic Trend, Inc., Qtrade Financial, CNW Group, IA Private Wealth, Ally Invest, Inc., Suncor, Virtual Brokers, Leede Jones Gable, Firstrade Securities, Charles Schwab, First Financial, Cirano, Equisolve, Stock-Trak, Mergent, Cision, Day Trade Dash and others. Quotestream®, QModTM and Quotestream ConnectTM are trademarks of QuoteMedia. For more information, please visit www.quotemedia.com .

Statements about QuoteMedia’s future expectations, including future revenue, earnings, and transactions, as well as all other statements in this press release other than historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. QuoteMedia intends that such forward-looking statements be subject to the safe harbors created thereby. These statements involve risks and uncertainties that are identified from time to time in the Company’s SEC reports and filings and are subject to change at any time. QuoteMedia’s actual results and other corporate developments could differ materially from that which has been anticipated in such statements.

Below are the specific forward-looking statements included in this press release:

• Based on those new contracts and our other clients currently under contract, we expect our revenue growth in fiscal 2022 to be comparable to the 22% annual revenue growth rate we achieved in 2021; and we expect to significantly improve upon the $212,372 net income figure reported in 2021.
  
• Additionally, because of the efforts and investments we made to improve our infrastructure, security, and business continuity management over the last year, we anticipate achieving our SOC2 Type II certification in the coming months. SOC2 certification provides independent assurance that an organization maintains a high level of information security, data integrity and business resiliency. This certification will allow QuoteMedia to make even greater gains in market share, as it is increasingly becoming a requirement for those providing services to large financial institutions.
  
• 2021 was a very good year for QuoteMedia, and 2022 looks like it may be even better.
  

QuoteMedia Investor Relations
Brendan Hopkins
Email: investors@quotemedia.com
Call: (407) 645-5295

Note 1 on Non-GAAP Financial Measures

We believe that Adjusted EBITDA, as a non-GAAP pro forma financial measure, provides meaningful information to investors in terms of enhancing their understanding of our operating performance and results, as it allows investors to more easily compare our financial performance on a consistent basis compared to the prior year periods. This non-GAAP financial measure also corresponds with the way we expect investment analysts to evaluate and compare our results. Any non-GAAP pro forma financial measures should be considered only as supplements to, and not as substitutes for or in isolation from, or superior to, our other measures of financial information prepared in accordance with GAAP, such as net income attributable to QuoteMedia, Inc.

We define and calculate Adjusted EBITDA as net income attributable to QuoteMedia, Inc., plus: 1) depreciation and amortization, 2) stock compensation expense, 3) interest expense, 4) foreign exchange loss (or minus a foreign exchange gain), and 5) income tax expense. We disclose Adjusted EBITDA because we believe it is a useful metric by which to compare the performance of our business from period to period. We understand that measures similar to Adjusted EBITDA are broadly used by analysts, rating agencies, investors and financial institutions in assessing our performance. Accordingly, we believe that the presentation of Adjusted EBITDA provides useful information to investors. The table below provides a reconciliation of Adjusted EBITDA to net income attributable to QuoteMedia, Inc., the most directly comparable GAAP financial measure.

QuoteMedia, Inc. Adjusted EBITDA Reconciliation to Net Loss

	2021				2020
Net income (loss)	$	212,372			$	(646,324	)
Depreciation and amortization		1,640,245				1,331,910
Stock-based compensation		31,876				37,872
Interest expense		2,641				4,582
Foreign exchange loss		(107,382	)			3,791
Income tax expense		3,184				2,237
PPP loan forgiveness		(133,257	)			–
Adjusted EBITDA	$	1,649,679			$	734,068

QuoteMedia Announces 22% Revenue Growth for 2021

Research, News, and Market Data on QuoteMedia

 

PHOENIX, March 30, 2022 (GLOBE NEWSWIRE) — QuoteMedia, Inc. (OTCQB: QMCI), a leading provider of market data and financial applications, announced financial results for the fiscal year ended December 31, 2021.

QuoteMedia provides banks, brokerage firms, private equity firms, financial planners and sophisticated investors with a more economical, higher quality alternative source of stock market data and related research information. We compete with several larger legacy organizations and a modest community of other smaller companies.  QuoteMedia provides comprehensive market data services, including streaming data feeds, on-demand request-based data (XML/JSON), web content solutions (financial content for website integration) and applications such as Quotestream Professional desktop and mobile.

Highlights for fiscal 2021 include the following:

• Annual revenue increased to $15,174,372 in 2021 from $12,402,224 in 2020, an increase of $2,772,148 (22%).
• Net income for 2021 was $212,372 compared to a net loss of $646,324 in 2020, an improvement in profitability of $858,696.
• Adjusted EBITDA for 2021 was $1,649,679 compared to $734,068 in 2020, an improvement of $915,611.
  

“This was an enormously successful year for QuoteMedia, and we are very pleased with our results,” said Robert J. Thompson, Chairman of the Board. “We experienced strong growth across virtually every success metric, including revenue growth, profitability and market share; and we also grew and improved our product lines, data coverage and infrastructure. We are even more excited about the year to come, as we expect to maintain this momentum and improve upon the results we achieved in 2022.

“2022 has started on a positive footing. QuoteMedia entered into preliminary agreements with two large multinational financial institutions to start a range of services while definitive multi-year agreements are being finalized. Based on those new contracts and our other clients currently under contract, we expect our revenue growth in fiscal 2022 to be comparable to the 22% annual revenue growth rate we achieved in 2021; and we expect to significantly improve upon the $212,372 net income figure reported in 2021.

“Additionally, because of the efforts and investments we made to improve our infrastructure, security, and business continuity management over the last year, we anticipate achieving our SOC2 Type II certification in the coming months. SOC2 certification provides independent assurance that an organization maintains a high level of information security, data integrity and business resiliency. This certification will allow QuoteMedia to make even greater gains in market share, as it is increasingly becoming a requirement for those providing services to large financial institutions.

“2021 was a very good year for QuoteMedia, and 2022 looks like it may be even better.”

QuoteMedia will host a conference call Wednesday, March 30, 2022 at 2:00 PM Eastern Time to discuss the 2021 financial results and provide a business update.

Conference Call Details:

Date: March 30, 2022

Time: 2:00 PM Eastern

Dial-in number: 866-831-8713

Conference ID: QUOTEMEDIA

An audio rebroadcast of the call will be available later at: www.quotemedia.com

About QuoteMedia

QuoteMedia is a leading software developer and cloud-based syndicator of financial market information and streaming financial data solutions to media, corporations, online brokerages, and financial services companies. The Company licenses interactive stock research tools such as streaming real-time quotes, market research, news, charting, option chains, filings, corporate financials, insider reports, market indices, portfolio management systems, and data feeds. QuoteMedia provides industry leading market data solutions and financial services for companies such as the Nasdaq Stock Exchange, TMX Group (TSX Stock Exchange), Canadian Securities Exchange (CSE), London Stock Exchange Group, FIS, U.S. Bank, Broadridge Financial Systems, JPMorgan Chase, CI Financial, Canaccord Genuity Corp., Hilltop Securities, HD Vest, Stockhouse, Zacks Investment Research, General Electric, Boeing, Bombardier, Telus International, Business Wire, PR Newswire, FolioFN, Regal Securities, ChoiceTrade, Cetera Financial Group, Dynamic Trend, Inc., Qtrade Financial, CNW Group, IA Private Wealth, Ally Invest, Inc., Suncor, Virtual Brokers, Leede Jones Gable, Firstrade Securities, Charles Schwab, First Financial, Cirano, Equisolve, Stock-Trak, Mergent, Cision, Day Trade Dash and others. Quotestream®, QModTM and Quotestream ConnectTM are trademarks of QuoteMedia. For more information, please visit www.quotemedia.com .

Statements about QuoteMedia’s future expectations, including future revenue, earnings, and transactions, as well as all other statements in this press release other than historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. QuoteMedia intends that such forward-looking statements be subject to the safe harbors created thereby. These statements involve risks and uncertainties that are identified from time to time in the Company’s SEC reports and filings and are subject to change at any time. QuoteMedia’s actual results and other corporate developments could differ materially from that which has been anticipated in such statements.

Below are the specific forward-looking statements included in this press release:

• Based on those new contracts and our other clients currently under contract, we expect our revenue growth in fiscal 2022 to be comparable to the 22% annual revenue growth rate we achieved in 2021; and we expect to significantly improve upon the $212,372 net income figure reported in 2021.
  
• Additionally, because of the efforts and investments we made to improve our infrastructure, security, and business continuity management over the last year, we anticipate achieving our SOC2 Type II certification in the coming months. SOC2 certification provides independent assurance that an organization maintains a high level of information security, data integrity and business resiliency. This certification will allow QuoteMedia to make even greater gains in market share, as it is increasingly becoming a requirement for those providing services to large financial institutions.
  
• 2021 was a very good year for QuoteMedia, and 2022 looks like it may be even better.
  

QuoteMedia Investor Relations
Brendan Hopkins
Email: investors@quotemedia.com
Call: (407) 645-5295

Note 1 on Non-GAAP Financial Measures

We believe that Adjusted EBITDA, as a non-GAAP pro forma financial measure, provides meaningful information to investors in terms of enhancing their understanding of our operating performance and results, as it allows investors to more easily compare our financial performance on a consistent basis compared to the prior year periods. This non-GAAP financial measure also corresponds with the way we expect investment analysts to evaluate and compare our results. Any non-GAAP pro forma financial measures should be considered only as supplements to, and not as substitutes for or in isolation from, or superior to, our other measures of financial information prepared in accordance with GAAP, such as net income attributable to QuoteMedia, Inc.

We define and calculate Adjusted EBITDA as net income attributable to QuoteMedia, Inc., plus: 1) depreciation and amortization, 2) stock compensation expense, 3) interest expense, 4) foreign exchange loss (or minus a foreign exchange gain), and 5) income tax expense. We disclose Adjusted EBITDA because we believe it is a useful metric by which to compare the performance of our business from period to period. We understand that measures similar to Adjusted EBITDA are broadly used by analysts, rating agencies, investors and financial institutions in assessing our performance. Accordingly, we believe that the presentation of Adjusted EBITDA provides useful information to investors. The table below provides a reconciliation of Adjusted EBITDA to net income attributable to QuoteMedia, Inc., the most directly comparable GAAP financial measure.

QuoteMedia, Inc. Adjusted EBITDA Reconciliation to Net Loss

	2021				2020
Net income (loss)	$	212,372			$	(646,324	)
Depreciation and amortization		1,640,245				1,331,910
Stock-based compensation		31,876				37,872
Interest expense		2,641				4,582
Foreign exchange loss		(107,382	)			3,791
Income tax expense		3,184				2,237
PPP loan forgiveness		(133,257	)			–
Adjusted EBITDA	$	1,649,679			$	734,068

QuoteMedia Year End 2021 Financial Results and Investors’ Conference Call March 30, 2022

Research, News, and Market Data on QuoteMedia

 

PHOENIX, March 28, 2022 (GLOBE NEWSWIRE) — QuoteMedia, Inc. (OTCQB: QMCI), a leading provider of market data and financial applications, today announced that its earnings for its year ended December 31, 2021 will be released the morning of March 30, 2022. That same day, the company will host a conference call at 2:00 PM Eastern time to discuss the financial results and provide a business update.

Conference Call Details:

Date: March 30, 2022

Time: 2:00 PM Eastern

Dial-in numbers: 866-813-8713

Conference ID: QUOTEMEDIA

An audio rebroadcast of the call will be available later at: www.quotemedia.com .

About QuoteMedia

QuoteMedia is a leading software developer and cloud-based syndicator of financial market information and streaming financial data solutions to media, corporations, online brokerages, and financial services companies. The Company licenses interactive stock research tools such as streaming real-time quotes, market research, news, charting, option chains, filings, corporate financials, insider reports, market indices, portfolio management systems, and data feeds. QuoteMedia provides industry leading market data solutions and financial services for companies such as the Nasdaq Stock Exchange, TMX Group (TSX Stock Exchange), Canadian Securities Exchange (CSE), London Stock Exchange Group, FIS, U.S. Bank, Broadridge Financial Systems, JPMorgan Chase, CI Financial, Canaccord Genuity Corp., Hilltop Securities, HD Vest, Stockhouse, Zacks Investment Research, General Electric, Boeing, Bombardier, Telus International, Business Wire, PR Newswire, FolioFN, Regal Securities, ChoiceTrade, Cetera Financial Group, Dynamic Trend, Inc., Qtrade Financial, CNW Group, IA Private Wealth, Ally Invest, Inc., Suncor, Virtual Brokers, Leede Jones Gable, Firstrade Securities, Charles Schwab, First Financial, Cirano, Equisolve, Stock-Trak, Mergent, Cision, Warrior Trading and others. Quotestream®, QMod™ and Quotestream Connect™ are trademarks of QuoteMedia. For more information, please visit www.quotemedia.com .

QuoteMedia Investor Relations
Brendan Hopkins
Email: investors@quotemedia.com
Call: (407) 645-5295

QuoteMedia Year End 2021 Financial Results and Investors’ Conference Call March 30, 2022

Research, News, and Market Data on QuoteMedia

 

PHOENIX, March 28, 2022 (GLOBE NEWSWIRE) — QuoteMedia, Inc. (OTCQB: QMCI), a leading provider of market data and financial applications, today announced that its earnings for its year ended December 31, 2021 will be released the morning of March 30, 2022. That same day, the company will host a conference call at 2:00 PM Eastern time to discuss the financial results and provide a business update.

Conference Call Details:

Date: March 30, 2022

Time: 2:00 PM Eastern

Dial-in numbers: 866-813-8713

Conference ID: QUOTEMEDIA

An audio rebroadcast of the call will be available later at: www.quotemedia.com .

About QuoteMedia

QuoteMedia is a leading software developer and cloud-based syndicator of financial market information and streaming financial data solutions to media, corporations, online brokerages, and financial services companies. The Company licenses interactive stock research tools such as streaming real-time quotes, market research, news, charting, option chains, filings, corporate financials, insider reports, market indices, portfolio management systems, and data feeds. QuoteMedia provides industry leading market data solutions and financial services for companies such as the Nasdaq Stock Exchange, TMX Group (TSX Stock Exchange), Canadian Securities Exchange (CSE), London Stock Exchange Group, FIS, U.S. Bank, Broadridge Financial Systems, JPMorgan Chase, CI Financial, Canaccord Genuity Corp., Hilltop Securities, HD Vest, Stockhouse, Zacks Investment Research, General Electric, Boeing, Bombardier, Telus International, Business Wire, PR Newswire, FolioFN, Regal Securities, ChoiceTrade, Cetera Financial Group, Dynamic Trend, Inc., Qtrade Financial, CNW Group, IA Private Wealth, Ally Invest, Inc., Suncor, Virtual Brokers, Leede Jones Gable, Firstrade Securities, Charles Schwab, First Financial, Cirano, Equisolve, Stock-Trak, Mergent, Cision, Warrior Trading and others. Quotestream®, QMod™ and Quotestream Connect™ are trademarks of QuoteMedia. For more information, please visit www.quotemedia.com .

QuoteMedia Investor Relations
Brendan Hopkins
Email: investors@quotemedia.com
Call: (407) 645-5295

  Image Credit: Michael McKibben

SPACs and Potential Sellers are Successfully Thinking Outside the Box

 

A new Special Purpose Acquisition Company arrangement may open the door to more successful SPAC mergers. The deal, once completed, involves a pharmaceutical company spinning off a division, which will then be acquired by the SPAC. There are several positive aspects for the shareholders of the original company, including tax breaks, as the SPAC, which went
public in August of 2021, successfully merges with an attractive target.

The Deal

Ligand Pharmaceuticals (LGND) announced Wednesday (March 23) the spinoff of its antibody discovery technology division, OmniAb. It also announced the business would immediately merge with the Avista Public Acquisition Corp. II (AHPA). The deal values OmniAb at about $1.1 billion and would provide up to $266 million in cash to the new company. The stock of both companies responded to the announcement positively and outperformed the related market indices. Avista/AHPA will provide at least $115 million of gross cash to the combined company through a $15 million PIPE investment and a $100 million facility to backstop potential redemptions. Ligand’s $15 million contribution to OmniAb will be made irrespective of the number of redemptions or the Avista contributions.

Ligand intends to distribute 100% of the equity in OmniAb to Ligand shareholders immediately prior to the business combination with APAC. The transaction will be effected through a “Reverse Morris Trust” transaction pursuant to which OmniAb will be spun-off to Ligand’s shareholders and simultaneously merged as a subsidiary of AHPA. The transaction is expected to be tax-free to Ligand and its shareholders for U.S. federal income tax purposes, except for cash received in lieu of fractional shares. Once the transaction has closed, Ligand shareholders are expected to own approximately 75% to 84% of the combined company, depending on redemptions. It will then be Nasdaq listed under the ticker symbol “OABI”.

 

What is Reverse Morris Trust? The Reverse Morris Trust is a form of tax-avoidance employed by companies. This tactic enables the company to sell off unwanted assets without incurring tax obligations on gains arising from the sale of these assets. The Reverse Morris Trust technique works in the following manner: a parent company spins off a subsidiary to which it transfers the unwanted assets; a new, unrelated company is formed by a merger of the subsidiary with a third party company; the new company issues at least 50.1% of its voting stock (and thus, control) to the shareholders of the original parent company.

                       Source: Corporate
Finance Institute

 

Why it May Open More SPAC M&A Doors

SPAC IPOs ran at a historically high pace at the end of 2020, and the beginning of 2021. The pace seemed to have run ahead of the availability of well-suited merger targets – there just have not been enough viable companies with the desire to be acquired. Most SPACs force a merger deal to be in place within 24 months or the SPAC fails, and the remaining funds are returned to the investors. The largest risk to the investors is usually seen as opportunity cost of their cash. The risk to the SPAC’s management is that finding a suitable deal is challenging.

The nature of this pharmaceutical company deal, spin-off, Reverse Morris Trust, then merger, may inspire both potential targets and potential acquirers to think differently and shop with a newly expanded list.

 

Tax Benefits

The spin-off and acquisition is being done through a Reverse Morris Trust. Ligand benefits by saving taxes compared to selling Instead of selling an asset outright and generating a gain on sale, the asset is spun off, and then merged with a company interested in owning the asset. The shareholders of the spinoff, for tax reasons, have to end up with the majority of the merger partner’s stock. This means the spun-off asset is, essentially, the larger party, which is why the structure exists.

More Targets?

SPACs widening their sites merging with spun-off divisions provides more opportunities for them to find the ideal and willing merger candidate. Companies looking to sell productive departments may also find that negotiating with potential acquirers that include Special Purpose Acquisition Companies, could benefit all involved.

 

Paul Hoffman

Managing Editor, Channelchek

 

Suggested Reading

SPACs, Equity Research, and Bowling

SPAC Supply Provides Rare Opportunity

What Happens if Your SPAC Doesn’t Find its Ideal Acquisition?

Merger of a SPAC, the De-SPAC Phase Explained

 

Sources

https://investor.ligand.com/press-releases/detail/460/ligand-to-spin-off-its-omniab-business-through-merger-with

https://www.businesswire.com/news/home/20220323005896/en/

 

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Monday, March 21, 2022

Tokens.com Corp. (SMURF)
An Easy Way for the Public to Invest in Web 3.0

Tokens.com Corp is a Proof-of-Stake technology company that provides investors with a secure way to gain exposure to staking rewards and cryptocurrencies. It provides investors with exposure to the digital assets that power Decentralized Finance and Non-Fungible Tokens, without the burden of buying, managing, and securing digital assets themselves. The company creates value for its investors through earning Staking yields and the appreciation of its digital asset inventory, all achieved through environmentally friendly technology.

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

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

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

Initiating Coverage. We are initiating research coverage on Tokens.com Corp. Tokens.com provides investors an easy way to invest in Web 3.0 and all of its permutations, such as crypto currencies, the Metaverse, DeFi, and Play to Earn (P2E). Tokens.com is at the leading edge of the next “big thing” in the digital age and, as such, presents investors with a favorable risk/reward opportunity.

Experience in Web 3.0.  Led by CEO Andrew Kiguel, Tokens.com’s management team already possesses deep familiarity with the Web 3.0 space. Mr. Kiguel is a co-founder and former CEO of digital asset miner Hut 8 Mining. Chief NFT Officer Josh Doner is one of the first people in the world to buy an NFT on Ethereum and is a leading voice in the NFT space. We believe management’s experience in the Web 3.0 …

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. 

 

	Image Credit: Norges Bank (Flickr)

Study Highlights Ingredients that Produce the Most Persistent Portfolio Managers

 

There’s no replacement for experience. This is what a study concluded when it compared Investment fund managers varied attributes, including whether they held a Chartered Financial Analyst (CFA) designation. Even the CFAs did not shine relative to those with longer tenures as fund managers.  There are likely reasons for these findings which don’t in any way diminish the CFA designation. The designation is considered by many to be the most difficult to achieve in the financial industry. It denotes a high level of competence in understanding accounting, economics, ethics, money management, and security analysis.  The comparisons and conclusions of the study could help advisors and self-directed investors that invest all or part of their portfolios in funds.

As part of the study, researchers reviewed the careers of more than 6,000 managers. They found that those with the most persistent high performance were more often the portfolio managers with the most experience in the market. The average of those with a CFA charter did not have the same level of persistent performance as the average experienced fund manager. Bloomberg wrote about the study saying, “Fund managers with a Chartered Financial Analyst qualification are less likely to perform well over long time periods than those who haven’t taken the famously tough exams,”

 

About the CFA

Those that have earned the CFA designation have succeeded to earn one of the most difficult qualifications in finance. The pass rate last July for the lowest level of the three required tests was only
25%. The second and third level tests require even more competence and understanding of all the disciplines necessary for financial analysts. Candidates on average, study 300 hours for each level and take four years to complete the series.

About the Study

Researchers from Bayes and Cork University Business School examined 6,291 U.S. equity mutual fund managers’ careers, tracking their performance across various funds and companies as well as examining factors such as gender, qualifications, and whether the manager was invested in the fund. Previously, similar studies have looked mostly at managers’ performance while working for particular funds.

The results showed accumulated wisdom has a positive correlation with a portfolio manager’s overall skill. The data also indicates that experienced fund managers run portfolios that have lower exposure to the market, smaller individual holdings, and momentum risk factors. The Bayes and Cork University study found evidence that when a manager has a stake in a fund, they tend to have lower exposure to risk. According to the conclusions, results “identify performance persistence as being most prevalent among managers with certain characteristics, such as managers without a CFA qualification,” since correlation is not necessarily causation, it is important to note that many more finance professionals are attaining the designation to advance their careers. This may more heavily include less experienced CFA holders.  As the study points out, “Long time experience as a characteristic is particularly important in explaining many of the findings relating to persistence.” In terms of field of study, the research did find more persistence among managers who came from universities with higher entry requirements and those that earned more technical degrees like math and physics.

 

 Take-Away

What makes a good fund manager, school, gender, CFA designation, experience level, field of study? Researchers at Bayes and Cork University tracked performance against various traits including tenure, credentials, and even whether the manager was invested in the funds they managed. The one factor that appeared to impact good long-term performance was experience. The reasons for this could be that by the time you reach a certain number of years as a manager, if you weren’t average or above, you would have washed out regardless of anything else you brought to the desk.

Paul Hoffman

Managing Editor, Channelchek

 

Suggested Reading

Investing and Trading Skills

Inflation and Reflation Trade

Are the Markets Priced for the Worst-Case Scenario?

How Cathie Wood Plans to Manage Market Volatility

Sources

https://www.bloomberg.com/news/articles/2022-01-24/cfa-pass-doesn-t-spell-success-for-fund-managers-study-finds

https://www.sciencedirect.com/science/article/abs/pii/S1057521922000266?dgcid=author

https://www.cfainstitute.org/en/programs/cfa#:~:text=A%20Chartered%20Financial%20Analyst%20(CFA,portfolio%20management%2C%20and%20wealth%20planning.

 

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Wednesday, November 17, 2021

ISOS Acquisition Corp: Bowlero: Hits the Mark

Michael Kupinski, Director of Research, Noble Capital Markets, Inc.

Patrick McCann, Research Associate, Noble Capital Markets, Inc.

Refer to end of report for Analyst Certification & Disclosures

Strong quarterly results. Bowlero reported strong Q1 2022 results with total bowling center revenue of $176 million, making it the 4th highest grossing quarter in Bowlero’s history. Revenue topped the company’s target revenue of $167 million by 5%, a good start towards its FY 2022 revenue target of $817 million. Impressively, margins improved, with adj. EBITDA margin of 33.4% versus 17% in fiscal Q1 2020 (pre-pandemic). It is noteworthy that the 33.4% EBITDA margin meets the company’s Fiscal Year 2022 EBITDA margin goal of 33%.

Moving beyond the pandemic. Bowlero’s latest quarterly revenue topped Q1 fiscal 2020 (pre-pandemic) revenue by 22%. The revenue growth, coupled with improving margins, lead to adj. EBITDA growth of 140% compared with Q1 2020. In absolute terms, adj. EBITDA was $59 million in Q1 2022 versus $25 million in Q1 2020.

Roll-up continuation. In the quarter, Bowlero completed its acquisition of Bowl America, for roughly $44 million. By doing so, Bowlero added 17 bowling centers in the eastern United States. Additionally, the company added 5 other bowling centers in the quarter. The total outlay required for acquisitions in Q1 was roughly $79 million.

Right down the alley. The company beat its revenue expectations for the quarter across all three primary segments, Bowling & Shoe, Food & Beverage, and Amusement. Notably, the strong performance was in spite of historically soft seasonal lull. Moreover, the additions of nearly two dozen centers in the quarter sets up the company for attractive revenue growth for the balance of the year.

Compelling stock valuation. The implied post-merger EV/2022E EBITDA multiple for Bowlero is near 10.5x, near current levels. By comparison to a broad peer group comprised of industries such as Live Events, Leisure, Amusement, and Experiential, Bowlero shares may offer as much as 40%-60% upside. The average EV/2022E EBITDA multiple for the broad peer group is 14.1x, suggesting a $14 price target for Bowlero shares. On the other hand, when excluding the Amusement industry peer group (due to its lower growth rate compared to Bowlero), the blended multiple is 15.7x EV/2022E EBITDA, implying a $16 price target. Therefore, in taking into account both implied target multiples, a $15 price target appears reasonable.

Investment Summary

Bowlero, which plans to go public through the merger with ISOS Acquisition Corp., announced favorable fiscal first quarter results.  Q1 2022  total bowling center revenue was $176 million, making it the 4th highest grossing quarter in Bowlero’s history. Notably, this is seasonally one of the weakest quarters for the company, indicating that the fiscal year is off to a strong start. Revenue topped the company’s target revenue of $167 million by 5%, solid progress towards its FY 2022 revenue target of $817 million. Impressively, margins improved, with adj. EBITDA margin of 33.4% versus 17% in fiscal Q1 2020 (pre-pandemic). It is noteworthy that the 33.4% EBITDA margin meets the company’s Fiscal Year 2022 EBITDA margin goal of 33%. Figure #1 Fiscal Q1 illustrates the company’s strong performance with the year earlier quarter. 

Highlighting that the Covid pandemic appears largely behind the company, Bowlero’s latest quarterly revenue topped Q1 fiscal 2020 (pre-pandemic) revenue by 22%. The revenue growth, coupled with improving margins, lead to adj. EBITDA growth of 140% compared with Q1 2020. In absolute terms, adj. EBITDA was $59 million in Q1 2022 versus $25 million in Q1 2020.

Importantly, the company appears to be operating on all cylinders, beating revenue expectations across all three primary segments, Bowling & Shoe, Food & Beverage, and Amusement. Notably, the strong performance was in spite of historically soft seasonal lull. Moreover, the additions of nearly two dozen centers in the quarter sets up the company for attractive revenue growth for the balance of the year. In the quarter, Bowlero completed its acquisition of Bowl America, for roughly $44 million. By doing so, Bowlero added 17 bowling centers in the eastern United States. Additionally, the company added 5 other bowling centers in the quarter. The total outlay required for acquisitions in Q1 was roughly $79 million. 

In spite of the strong fundamentals, the ISOS shares have not reacted to the positive results. The implied post-merger EV/2022E EBITDA multiple for Bowlero is near 10.5x. As illustrated in Figure #2 Comparables, the ISOS shares trade at a steep discount to its peer gorup. By comparison to a broad peer group comprised of industries such as Live Events, Leisure, Amusement, and Experiential, Bowlero shares may offer as much as 40%-60% upside. The average EV/2022E EBITDA multiple for the broad peer group is 14.1x, suggesting a $14 price target for Bowlero shares. On the other hand, when excluding the Amusement industry peer group (due to its lower growth rate compared to Bowlero), the blended multiple is 15.7x EV/2022E EBITDA, implying a $16 price target. Therefore, in taking into account both implied target multiples, a $15 price target appears reasonable. 

Figure #1 Fiscal Q1

Figure #2 Comparables

GENERAL DISCLAIMERS

All statements or opinions contained herein that include the words “we”, “us”, or “our” are solely the responsibility of Noble Capital Markets, Inc.(“Noble”) and do not necessarily reflect statements or opinions expressed by any person or party affiliated with the company mentioned in this report. Any opinions expressed herein are subject to change without notice. All information provided herein is based on public and non-public information believed to be accurate and reliable, but is not necessarily complete and cannot be guaranteed. No judgment is hereby expressed or should be implied as to the suitability of any security described herein for any specific investor or any specific investment portfolio. The decision to undertake any investment regarding the security mentioned herein should be made by each reader of this publication based on its own appraisal of the implications and risks of such decision.

This publication is intended for information purposes only and shall not constitute an offer to buy/sell or the solicitation of an offer to buy/sell any security mentioned in this report, nor shall there be any sale of the security herein in any state or domicile in which said offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or domicile. This publication and all information, comments, statements or opinions contained or expressed herein are applicable only as of the date of this publication and subject to change without prior notice. Past performance is not indicative of future results.

Noble accepts no liability for loss arising from the use of the material in this report, except that this exclusion of liability does not apply to the extent that such liability arises under specific statutes or regulations applicable to Noble. This report is not to be relied upon as a substitute for the exercising of independent judgement. Noble may have published, and may in the future publish, other research reports that are inconsistent with, and reach different conclusions from, the information provided in this report. Noble is under no obligation to bring to the attention of any recipient of this report, any past or future reports. Investors should only consider this report as single factor in making an investment decision.

IMPORTANT DISCLOSURES

This publication is confidential for the information of the addressee only and may not be reproduced in whole or in part, copies circulated, or discussed to another party, without the written consent of Noble Capital Markets, Inc. (“Noble”). Noble seeks to update its research as appropriate, but may be unable to do so based upon various regulatory constraints. Research reports are not published at regular intervals; publication times and dates are based upon the analyst’s judgement. Noble professionals including traders, salespeople and investment bankers may provide written or oral market commentary, or discuss trading strategies to Noble clients and the Noble proprietary trading desk that reflect opinions that are contrary to the opinions expressed in this research report.

The majority of companies that Noble follows are emerging growth companies. Securities in these companies involve a higher degree of risk and more volatility than the securities of more established companies. The securities discussed in Noble research reports may not be suitable for some investors and as such, investors must take extra care and make their own determination of the appropriateness of an investment based upon risk tolerance, investment objectives and financial status.

Company Specific Disclosures

The following disclosures relate to relationships between Noble and the company (the “Company”) covered by the Noble Research Division and referred to in this research report.

Company Specific Disclosures

The following disclosures relate to relationships between Noble and the company (the “Company”) covered by the Noble Research Division and referred to in this research report.

The SPAC Company in this report is a participant in the Company Sponsored Research Program (CSRP); Noble receives compensation from the Company for such participation. No part of the CSRP compensation was, is, or will be directly or indirectly related to any specific recommendations or views expressed by the analyst in this research report.

Noble is not a market maker in any of the companies mentioned in this report. Noble intends to seek compensation for investment banking services and non-investment banking services (securities and non-securities related) with any or all of the companies mentioned in this report within the next 3 months

ANALYST CREDENTIALS, PROFESSIONAL DESIGNATIONS, AND EXPERIENCE

Director of Research. Senior Equity Analyst specializing in Media & Entertainment. 34 years of experience as an analyst. Member of the National Cable Television Society Foundation and the National Association of Broadcasters. BS in Management Science, Computer Science Certificate and MBA specializing in Finance from St. Louis University.
Named WSJ ‘Best on the Street’ Analyst six times.
FINRA licenses 7, 24, 66, 86, 87

WARNING

This report is intended to provide general securities advice, and does not purport to make any recommendation that any securities transaction is appropriate for any recipient particular investment objectives, financial situation or particular needs. Prior to making any investment decision, recipients should assess, or seek advice from their advisors, on whether any relevant part of this report is appropriate to their individual circumstances. If a recipient was referred to Noble Capital Markets, Inc. by an investment advisor, that advisor may receive a benefit in respect of transactions effected on the recipients behalf, details of which will be available on request in regard to a transaction that involves a personalized securities recommendation. Additional risks associated with the security mentioned in this report that might impede achievement of the target can be found in its initial report issued by Noble Capital Markets, Inc.. This report may not be reproduced, distributed or published for any purpose unless authorized by Noble Capital Markets, Inc.

RESEARCH ANALYST CERTIFICATION

Independence Of View
All views expressed in this report accurately reflect my personal views about the subject securities or issuers.

Receipt of Compensation
No part of my compensation was, is, or will be directly or indirectly related to any specific recommendations or views expressed in the public
appearance and/or research report.

Ownership and Material Conflicts of Interest
Neither I nor anybody in my household has a financial interest in the securities of the subject company or any other company mentioned in this report.

NOBLE RATINGS DEFINITIONS	% OF SECURITIES COVERED	% IB CLIENTS
Outperform: potential return is >15% above the current price	94%	33%
Market Perform: potential return is -15% to 15% of the current price	6%	2%
Underperform: potential return is >15% below the current price	0%	0%

NOTE: On August 20, 2018, Noble Capital Markets, Inc. changed the terminology of its ratings (as shown above) from “Buy” to “Outperform”, from “Hold” to “Market Perform” and from “Sell” to “Underperform.” The percentage relationships, as compared to current price (definitions), have remained the same.

Additional information is available upon request. Any recipient of this report that wishes further information regarding the subject company or the disclosure information mentioned herein, should contact Noble Capital Markets, Inc. by mail or phone.

Noble Capital Markets, Inc.
150 East Palmetto Park Rd., Suite 110
Boca Raton, FL 33432
561-994-1191

Noble Capital Markets, Inc. is a FINRA (Financial Industry Regulatory Authority) registered broker/dealer.
Noble Capital Markets, Inc. is an MSRB (Municipal Securities Rulemaking Board) registered broker/dealer.
Member – SIPC (Securities Investor Protection Corporation)

Report ID: 24264

Thursday, November 11, 2021

QuoteMedia Inc. (QMCI)
More Fish Appear To Be Nibbling

QuoteMedia, based in Fountain Hills, Arizona, provides cloud-based financial data, market news feeds, and financial software solutions.  Its customers include financial service companies, online brokerages, clearing firms, banks, media portals, public corporations and individual investors.  The company provides a single source solution providing products such as streaming quotes, charting, historical data, technical analysis, news and research.  Information can customized and provided to multiple platforms including terminals and mobile devices.

Michael Kupinski, Director of Research, Noble Capital Markets, Inc.

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

Close enough. Total Q3 revenue increased a solid 21.6% to $3.819 million, compared with our $3.940 million estimate. Each of the company’s segments were a hair below our estimates, with its Individual Quotestream segment having the largest variance, with revenues of $0.571 million compared with our $0.625 million estimate. Adjusted EBITDA increased a strong 99% to $540,000, slightly below our estimate of $575,000.


Gross margin expansion was deceiving.  Q3 gross margins were 46.8% compared with 45.7% in the year earlier quarter, but reflected non-recurring credits which benefited margins over 200 basis points. While gross margins should increase as revenues grow, margin expansion will be influenced by product mix. We assume base gross margins of 44% …

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. 

Published: Tuesday, November 11, 2021

Capstar Special Acquisition Corp: Updated Valuation Still Ready to Go

Gregory Aurand, Senior Research Analyst, Healthcare Services & Medical Devices, Noble Capital Markets, Inc.

Refer to end of report for Analyst Certification & Disclosures

Updated acquisition terms. Gelesis, Inc. will be brought public when they merge with publicly traded Capstar Special Acquisition Corp. (CPSR). The combination value was revised at the agreement of both companies. See Stock Overview and Valuation section in this report for updated details. The deal is expected to close late November or early December with an approximate $756 million enterprise value transaction.

No change in fundamentals. The revision in valuation consideration for the merged company does not change the fundamental projected outlook. Please see our initiation SPACtrac Report dated November 9, 2021.

An approved FDA product targeting a large population with global opportunities. The overweight and obese are at epidemic levels in the U.S. and are a growing crisis globally. Plenity is a novel FDA approved weight management aid that has an addressable market of 150 million in the U.S. alone. The initial focus will be the U.S. market but Plenity also has CE Mark enabling it to be marketed in Europe and other markets. In addition, the company has a strategic partnership to commercialize Plenity in China with potential milestones and royalties. Outside U.S. revenues are expected to contribute 30% of 2023 revenues.

Manufacturing coming on-line for full launch. Gelesis conducted a highly successful beta launch this past year. With lines of manufacturing coming on-line in late 2021 and 2022, the company is prepared to meet initial and future demand with scalable capacity. Given expected demand, the company looks to be EBITDA positive in 2023.

Valuation looks very attractive. At current levels, and based on the new enterprise value, shares trade about 1.7x Enterprise Value to 2023 guided Revenues, a substantial 50% discount to the Health & Wellness Consumer and DTC peers. If the shares were to trade in-line with the median of its peers, the revised target value would be $18 per share. As Gelesis is approaching the weight management market in a very different way, a case could be made for an expanded group of comparables that would suggest an even higher current valuation.

Stock Overview and Valuation

Given recent softness in the SPAC market seen by CPSR, and high redemptions in completed de-SPACs, both companies agreed to reduce the valuation and filed an amendment updating the terms.  The updated valuation reflects a lower total share count, lower enterprise value and a lower upfront percentage ownership by existing Gelesis shareholders. While upfront valuation is lower, existing Gelesis holders see an increase in earn-out shares.

As indicated in Figure #1 below, the prior pro forma valuation translated into an 8% ownership of the new company for the PIPE investors. The PIPE investors include PIMCO, Pritzker Vlock Family Office, Chinese Medical Systems and co-founder PureTech Health. The $276 million held-in-trust provided from Capstar public holders translated into a 20% ownership and Capstar Sponsors would have owned about 4% of the company.  Gelesis shareholders had about 69% of the new company with 131.8 million shares and a $964 million enterprise value valuation. 

Figure #1 Prior pro forma valuation

Source: Company reports and Noble Research estimates

Figure #2 below shows the updated pro forma ownership with an enterprise value of $756 million.  The PIPE investors will now have a slightly increased 8% stake in the new company, the Capstar public holders with $276 million held-in-trust will have a 24% ownership, and Capstar Sponsors retain a 4% ownership.  Gelesis holders, given the lower number of stock consideration shares will now have an upfront 64% stake.

Figure #2 Revised pro forma valuation

Source: Company reports and Noble Research estimates

As part of the revised transaction, and substantially offsetting the lower upfront share valuation for Gelesis holders, the earn-out shares were increased (Figure #3). Rather than the prior 15 million shares in 5 million share earn-out increments issued to existing Gelesis shareholders when the stock price reaches $12.50, $15.00, and $17.50 per share, the new earn-out shares are equal installments of 7.83 million shares at the same stock price points for a total of 23.48 million shares.

Figure #3 Increased earn-out shares

Source: Company reports and Noble Research estimates

Total share consideration for the deal was formerly 146.8 million including the 15 million earn-out shares, and is now 134.48 million shares including the 23.48 million earn-out shares.

The newly formed company, as indicated in the previous report, is expected to be listed on the NYSE and trade under the ticker “GLS”.  Based on the new valuation consideration, there will be an estimated 111 million shares outstanding following the combination with CPSR.

The following Figure #4 provides an extensive list of health and wellness peer comparables, and an expanded list incorporating disruptive healthcare and consumer subscription companies.  The valuations provided for CPSR/Gelesis are based on the guided revenues and cash provided.  At current levels, shares trade about 1.7x Enterprise Value to 2023 guided Revenues, a substantial 50% discount to the median Health & Wellness Consumer and DTC peers (excluding INMD outlier). If the shares were to trade in-line with the median of its peers, the target value would be $18.00 per share.  If shares traded at the mean of its peers, the target value would be $23.00. As Gelesis is marketing to the weight management market in a very different and disruptive approach, a case could be made for using the expanded group of Disruptive Healthcare and Consumer Subscription comparables that would suggest an even higher current valuation.

Figure #4 Valuation comparables

GENERAL DISCLAIMERS

All statements or opinions contained herein that include the words “we”, “us”, or “our” are solely the responsibility of Noble Capital Markets, Inc.(“Noble”) and do not necessarily reflect statements or opinions expressed by any person or party affiliated with the company mentioned in this report. Any opinions expressed herein are subject to change without notice. All information provided herein is based on public and non-public information believed to be accurate and reliable, but is not necessarily complete and cannot be guaranteed. No judgment is hereby expressed or should be implied as to the suitability of any security described herein for any specific investor or any specific investment portfolio. The decision to undertake any investment regarding the security mentioned herein should be made by each reader of this publication based on its own appraisal of the implications and risks of such decision.

This publication is intended for information purposes only and shall not constitute an offer to buy/sell or the solicitation of an offer to buy/sell any security mentioned in this report, nor shall there be any sale of the security herein in any state or domicile in which said offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or domicile. This publication and all information, comments, statements or opinions contained or expressed herein are applicable only as of the date of this publication and subject to change without prior notice. Past performance is not indicative of future results.

Noble accepts no liability for loss arising from the use of the material in this report, except that this exclusion of liability does not apply to the extent that such liability arises under specific statutes or regulations applicable to Noble. This report is not to be relied upon as a substitute for the exercising of independent judgement. Noble may have published, and may in the future publish, other research reports that are inconsistent with, and reach different conclusions from, the information provided in this report. Noble is under no obligation to bring to the attention of any recipient of this report, any past or future reports. Investors should only consider this report as single factor in making an investment decision.

IMPORTANT DISCLOSURES

This publication is confidential for the information of the addressee only and may not be reproduced in whole or in part, copies circulated, or discussed to another party, without the written consent of Noble Capital Markets, Inc. (“Noble”). Noble seeks to update its research as appropriate, but may be unable to do so based upon various regulatory constraints. Research reports are not published at regular intervals; publication times and dates are based upon the analyst’s judgement. Noble professionals including traders, salespeople and investment bankers may provide written or oral market commentary, or discuss trading strategies to Noble clients and the Noble proprietary trading desk that reflect opinions that are contrary to the opinions expressed in this research report.

The majority of companies that Noble follows are emerging growth companies. Securities in these companies involve a higher degree of risk and more volatility than the securities of more established companies. The securities discussed in Noble research reports may not be suitable for some investors and as such, investors must take extra care and make their own determination of the appropriateness of an investment based upon risk tolerance, investment objectives and financial status.

Company Specific Disclosures

The following disclosures relate to relationships between Noble and the company (the “Company”) covered by the Noble Research Division and referred to in this research report.

Company Specific Disclosures

The following disclosures relate to relationships between Noble and the company (the “Company”) covered by the Noble Research Division and referred to in this research report.

The SPAC Company in this report is a participant in the Company Sponsored Research Program (CSRP); Noble receives compensation from the Company for such participation. No part of the CSRP compensation was, is, or will be directly or indirectly related to any specific recommendations or views expressed by the analyst in this research report.

Noble is not a market maker in any of the companies mentioned in this report. Noble intends to seek compensation for investment banking services and non-investment banking services (securities and non-securities related) with any or all of the companies mentioned in this report within the next 3 months

WARNING

This report is intended to provide general securities advice, and does not purport to make any recommendation that any securities transaction is appropriate for any recipient particular investment objectives, financial situation or particular needs. Prior to making any investment decision, recipients should assess, or seek advice from their advisors, on whether any relevant part of this report is appropriate to their individual circumstances. If a recipient was referred to Noble Capital Markets, Inc. by an investment advisor, that advisor may receive a benefit in respect of transactions effected on the recipients behalf, details of which will be available on request in regard to a transaction that involves a personalized securities recommendation. Additional risks associated with the security mentioned in this report that might impede achievement of the target can be found in its initial report issued by Noble Capital Markets, Inc.. This report may not be reproduced, distributed or published for any purpose unless authorized by Noble Capital Markets, Inc.

RESEARCH ANALYST CERTIFICATION

Independence Of View
All views expressed in this report accurately reflect my personal views about the subject securities or issuers.

Receipt of Compensation
No part of my compensation was, is, or will be directly or indirectly related to any specific recommendations or views expressed in the public
appearance and/or research report.

Ownership and Material Conflicts of Interest
Neither I nor anybody in my household has a financial interest in the securities of the subject company or any other company mentioned in this report.

NOBLE RATINGS DEFINITIONS	% OF SECURITIES COVERED	% IB CLIENTS
Outperform: potential return is >15% above the current price	95%	33%
Market Perform: potential return is -15% to 15% of the current price	5%	2%
Underperform: potential return is >15% below the current price	0%	0%

NOTE: On August 20, 2018, Noble Capital Markets, Inc. changed the terminology of its ratings (as shown above) from “Buy” to “Outperform”, from “Hold” to “Market Perform” and from “Sell” to “Underperform.” The percentage relationships, as compared to current price (definitions), have remained the same.

Additional information is available upon request. Any recipient of this report that wishes further information regarding the subject company or the disclosure information mentioned herein, should contact Noble Capital Markets, Inc. by mail or phone.

Noble Capital Markets, Inc.
150 East Palmetto Park Rd., Suite 110
Boca Raton, FL 33432
561-994-1191

Noble Capital Markets, Inc. is a FINRA (Financial Industry Regulatory Authority) registered broker/dealer.
Noble Capital Markets, Inc. is an MSRB (Municipal Securities Rulemaking Board) registered broker/dealer.
Member – SIPC (Securities Investor Protection Corporation)

Report ID: 24235

Published: Tuesday, November 11, 2021

Capstar Special Acquisition Corp: Updated Valuation Still Ready to Go

Gregory Aurand, Senior Research Analyst, Healthcare Services & Medical Devices, Noble Capital Markets, Inc.

Refer to end of report for Analyst Certification & Disclosures

Updated acquisition terms. Gelesis, Inc. will be brought public when they merge with publicly traded Capstar Special Acquisition Corp. (CPSR). The combination value was revised at the agreement of both companies. See Stock Overview and Valuation section in this report for updated details. The deal is expected to close late November or early December with an approximate $756 million enterprise value transaction.

No change in fundamentals. The revision in valuation consideration for the merged company does not change the fundamental projected outlook. Please see our initiation SPACtrac Report dated November 9, 2021.

An approved FDA product targeting a large population with global opportunities. The overweight and obese are at epidemic levels in the U.S. and are a growing crisis globally. Plenity is a novel FDA approved weight management aid that has an addressable market of 150 million in the U.S. alone. The initial focus will be the U.S. market but Plenity also has CE Mark enabling it to be marketed in Europe and other markets. In addition, the company has a strategic partnership to commercialize Plenity in China with potential milestones and royalties. Outside U.S. revenues are expected to contribute 30% of 2023 revenues.

Manufacturing coming on-line for full launch. Gelesis conducted a highly successful beta launch this past year. With lines of manufacturing coming on-line in late 2021 and 2022, the company is prepared to meet initial and future demand with scalable capacity. Given expected demand, the company looks to be EBITDA positive in 2023.

Valuation looks very attractive. At current levels, and based on the new enterprise value, shares trade about 1.7x Enterprise Value to 2023 guided Revenues, a substantial 50% discount to the Health & Wellness Consumer and DTC peers. If the shares were to trade in-line with the median of its peers, the revised target value would be $18 per share. As Gelesis is approaching the weight management market in a very different way, a case could be made for an expanded group of comparables that would suggest an even higher current valuation.

Stock Overview and Valuation

Given recent softness in the SPAC market seen by CPSR, and high redemptions in completed de-SPACs, both companies agreed to reduce the valuation and filed an amendment updating the terms.  The updated valuation reflects a lower total share count, lower enterprise value and a lower upfront percentage ownership by existing Gelesis shareholders. While upfront valuation is lower, existing Gelesis holders see an increase in earn-out shares.

As indicated in Figure #1 below, the prior pro forma valuation translated into an 8% ownership of the new company for the PIPE investors. The PIPE investors include PIMCO, Pritzker Vlock Family Office, Chinese Medical Systems and co-founder PureTech Health. The $276 million held-in-trust provided from Capstar public holders translated into a 20% ownership and Capstar Sponsors would have owned about 4% of the company.  Gelesis shareholders had about 69% of the new company with 131.8 million shares and a $964 million enterprise value valuation. 

Figure #1 Prior pro forma valuation

Source: Company reports and Noble Research estimates

Figure #2 below shows the updated pro forma ownership with an enterprise value of $756 million.  The PIPE investors will now have a slightly increased 8% stake in the new company, the Capstar public holders with $276 million held-in-trust will have a 24% ownership, and Capstar Sponsors retain a 4% ownership.  Gelesis holders, given the lower number of stock consideration shares will now have an upfront 64% stake.

Figure #2 Revised pro forma valuation

Source: Company reports and Noble Research estimates

As part of the revised transaction, and substantially offsetting the lower upfront share valuation for Gelesis holders, the earn-out shares were increased (Figure #3). Rather than the prior 15 million shares in 5 million share earn-out increments issued to existing Gelesis shareholders when the stock price reaches $12.50, $15.00, and $17.50 per share, the new earn-out shares are equal installments of 7.83 million shares at the same stock price points for a total of 23.48 million shares.

Figure #3 Increased earn-out shares

Source: Company reports and Noble Research estimates

Total share consideration for the deal was formerly 146.8 million including the 15 million earn-out shares, and is now 134.48 million shares including the 23.48 million earn-out shares.

The newly formed company, as indicated in the previous report, is expected to be listed on the NYSE and trade under the ticker “GLS”.  Based on the new valuation consideration, there will be an estimated 111 million shares outstanding following the combination with CPSR.

The following Figure #4 provides an extensive list of health and wellness peer comparables, and an expanded list incorporating disruptive healthcare and consumer subscription companies.  The valuations provided for CPSR/Gelesis are based on the guided revenues and cash provided.  At current levels, shares trade about 1.7x Enterprise Value to 2023 guided Revenues, a substantial 50% discount to the median Health & Wellness Consumer and DTC peers (excluding INMD outlier). If the shares were to trade in-line with the median of its peers, the target value would be $18.00 per share.  If shares traded at the mean of its peers, the target value would be $23.00. As Gelesis is marketing to the weight management market in a very different and disruptive approach, a case could be made for using the expanded group of Disruptive Healthcare and Consumer Subscription comparables that would suggest an even higher current valuation.

Figure #4 Valuation comparables

GENERAL DISCLAIMERS

All statements or opinions contained herein that include the words “we”, “us”, or “our” are solely the responsibility of Noble Capital Markets, Inc.(“Noble”) and do not necessarily reflect statements or opinions expressed by any person or party affiliated with the company mentioned in this report. Any opinions expressed herein are subject to change without notice. All information provided herein is based on public and non-public information believed to be accurate and reliable, but is not necessarily complete and cannot be guaranteed. No judgment is hereby expressed or should be implied as to the suitability of any security described herein for any specific investor or any specific investment portfolio. The decision to undertake any investment regarding the security mentioned herein should be made by each reader of this publication based on its own appraisal of the implications and risks of such decision.

This publication is intended for information purposes only and shall not constitute an offer to buy/sell or the solicitation of an offer to buy/sell any security mentioned in this report, nor shall there be any sale of the security herein in any state or domicile in which said offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or domicile. This publication and all information, comments, statements or opinions contained or expressed herein are applicable only as of the date of this publication and subject to change without prior notice. Past performance is not indicative of future results.

Noble accepts no liability for loss arising from the use of the material in this report, except that this exclusion of liability does not apply to the extent that such liability arises under specific statutes or regulations applicable to Noble. This report is not to be relied upon as a substitute for the exercising of independent judgement. Noble may have published, and may in the future publish, other research reports that are inconsistent with, and reach different conclusions from, the information provided in this report. Noble is under no obligation to bring to the attention of any recipient of this report, any past or future reports. Investors should only consider this report as single factor in making an investment decision.

IMPORTANT DISCLOSURES

This publication is confidential for the information of the addressee only and may not be reproduced in whole or in part, copies circulated, or discussed to another party, without the written consent of Noble Capital Markets, Inc. (“Noble”). Noble seeks to update its research as appropriate, but may be unable to do so based upon various regulatory constraints. Research reports are not published at regular intervals; publication times and dates are based upon the analyst’s judgement. Noble professionals including traders, salespeople and investment bankers may provide written or oral market commentary, or discuss trading strategies to Noble clients and the Noble proprietary trading desk that reflect opinions that are contrary to the opinions expressed in this research report.

The majority of companies that Noble follows are emerging growth companies. Securities in these companies involve a higher degree of risk and more volatility than the securities of more established companies. The securities discussed in Noble research reports may not be suitable for some investors and as such, investors must take extra care and make their own determination of the appropriateness of an investment based upon risk tolerance, investment objectives and financial status.

Company Specific Disclosures

The following disclosures relate to relationships between Noble and the company (the “Company”) covered by the Noble Research Division and referred to in this research report.

Company Specific Disclosures

The following disclosures relate to relationships between Noble and the company (the “Company”) covered by the Noble Research Division and referred to in this research report.

The SPAC Company in this report is a participant in the Company Sponsored Research Program (CSRP); Noble receives compensation from the Company for such participation. No part of the CSRP compensation was, is, or will be directly or indirectly related to any specific recommendations or views expressed by the analyst in this research report.

Noble is not a market maker in any of the companies mentioned in this report. Noble intends to seek compensation for investment banking services and non-investment banking services (securities and non-securities related) with any or all of the companies mentioned in this report within the next 3 months

WARNING

This report is intended to provide general securities advice, and does not purport to make any recommendation that any securities transaction is appropriate for any recipient particular investment objectives, financial situation or particular needs. Prior to making any investment decision, recipients should assess, or seek advice from their advisors, on whether any relevant part of this report is appropriate to their individual circumstances. If a recipient was referred to Noble Capital Markets, Inc. by an investment advisor, that advisor may receive a benefit in respect of transactions effected on the recipients behalf, details of which will be available on request in regard to a transaction that involves a personalized securities recommendation. Additional risks associated with the security mentioned in this report that might impede achievement of the target can be found in its initial report issued by Noble Capital Markets, Inc.. This report may not be reproduced, distributed or published for any purpose unless authorized by Noble Capital Markets, Inc.

RESEARCH ANALYST CERTIFICATION

Independence Of View
All views expressed in this report accurately reflect my personal views about the subject securities or issuers.

Receipt of Compensation
No part of my compensation was, is, or will be directly or indirectly related to any specific recommendations or views expressed in the public
appearance and/or research report.

Ownership and Material Conflicts of Interest
Neither I nor anybody in my household has a financial interest in the securities of the subject company or any other company mentioned in this report.

NOBLE RATINGS DEFINITIONS	% OF SECURITIES COVERED	% IB CLIENTS
Outperform: potential return is >15% above the current price	95%	33%
Market Perform: potential return is -15% to 15% of the current price	5%	2%
Underperform: potential return is >15% below the current price	0%	0%

NOTE: On August 20, 2018, Noble Capital Markets, Inc. changed the terminology of its ratings (as shown above) from “Buy” to “Outperform”, from “Hold” to “Market Perform” and from “Sell” to “Underperform.” The percentage relationships, as compared to current price (definitions), have remained the same.

Additional information is available upon request. Any recipient of this report that wishes further information regarding the subject company or the disclosure information mentioned herein, should contact Noble Capital Markets, Inc. by mail or phone.

Noble Capital Markets, Inc.
150 East Palmetto Park Rd., Suite 110
Boca Raton, FL 33432
561-994-1191

Noble Capital Markets, Inc. is a FINRA (Financial Industry Regulatory Authority) registered broker/dealer.
Noble Capital Markets, Inc. is an MSRB (Municipal Securities Rulemaking Board) registered broker/dealer.
Member – SIPC (Securities Investor Protection Corporation)

Report ID: 24235

QuoteMedia Announces 22% Revenue Growth for Q3 2021

 

PHOENIX, Nov. 10, 2021 (GLOBE NEWSWIRE) — QuoteMedia, Inc. (OTCQB: QMCI), a leading provider of market data and financial applications, announced financial results for the quarter ended September 30, 2021.

QuoteMedia provides banks, brokerage firms, private equity firms, financial planners and sophisticated investors with a more economical, higher quality alternative source of stock market data and related research information. We compete with several larger legacy organizations and a modest community of other smaller companies. QuoteMedia provides comprehensive market data services, including streaming data feeds, on-demand request-based data (XML/JSON), web content solutions (financial content for website integration) and applications such as Quotestream Professional desktop and mobile.

Highlights for Q3 2021 include the following:

• Quarterly revenue increased to $3,818,713 in Q3 2021 from $3,140,358 in Q3 2020, a year over year increase of 22%.
• Revenue for the nine-month period ended September 30, 2021 increased to $11,257,949 compared to $9,136,141 in same 2020 period, an increase of 23%.
• Our net income for Q3 2021 was $154,931 compared to a net loss of $75,305 in Q3 2020.
• Adjusted EBITDA for Q3 2021 was $539,534 compared to $271,091 in Q3 2020.

“We are very pleased with our performance”, said Robert J. Thompson, Chairman of the Board. “We experienced very strong revenue growth, both for the quarter and year to date, and we are expecting to finish the year strong. We are continuing to expand our product offerings, grow our market share and explore exciting new opportunities. This is an exciting time for our company, and the future certainly looks bright.”

QuoteMedia will host a conference call Wednesday, November 10, 2021 at 2:00 PM Eastern Time to discuss the Q3 2021 financial results and provide a business update.

Conference Call Details:

Date: November 10, 2021

Time: 2:00 PM Eastern

Dial-in number: 877?876?9176

Conference ID: QUOTEMEDIA

An audio rebroadcast of the call will be available later at: www.quotemedia.com

About QuoteMedia

QuoteMedia is a leading software developer and cloud-based syndicator of financial market information and streaming financial data solutions to media, corporations, online brokerages, and financial services companies. The Company licenses interactive stock research tools such as streaming real-time quotes, market research, news, charting, option chains, filings, corporate financials, insider reports, market indices, portfolio management systems, and data feeds. QuoteMedia provides industry leading market data solutions and financial services for companies such as the Nasdaq Stock Exchange, TMX Group (TSX Stock Exchange), Canadian Securities Exchange (CSE), London Stock Exchange Group, FIS, U.S. Bank, Broadridge Financial Systems, JPMorgan Chase, CI Financial, Canaccord Genuity Corp., Hilltop Securities, HD Vest, Stockhouse, Zacks Investment Research, General Electric, Boeing, Bombardier, Telus International, Business Wire, PR Newswire, FolioFN, Regal Securities, ChoiceTrade, Cetera Financial Group, Dynamic Trend, Inc., Qtrade Financial, CNW Group, IA Private Wealth, Ally Invest, Inc., Suncor, Virtual Brokers, Leede Jones Gable, Firstrade Securities, Charles Schwab, First Financial, Cirano, Equisolve, Stock-Trak, Mergent, Cision, Warrior Trading and others. Quotestream®, QMod™ and Quotestream Connect™ are trademarks of QuoteMedia. For more information, please visit www.quotemedia.com.

Statements about QuoteMedia’s future expectations, including future revenue, earnings, and transactions, as well as all other statements in this press release other than historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. QuoteMedia intends that such forward-looking statements be subject to the safe harbors created thereby. These statements involve risks and uncertainties that are identified from time to time in the Company’s SEC reports and filings and are subject to change at any time. QuoteMedia’s actual results and other corporate developments could differ materially from that which has been anticipated in such statements.

Below are the specific forward-looking statements included in this press release:

• We experienced very strong revenue growth, both for the quarter and year to date, and we are expecting to finish the year strong. We are continuing to expand our product offerings, grow our market share and explore exciting new opportunities. This is an exciting time for our company, and the future certainly looks bright

QuoteMedia Investor Relations
Brendan Hopkins
Email: investors@quotemedia.com
Call: (407) 645-5295

Note 1 on Non-GAAP Financial Measures

We believe that Adjusted EBITDA, as a non-GAAP pro forma financial measure, provides meaningful information to investors in terms of enhancing their understanding of our operating performance and results, as it allows investors to more easily compare our financial performance on a consistent basis compared to the prior year periods. This non-GAAP financial measure also corresponds with the way we expect investment analysts to evaluate and compare our results. Any non-GAAP pro forma financial measures should be considered only as supplements to, and not as substitutes for or in isolation from, or superior to, our other measures of financial information prepared in accordance with GAAP, such as net income attributable to QuoteMedia, Inc.

We define and calculate Adjusted EBITDA as net income attributable to QuoteMedia, Inc., plus: 1) depreciation and amortization, 2) stock compensation expense, 3) interest expense, 4) foreign exchange loss (or minus a foreign exchange gain), and 5) income tax expense. We disclose Adjusted EBITDA because we believe it is a useful metric by which to compare the performance of our business from period to period. We understand that measures similar to Adjusted EBITDA are broadly used by analysts, rating agencies, investors and financial institutions in assessing our performance. Accordingly, we believe that the presentation of Adjusted EBITDA provides useful information to investors. The table below provides a reconciliation of Adjusted EBITDA to net income attributable to QuoteMedia, Inc., the most directly comparable GAAP financial measure.

Quotemedia, Inc. Adjusted EBITDA Reconciliations to Net Income (Loss)

		Three-months ended September 30,								Nine-months ended September 30,
		2021				2020				2021				2020
Net income (loss)		$	154,931			$	(75,305	)		$	98,393			$	(319,728	)
Depreciation and amortization			432,051				343,935				1,182,917				971,274
Stock-based compensation			6,939				6,939				20,817				30,933
Interest expense			101				701				1,560				3,419
Foreign exchange loss (gain)			(55,278	)			(5,930	)			(77,606	)			(11,887	)
Income tax expense			790				751				2,403				2,216
PPP loan forgiveness			–				–				(133,257	)			–
Adjusted EBITDA		$	539,534			$	271,091			$	1,095,227			$	676,227

QuoteMedia Announces 22% Revenue Growth for Q3 2021

 

PHOENIX, Nov. 10, 2021 (GLOBE NEWSWIRE) — QuoteMedia, Inc. (OTCQB: QMCI), a leading provider of market data and financial applications, announced financial results for the quarter ended September 30, 2021.

QuoteMedia provides banks, brokerage firms, private equity firms, financial planners and sophisticated investors with a more economical, higher quality alternative source of stock market data and related research information. We compete with several larger legacy organizations and a modest community of other smaller companies. QuoteMedia provides comprehensive market data services, including streaming data feeds, on-demand request-based data (XML/JSON), web content solutions (financial content for website integration) and applications such as Quotestream Professional desktop and mobile.

Highlights for Q3 2021 include the following:

• Quarterly revenue increased to $3,818,713 in Q3 2021 from $3,140,358 in Q3 2020, a year over year increase of 22%.
• Revenue for the nine-month period ended September 30, 2021 increased to $11,257,949 compared to $9,136,141 in same 2020 period, an increase of 23%.
• Our net income for Q3 2021 was $154,931 compared to a net loss of $75,305 in Q3 2020.
• Adjusted EBITDA for Q3 2021 was $539,534 compared to $271,091 in Q3 2020.

“We are very pleased with our performance”, said Robert J. Thompson, Chairman of the Board. “We experienced very strong revenue growth, both for the quarter and year to date, and we are expecting to finish the year strong. We are continuing to expand our product offerings, grow our market share and explore exciting new opportunities. This is an exciting time for our company, and the future certainly looks bright.”

QuoteMedia will host a conference call Wednesday, November 10, 2021 at 2:00 PM Eastern Time to discuss the Q3 2021 financial results and provide a business update.

Conference Call Details:

Date: November 10, 2021

Time: 2:00 PM Eastern

Dial-in number: 877?876?9176

Conference ID: QUOTEMEDIA

An audio rebroadcast of the call will be available later at: www.quotemedia.com

About QuoteMedia

QuoteMedia is a leading software developer and cloud-based syndicator of financial market information and streaming financial data solutions to media, corporations, online brokerages, and financial services companies. The Company licenses interactive stock research tools such as streaming real-time quotes, market research, news, charting, option chains, filings, corporate financials, insider reports, market indices, portfolio management systems, and data feeds. QuoteMedia provides industry leading market data solutions and financial services for companies such as the Nasdaq Stock Exchange, TMX Group (TSX Stock Exchange), Canadian Securities Exchange (CSE), London Stock Exchange Group, FIS, U.S. Bank, Broadridge Financial Systems, JPMorgan Chase, CI Financial, Canaccord Genuity Corp., Hilltop Securities, HD Vest, Stockhouse, Zacks Investment Research, General Electric, Boeing, Bombardier, Telus International, Business Wire, PR Newswire, FolioFN, Regal Securities, ChoiceTrade, Cetera Financial Group, Dynamic Trend, Inc., Qtrade Financial, CNW Group, IA Private Wealth, Ally Invest, Inc., Suncor, Virtual Brokers, Leede Jones Gable, Firstrade Securities, Charles Schwab, First Financial, Cirano, Equisolve, Stock-Trak, Mergent, Cision, Warrior Trading and others. Quotestream®, QMod™ and Quotestream Connect™ are trademarks of QuoteMedia. For more information, please visit www.quotemedia.com.

Statements about QuoteMedia’s future expectations, including future revenue, earnings, and transactions, as well as all other statements in this press release other than historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. QuoteMedia intends that such forward-looking statements be subject to the safe harbors created thereby. These statements involve risks and uncertainties that are identified from time to time in the Company’s SEC reports and filings and are subject to change at any time. QuoteMedia’s actual results and other corporate developments could differ materially from that which has been anticipated in such statements.

Below are the specific forward-looking statements included in this press release:

• We experienced very strong revenue growth, both for the quarter and year to date, and we are expecting to finish the year strong. We are continuing to expand our product offerings, grow our market share and explore exciting new opportunities. This is an exciting time for our company, and the future certainly looks bright

QuoteMedia Investor Relations
Brendan Hopkins
Email: investors@quotemedia.com
Call: (407) 645-5295

Note 1 on Non-GAAP Financial Measures

We believe that Adjusted EBITDA, as a non-GAAP pro forma financial measure, provides meaningful information to investors in terms of enhancing their understanding of our operating performance and results, as it allows investors to more easily compare our financial performance on a consistent basis compared to the prior year periods. This non-GAAP financial measure also corresponds with the way we expect investment analysts to evaluate and compare our results. Any non-GAAP pro forma financial measures should be considered only as supplements to, and not as substitutes for or in isolation from, or superior to, our other measures of financial information prepared in accordance with GAAP, such as net income attributable to QuoteMedia, Inc.

We define and calculate Adjusted EBITDA as net income attributable to QuoteMedia, Inc., plus: 1) depreciation and amortization, 2) stock compensation expense, 3) interest expense, 4) foreign exchange loss (or minus a foreign exchange gain), and 5) income tax expense. We disclose Adjusted EBITDA because we believe it is a useful metric by which to compare the performance of our business from period to period. We understand that measures similar to Adjusted EBITDA are broadly used by analysts, rating agencies, investors and financial institutions in assessing our performance. Accordingly, we believe that the presentation of Adjusted EBITDA provides useful information to investors. The table below provides a reconciliation of Adjusted EBITDA to net income attributable to QuoteMedia, Inc., the most directly comparable GAAP financial measure.

Quotemedia, Inc. Adjusted EBITDA Reconciliations to Net Income (Loss)

		Three-months ended September 30,								Nine-months ended September 30,
		2021				2020				2021				2020
Net income (loss)		$	154,931			$	(75,305	)		$	98,393			$	(319,728	)
Depreciation and amortization			432,051				343,935				1,182,917				971,274
Stock-based compensation			6,939				6,939				20,817				30,933
Interest expense			101				701				1,560				3,419
Foreign exchange loss (gain)			(55,278	)			(5,930	)			(77,606	)			(11,887	)
Income tax expense			790				751				2,403				2,216
PPP loan forgiveness			–				–				(133,257	)			–
Adjusted EBITDA		$	539,534			$	271,091			$	1,095,227			$	676,227