Vera Bradley (VRA) – Shares in the Discount Bin; Initiating Coverage with An Outperform Rating

Thursday, June 16, 2022

Vera Bradley (VRA)
Shares in the Discount Bin; Initiating Coverage with An Outperform Rating

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 Vera Bradley, Inc. with an Outperform rating and an $8.00 12-month price target. Vera Bradley is the owner of two unique lifestyle brands. With the recent overall market sell-off, VRA shares are selling at all-time lows, outside of the COVID induced panic in mid-2020. With significant organic and inorganic growth opportunities, we believe VRA shares present an attractive risk/reward situation.

The Brands. The iconic Vera Bradley brand is a leading designer of women’s handbags, luggage and other travel items, fashion and home accessories, and unique gifts. The Company operates through a network of retail, wholesale and e-commerce sites. Pura Vida is is a rapidly growing, digitally native lifestyle brand. The Pura Vida brand has a differentiated and expanding offering of bracelets, jewelry, and other lifestyle accessories….

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. 

Cannabis Tourist Destinations Growing


Image Credit: Teodor Savin (Pexels)


Cannabis Tourism: How a New Travel Trend is Taking Off

Legal cannabis consumption rose in the US and Europe during the COVID pandemic, with some people turning to marijuana to help them cope with lockdowns and broken routines. Meanwhile, fewer people today view the drug as harmful compared to previous decades.

These factors may have contributed to a trend toward cannabis-related tourism, with destinations developing new holiday products to tempt customers and rising travel bookings to destinations where cannabis is legal. But there are risks for both destinations and tourists in embracing this trend.

Work by MMGY Travel Intelligence found that 29% of leisure travelers are interested in cannabis-related tourism. A study by the Dutch government revealed that 58% of international tourists choose Amsterdam in order to consume drugs. And business in Dutch coffee shops has increased since the start of the pandemic.

Nine months after Illinois legalized recreational cannabis in January 2020, nearly 30% of purchases were by non-residents. Thailand has just announced it has legalized cannabis and is hoping this will boost tourism.

The tourism sector and specific destinations have reacted quickly to the demand for cannabis, hemp, and CBD-related products by designing experiences that include those elements. They are also responding to the expected economic potential related to increased hotel occupancy, tax revenues, increased land values, business expansion, jobs, and public health and safety benefits that could be connected to cannabis sales.

Yet, although tourism to other destinations with legalized cannabis is growing in popularity, data is only beginning to be collected. And so far, no destination is ready to be labeled as the “next Amsterdam”.

Big Potential

While cannabis-related travelers are believed to be high-spending and well-educated, authorities don’t want to replicate the Dutch model, which led to a massive concentration of cannabis coffee shops in Amsterdam and raised concerns over hard drug use and criminality.

New business models are focusing on agri-tourism (meet-the-farmer sessions) and culinary tourism, and events such as cannabis festivals. Tourists can choose from farm tours, “bud and breakfast” hotels, city tours, cannabis festivals, cannabis trails, food, wine and marijuana pairings, “ganja yoga,” and packages that combine accommodation and cannabis experiences.

The potential for cannabis tourism is widespread around the world. More than 19 US states and Washington DC have now legalized recreational cannabis, along with Canada, Mexico, Uruguay, and others. In Europe, Luxembourg allows the consumption of personally cultivated cannabis, while Switzerland is trialing cannabis sales from pharmacies for recreational purposes.

Malaysia and Thailand have made initial steps toward legalizing recreational use. Costa Rica and Morocco have also approved legalization for medicinal purposes.

Risks for Tourists

However, few countries have clarified the legality of cannabis use by tourists with legislation directed at recreational use by residents. This means tourists risk breaking the law unintentionally by interacting with street dealers and police as well as the health implications of consuming real and fake drugs.

There is some evidence cannabis can improve some mental health conditions and provide pain relief. But tourists with pre-existing mental health disorders, for example, may risk their physical and psychological wellbeing. Cannabis-related mental health events, including depression, can also occur among those who have not been diagnosed with mental health issues.

A patchwork of complicated laws and regulations regarding recreational cannabis use by overseas tourists means questions remain about the legality of consumption, the transport of cannabis vape pens overseas as well as issues of insurance cover and health care during and after travel.

While Uruguay is planning to allow consumption by tourists, countries like Portugal, where cannabis has been decriminalized since 2001, still doesn’t allow them to buy it legally. In Spain, cannabis clubs allow visitors to donate to the club instead of purchasing a product. But Spain and other large markets like South Africa are focused on domestic cannabis tourism rather than international visitors.

Few countries have carried out a cost-benefit analysis around legal cannabis and tourism or fully discussed issues of land and water use, police powers, and benefits to local communities. While cannabis tourism can generate tourism and jobs, and reduce the power of organized crime, the goal of sustainable development is threatened by theft, racism, and a market stacked against small local operators who often can not secure funding or insurance. There are also possible increases in pollution and public health and safety concerns.

Mexico and Canada have promised funding for indigenously owned businesses to aid social and racial equality, while New York plans to create a US$200 million (£162 million) public-private fund to support social equity goals. Resident support and continual conversations with communities on how to plan the sustainable development of cannabis tourism should be a vital part of the development of the sector.

While it appears that the COVID pandemic helped stimulate and legitimize the use of marijuana, with dispensaries declared an essential service in parts of the US during the pandemic, tourism could expand and normalize acceptance of its use.

Perceived risks may fade and tourist guilt may dissipate. Cannabis tourism is likely to become just another segment of the holiday industry.

This article was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic experts. It was written by and represents the research-based opinions of Michael O’Regan, Senior Lecturer in International Tourism Management, Swansea University.


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Release – ACCO Brands Corporation Announces Participation in Virtual 2022 East Coast Ideas Conference



ACCO Brands Corporation Announces Participation in Virtual 2022 East Coast Ideas Conference

Research, News, and Market Data on ACCO Brands

06/09/2022

LAKE ZURICH, Ill.–(BUSINESS WIRE)– ACCO Brands Corporation (NYSE: ACCO) today announced that its management will participate in the virtual 2022 East Coast IDEAS Investor Conference. The company’s virtual presentation will be available on June 16 at 8:00 a.m. EDT.

The presentation will be webcast and will be accessible through the Investor Relations section of 
www.accobrands.com, through the conference website 
www.threepartadvisors.com/east-coast, and through the host’s main website www.IDEASconferences.com. The presentation will be archived for 90 days following the event.

About ACCO Brands
Corporation

ACCO Brands Corporation (NYSE: ACCO) is one of the world’s largest designers, marketers and manufacturers of branded academic, consumer and business products. Our widely recognized brands include Artline®, AT-A-GLANCE®, Barrilito®, Derwent®, Esselte®, Five Star®, Foroni®, GBC®, Hilroy®, Kensington®, Leitz®, Mead®, PowerA®, Quartet®, Rapid®, Rexel®, Swingline®, Tilibra®, Wilson Jones® and many others. Our products are sold in more than 100 countries around the world. More information about ACCO Brands, the Home of Great Brands Built by Great People, can be found at www.accobrands.com.

View source version on 
businesswire.comhttps://www.businesswire.com/news/home/20220609005383/en/

Neal Fenwick
Investor Relations
(847) 796-4740

Julie McEwan
Media Relations
(937) 974-8162

Source: ACCO Brands Corporation


Consolidation and Vertical Integration Within the Cannabis Industry



Image Credit: Marco Verch (Flickr) Creative Commons License


There’s a Reason the Marijuana Industry’s M&A is Just Beginning

Consolidation within an industry refers to combining companies to form fewer but larger businesses. Vertical integration is the corporate buzzword for a business owning a major part or all or part of its supply chain. Within the marijuana industry, a vertically integrated cannabis company typically means they own from seed to store. That could include cultivation, lab and extraction, product design, manufacturing, and retail sales. This allows the company control of product consistency and allows streamlining. It may also reduce the overall cost of production.

The cannabis industry both in the U.S. and in other countries is experiencing a period of acquisitions and mergers as the benefits of size, and control of supply and quality, are part of the natural growth of any growing industry. While not all states allow complete vertical integration in marijuana products, those that do are experiencing consolidation across the production stages. For investors in this space, it’s helpful to be clear about what stages companies you are considering investing in are involved. And whether your company may potentially be a target for an acquisition or be more likely to acquire another.  

 

Product Stages of Cannabis Vertical Integration

Flower – the cultivation stage is where life begins for the final product. Companies involved in cultivation are becoming more precise with handling everything from germination through the flower stage.

Extraction – During the lab and extraction stage, the cannabis plant goes through processes to remove the cannabinoids for edibles or production of concentrates.

Manufacturing – Companies involved in producing from extracted cannabis make the final product the wholesale or retail customer receives, usually including packaging. If the final product is in plant form, it will be weighed and labeled.

Retail/Medical – Once products are labeled in compliance with relevant laws, products can be shipped to retail or medical shelves.

Shipping or delivery is not generally viewed as a product stage.

Vertical Integration Laws

In some cannabis-legal states, vertical integration is mandated because it allows for better oversight of the seed-to-sale process. State regulators claim it helps reduce retail facilities from purchasing black market products since businesses are required to produce, manufacture and sell their own products. It has also been argued it helps address federal tax issues since cannabis businesses can’t deduct regular business expenses. Plus, vertically integrated businesses may be able to overlap costs like rent and utilities.

While some states require and others ban vertical integration of cannabis products, a handful of states leave the choice up to the businesses.

Examples of Consolidating Cannabis Companies

In a C-Suite interview recorded in late May 2022, Justin Dye, CEO of Schwazze (SHWZ) sat down with Noble Capital Markets, Senior Equity Analyst Joe Gomes to discuss the company’s overall business strategies and their appetite for M&A. The states Schwazze operates in allow vertical integration,

Mr. Dye and Mr. Gomes discuss how Schwazze currently fills 50% of its own production needs through in-house cultivation, and also the benefits of working with outside suppliers. The company has its own extraction labs and owns 33 stores. Schwazze has been expanding aggressively in the states it serves, and recently (June 1) closed a transaction on a large cultivation facility and dispensary in Colorado. The C-Suite interview, available here, provides insights on the benefits of being a vertically integrated company in this space. The video also helps investors understand Schwazze’s “House of Brands” concept. Schwazze operates in Colorado and New Mexico.

A California-focused retail consolidator and the owner of Mankind Dispensary is GABY (GABLF) Mankind is one of the oldest licensed dispensaries in California. GABY, founded by CEO Margot Micallef is a pioneer in the industry with a multi-vertical retail foundation, and a strong management team with experience in retail, consolidation, and cannabis. Mankind is a well-known, and highly respected dispensary with deep roots in the California cannabis community operating in San Diego, California. GABY is poised to grow its retail both organically and through acquisition. The company curates and sells a diverse portfolio of products. Hear what GABY CEO said in April in her presentation at NobleCon18, available
here
. The company distributes its proprietary brands through its wholly-owned subsidiary, GABY Manufacturing. GABY reported first-quarter results today (June 6), Read what Senior Research Analyst Joe Gomes wrote in a research note about the state of the industry and GABY’s results, get
the report
.

Take Away

Consolidation within the cannabis industry is strong; mergers and acquisitions in the U.S. last year totaled 209 with a total value of $10.1 billion. Some of the M&A which is still running at near last year’s pace is to provide full vertical integration or improved integration within’ the firm’s specialties.

Ongoing integration is of interest to investors as there are cost savings and improvements that can be had by controlling the production process to lower cost, improve flexibility in the production processes, retain strict consistency, and quickly adjust to changes in demand for particular strains. 

Public companies that become acquisition targets can deliver outsized returns to investors. Research posted on Channelchek of Small and Microcap stocks may help identify the strengths and attractiveness of companies involved in the cannabis industry and others covered by Noble Capital Markets veteran equity analysts. Sign-up today for emails and access.

Paul Hoffman

Managing Editor, Channelchek

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Sources

https://www.gabyinc.com/

https://mjbizdaily.com/marijuana-mergers-acquisitions-sizzled-in-2021-and-poised-for-a-hot-2022/

https://jcannabisresearch.biomedcentral.com/articles/10.1186/s42238-021-00087-9

https://vangst.com/blog/vertical-integration-cannabis

https://www.cannabisbusinesstimes.com/article/hort-how-to-grow-for-genetic-fit-cannabis-varieties-indoor-greenhouse/

https://mjbizdaily.com/marijuana-mergers-acquisitions-sizzled-in-2021-and-poised-for-a-hot-2022/

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GABY (GABLF) – Reports First Quarter 2022 Results

Monday, June 06, 2022

GABY (GABLF)
Reports First Quarter 2022 Results

GABY Inc. is a California-focused retail consolidator and the owner of Mankind Dispensary, one of the oldest licensed dispensaries in California. Mankind is a well-known, and highly respected dispensary with deep roots in the California cannabis community operating in San Diego, California. GABY curates and sells a diverse portfolio of products, including its own proprietary brands, Lulu’s™ and Kind Republic™ through Mankind, manufactures Kind Republic, and distributes all its proprietary brands through its wholly owned subsidiary, GABY Manufacturing. A pioneer in the industry with a multi-vertical retail foundation, and a strong management team with experience in retail, consolidation, and cannabis, GABY is poised to­­­ grow its retail operations both organically and through acquisition.

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.

1Q22 Results. GABY reported first quarter revenue of $7.3 million (all figures in CAD$), up from $3.4 million reported last year, driven by the acquisition of Mankind, but down from the $8.2 million in 4Q21. We had estimated revenue of $8.5 million. Variable gross margin for the quarter improved to 47.6% compared to our 47.5% projection. GABY recorded adjusted EBITDA of $0.5 million in the quarter, compared to $0.86 million in 4Q21. Net income for the quarter totaled $1.5 million, or $0.00 per share, driven by one-time items, versus a net loss of $3.9 million, or $0.01 per share, in 4Q21.

Return to Normalcy, Challenging Market Impact Results. The sequential decline in revenue was driven by a return to post-COVID normalcy in cannabis sales and a challenging California market, as we have highlighted previously. Revenues are now back close to pre-COVID levels. …

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

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

Release – Schwazze Closes Acquisition of Assets of Urban Health & Wellness, Inc.



Schwazze Closes Acquisition of Assets of Urban Health & Wellness, Inc.

Research, News, and Market Data on Schwazze


DENVER, June 1, 2022 /CNW/ – Schwazze, (OTCQX: SHWZ) (NEO: SHWZ) (“Schwazze” or the “Company”), announced today that it closed the transaction to acquire substantially all the assets of Urban Health & Wellness, Inc. (“Urban”).  The transaction includes the adult use Urban Dispensary, located at West 38th Avenue and Clay Street, in Denver’s vibrant Highlands neighborhood as well as a 7,200 square foot indoor cultivation facility (2,700 square feet of canopy) located in Denver, Colorado. This purchase continues Schwazze’s aggressive expansion in Colorado and brings the Company’s total number of Colorado dispensaries to 23 and grow facilities to four. The acquired assets included state and local retail marijuana and marijuana cultivation licenses supporting the adult use dispensary and indoor cultivation facility acquired in the transaction.

 

“Urban’s strategically located dispensary
and grow facility will be excellent additions to our expanding portfolio of
assets in Colorado.  Delivering our brands and our excellent customer
service into new neighborhoods is a Schwazze hallmark as we continue to go deep
in Colorado and New Mexico.” 
said Nirup Krishnamurthy, Schwazze’s COO.    

The consideration for the acquisition was US$3.2 million, which was paid $1.3M in cash and $1.9M in Company common stock upon closing, of which $288,000 of this common stock consideration was held back by the Company for indemnification claims. The common stock consideration was  split 65% to 35% between the two equityholders of Urban.   At closing, each equityholder that received common stock consideration was required to execute a standard lock-up agreement providing for limitations on resale of the stock consideration received.  There were no finder’s fees or similar arrangements in connection with the transaction.

Since April 2020, Schwazze has acquired or announced the planned acquisition of 33 cannabis dispensaries as well as seven cultivation facilities and two manufacturing assets in Colorado and New Mexico. In May 2021, Schwazze announced its BioSciences division and in August 2021, it commenced home delivery services in Colorado.

About Schwazze
Schwazze (OTCQX:SHWZ, NEO:SHWZ) is building a premier vertically integrated regional cannabis company with assets in Colorado and New Mexico and will continue to take its operating system to other states where it can develop a differentiated regional leadership position. Schwazze is the parent company of a portfolio of leading cannabis businesses and brands spanning seed to sale.  The Company is committed to unlocking the full potential of the cannabis plant to improve the human condition.  Schwazze is anchored by a high-performance culture that combines customer-centric thinking and data science to test, measure, and drive decisions and outcomes.  The Company’s leadership team has deep expertise in retailing, wholesaling, and building consumer brands at Fortune 500 companies as well as in the cannabis sector.  Schwazze is passionate about making a difference in our communities, promoting diversity and inclusion, and doing our part to incorporate climate-conscious best practices.  Medicine Man Technologies, Inc. was Schwazze’s former operating trade name.  The corporate entity continues to be named Medicine Man Technologies, Inc.

Schwazze derives its name from the pruning technique of a cannabis plant to enhance plant structure and promote healthy growth.

Forward-Looking Statements
This press release contains “forward-looking statements.” Such statements may be preceded by the words “plan,” “will,” “may,”, “predicts,” or similar words. Forward-looking statements are not guarantees of future events or performance, are based on certain assumptions, and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s control and cannot be predicted or quantified. Consequently, actual events and results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) our inability to manufacture our products and product candidates on a commercial scale on our own or in collaboration with third parties; (ii) difficulties in obtaining financing on commercially reasonable terms; (iii) changes in the size and nature of our competition; (iv) loss of one or more key executives or scientists; (v) difficulties in securing regulatory approval to market our products and product candidates; (vi) our ability to successfully execute our growth strategy in Colorado and outside the state, (vii) our ability to consummate the acquisition described in this press release or to identify and consummate future acquisitions that meet our criteria, (viii) our ability to successfully integrate acquired businesses and realize synergies therefrom, (ix) the ongoing COVID-19 pandemic, * the timing and extent of governmental stimulus programs, (xi) the uncertainty in the application of federal, state and local laws to our business, and any changes in such laws, and * out ability to satisfy the closing conditions for the private finding described in this press release. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC’s website at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise except as required by law.

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/schwazze-closes-acquisition-of-assets-of-urban-health–wellness-inc-301558885.html

SOURCE Medicine Man Technologies, Inc.


FAT Brands Inc. (FAT) – A Tuck-in Acquisition to Improve Factory Utilization and Expand Market Share

Thursday, May 26, 2022

FAT Brands Inc. (FAT)
A Tuck-in Acquisition to Improve Factory Utilization and Expand Market Share

FAT Brands (NASDAQ: FAT) is a leading global franchising company that strategically acquires, markets, and develops fast casual, quick-service, casual dining, and polished casual dining concepts around the world. The Company currently owns 17 restaurant brands: Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli’s, Twin Peaks, Great American Cookies, Hot Dog on a Stick, Buffalo’s Cafe & Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses, and franchises and owns over 2,300 units worldwide. For more information on FAT Brands, please visit www.fatbrands.com.

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

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

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

Acquisition. Yesterday, FAT Brands announced that it agreed to acquire the franchised chain of stores known as Nestlé Toll House Café by Chip from Crest Foods, Inc. While the acquisition increases the Company’s presence in the cookie segment, we believe the driving force to be the opportunity to increase the capacity utilization of the manufacturing business, which currently manufactures cookie dough and pretzel mix for FAT Brands, as well as conducts distribution services for other products used in those operations. Recall, the factory is currently operating at roughly one-third of capacity. At full capacity, the factory could more than double its EBITDA contribution.

Who, and What, Is Nestlé Toll House Café by Chip from Crest Foods, Inc.? While terms of the acquisition were not released, Nestle Toll House Café currently franchises approximately 85 cafés across the U.S., with a concentration in Texas. The very first Nestle Toll House Café by Chip opened in August 2000, in Frisco, Texas and the brand touches over 60 million customers per year. Cafes are commonly found in shopping malls or shopping centers….



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. 

Schwazze (SHWZ) – Continuing to Build a Leading Regional MSO

Monday, May 23, 2022

Schwazze (SHWZ)
Continuing to Build a Leading Regional MSO

Schwazze (OTCQX:SHWZ, NEO:SHWZ) is building a premier vertically integrated regional cannabis company with assets in Colorado and New Mexico and will continue to take its operating system to other states where it can develop a differentiated regional leadership position. Schwazze is the parent company of a portfolio of leading cannabis businesses and brands spanning seed to sale. The Company is committed to unlocking the full potential of the cannabis plant to improve the human condition. Schwazze is anchored by a high-performance culture that combines customer-centric thinking and data science to test, measure, and drive decisions and outcomes. The Company’s leadership team has deep expertise in retailing, wholesaling, and building consumer brands at Fortune 500 companies as well as in the cannabis sector. Schwazze is passionate about making a difference in our communities, promoting diversity and inclusion, and doing our part to incorporate climate-conscious best practices.

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.

1Q22 Results. Revenue for the quarter totaled $31.8 million, up from $26.5 million in the fourth quarter and $19.3 million a year ago. The increase was mostly due to acquisitions as the Colorado market continued to experience softness from the 2021 COVID highs. Adjusted EBITDA was $7.9 million in the quarter. Schwazze reported an operating loss of $4.8 million and a net loss of $28.5 million, or $0.61 per share. We had forecast revenue of $35 million and net income of $1.7 million, or $0.03 per share.

One-Time Items Impact Results. First quarter 2022 COGS was impacted by $6.3 million of purchase accounting on acquisitions, compared to $2.2 million in the year ago period. One-time costs associated with acquisitions totaled $2.8 million. Below the line, results were impacted by $13.4 million of unrealized loss on derivative liabilities and a y-o-y increase in interest expense to $7.3 million from $961,282 in 1Q21.

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. 

Stem Holdings, Inc. (STMH) – Reports Fiscal 2Q22 Operating Results

Monday, May 23, 2022

Stem Holdings, Inc. (STMH)
Reports Fiscal 2Q22 Operating Results

Stem is a multi-state, vertically integrated, cannabis company that, through its subsidiaries and its investments, is engaged in the cultivation, processing, packaging, distribution and branding of cannabis, hemp and their derivatives, including oils, edibles, concentrates. Additionally, the Company purchases, improves, leases, operates, and invests in properties for use in the production, distribution and sales of cannabis and cannabis-infused products licensed under the laws of the states of Oregon, Nevada, California, Massachusetts, and New York. As of December 31, 2021, Stem had ownership interests in 24 state-issued cannabis licenses including nine (9) licenses for cannabis cultivation, three (3) licenses for cannabis processing, two (2) licenses for cannabis wholesale distribution, three (3) licenses for hemp production and seven (7) cannabis dispensary licenses.

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.

2QFY22 Results. Stem reported net revenue of $4.1 million compared to $5.5 million last year. The sales decline reflects a decrease in sales resulting from general market conditions. Stem reported a net loss of $3.5 million, or $0.02 per share, for the quarter. In the same period last year, Stem recorded a net loss of $8.6 million, or $0.06 per share. Outstanding shares increased to 223.7 million from 137.8 million. We had projected revenue of $4.2 million and a net loss of $4.0 million, or $0.02 per share. 

Segments. While the wholesale business saw a modest increase year-over-year, retail revenue declined to $3.2 million from $6.0 million year-over-year. We attribute the drop to a combination of a soft overall cannabis market and Stem’s ongoing restructuring of its Oregon operations.

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. 

Bowlero (BOWL) – Cleans Up Capital Structure

Friday, May 20, 2022

Bowlero (BOWL)
Cleans Up Capital Structure

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.

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

Warrants off the books. The company announced that all of its outstanding warrants have been either redeemed or exercised. As of March 31, the company had a total of roughly 14.5 million outstanding warrants, a combination of public and privately held. The company also announced the repurchase of 0.46 million shares since the last quarter-end for roughly $4.3 million.

Cashless Exercise. The company received roughly $23,000 in connection with the exercise of some of the publicly held warrants. However, the vast majority of the warrants were exercised on a cashless basis. In total, the company issued approximately 4.26 million shares for the exercise of the remaining warrants.

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

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

Release – Schwazze Announces First Quarter Results



Schwazze Announces First Quarter Results

Research, News, and Market Data on Schwazze

Conference
Call & Webcast Scheduled for Today – 4:30 pm EDT

DENVER, May 16, 2022 /CNW/ – Schwazze, (OTCQX: SHWZ) (NEO: SHWZ) (“Schwazze” or the “Company”), today announced financial results for the first quarter ended March 31, 2022 (“Q1 2022”).

Q1 2022 Financial Summary:

  • Revenues of $31.8 million grew 64% compared to $19.3 million in first quarter ended March 31, 2021 (Q1 2021)
  • Retail sales were $26.5 million up 124% when compared to Q1 2021
  • Gross Margin of $10.9 million was up 34.4% compared to $7.3 million in Q1 2021, both first quarters were affected by purchase accounting
  • Net Loss was ($26.8) million compared to a Net Loss of ($3.6) million for the same period last year
  • Adjusted EBITDA of $7.9 million was 25% of revenue, compared to $5.8 million for the same period last year
  • Colorado two year stacked IDs for Q1 2022 compared to Q1 2021 and 2020 for same store sales(1) were 22.7% and one year IDs(1) were (8.1%) comparing Q1 2022 to Q1 2021
    • Average basket size (1) for Q1 2022 was $59.21 down 1.7% compared to Q1 2021
    • Recorded customer visits (1) for Q1 2022 totaled 415,308 down 6.4%, compared to Q1 2021
  • New Mexico two year stacked IDs for Q1 2022 compared to Q1 2021 and Q1 2020 for same store sales(1) were 37.3% and one year IDs(1) were (1.9%) comparing Q1 2022 to Q1 2021
    • Average basket size (1) for Q1 2022 was $59.94 down 1.6% compared to Q1 2021
    • Recorded customer visits (1) for Q1 2022 totaled 122,913 down slightly at 0.3%, compared to Q1 2021

Accomplishments for Q1 2022
Since December 2021, Schwazze has closed acquisitions adding 14 cannabis dispensaries, 10 in New Mexico and four in Colorado as well as four cultivation facilities in New Mexico and one in Colorado and one manufacturing asset in New Mexico.

Q1 2022

  • Listed Common Stock on the NEO Exchange
  • Signed Definitive Agreement to Acquire Assets of Urban Health & Wellness
  • Closed Acquisition of Brow 2 LLC Assets
  • Closed Acquisition of Emerald Fields
  • Added President of New Mexico Division
  • Closed New Mexico Acquisition, Becoming a Regionally Focused MSO
  • Added to Key Senior Leadership Team
  • Closed Acquisition of Drift Assets

Justin Dye, Chairman and CEO of Schwazze stated
, “as we continued our successful transformation into a Regional
MSO in the first quarter of 2022, we met certain challenges, including the
comparison cycling of an inflated Q1 2021, which was aided by stimulus checks
and COVID lockdowns.  Colorado’s high COVID rates during Q1 2022 also
impacted sales and internal staff. The devastating Marshall Fires in and around
Boulder in January of this year, caused one store to temporarily close and the
store has been further impacted due to a displaced population in and around
Boulder County. Also, overall sales and a decrease in wholesale revenue was
largely impacted by wholesale distillate pricing pressure and over-supply in
the state of Colorado.”

Justin continued, “however, we
remain optimistic regarding our continued growth for the remainder of the year
as we believe that Colorado’s first quarter was impacted by macro events. 
We are starting to see more positive results entering the second quarter. We
are pleased to report that the sales trends in New Mexico, which recently
commenced selling recreational-use cannabis on April 1, have seen positive
results, and we remain confident in the future growth of this market.  Our
revenue continues to grow with a 64% increase overall when comparing Q1 2022 to
Q1 2021, with retail sales growing to $26.5 million for the quarter, a 124%
increase compared to Q1 2021. While basket sales and customer visits for both
Colorado and New Mexico were down quarter over-quarter, attributed to macro
events and previous stimulus spending, we once again outpaced the industry
performance in the state of Colorado for the quarter by 10.2%.  At this
time, we do not have a service that publishes comparable market stats in New
Mexico, therefore we will be working on how to compare our performance in the
near future.”

Q1 2022 Revenue
Revenues for Q1 2022, totaled $31.8 million including (i) retail sales of $26.5 million (ii) wholesale sales of $5.2 million and (iii) other operating revenues of $0.04 million, compared to revenues of $19.3 million including (i) retail sales of $11.8 million (ii) wholesale of $7.4 million, and (iii) other operating revenues of $0.08 million during Q1 2021 and represented an increase of $12.4 million or 64%. Increased sales are due in large part to additional dispensary sales.  In Q1 2022, we acquired fourteen new retail dispensaries. The decrease in wholesale revenue in 2022 was largely due to wholesale distillate pricing pressure and over-supply in the state of Colorado.

Cost of goods and services for Q1 2022, totaled $20.8 million compared to cost of goods and services of $12.1 million during Q1 2021, representing an increase of $8.7 million or 72%. This increase was due to increased sales and growth through acquisition. The cost of goods and services increased at a higher rate than revenue due to the impact of purchase accounting on retail acquisitions made in the each of the first quarters. Q1 2022 had $6.3 million in additional cost of goods and services due to purchase accounting while Q1 2021 had $2.2 million of additional cost of goods and services due to purchase accounting.

Gross profit increased to $10.9 million for Q 1 2022 compared to $7.3 million during the same period in 2021. Gross profit margin declined as a percentage of revenue from 37.5% to 34.4%, although net of purchase accounting, the gross margin increased from 48.7% to 54.1%.  This positive result, net of purchase accounting continues to reflect our consolidated purchasing approach, the implementation of our retail playbook, and vertical product sales in New Mexico.

Operating expenses for Q1 2022, totaled $15.7 million, compared to operating expenses of $8.7 million during Q1 2021, representing an increase of $7 million or 80%. This increase was due to increased selling, general and administrative expenses including acquisition costs, professional service fees related to acquisitions, salaries, benefits and related employment costs mostly related to the increased number of dispensaries.

Other expense, net for Q1 2022, totaled $20.7 million, compared to $1.7 million during Q1 2021. The increase in other expense, net was due to an increase in interest payments due to various loans and by the non-cash loss on derivative liability related to our 13% senior secured convertible notes due 2026.

As a result of the factors discussed above, a net loss was generated for the Q1 2022 of $26.8 million, compared to net loss of $3.6 million during Q1 2021.  This loss includes non-cash charges totaling $16.9 million; this includes derivative liability of $13.4 million, depreciation and amortization of $2.5 million and non-cash compensations of $1.0 million as well as acquisition and capital raise costs associated with the closing of recent acquisitions of $9.1 million, including $6.3 million of purchase accounting costs and $2.8 million of additional related costs.

Adjusted EBITDA for Q1 2022 was $7.9 million representing 25% of revenue, compared to $5.8 million for the same period last year. This is derived from Operating Income and adjusting one-time expenses, merger and acquisition and capital raising costs, non-cash related compensation costs, and depreciation and amortization. See the financial table for Adjusted EBITDA below adjustment for details. 

For Q1 2022, the Company generated net cash provided from operations of $5.8 million compared to $1.7 million for the same period in 2021.  The Company has cash and cash equivalents of $47.1 million at the end of Q1 2022. 

Nancy Huber, CFO for Schwazze commented, “Q1
2022 included four acquisitions in January and February expanding the company
in all areas.  We also found ourselves cycling large numbers from the
previous year and were impacted by COVID as many businesses in Colorado were
similarly affected in January. As we move forward in quarters not complicated
by acquisitions costs, we are targeting to have positive operating
income.  We remain focused on continuing to drive our operating playbook
through all our businesses and plan to outperform the market.  We
delivered positive operating cash flow despite a challenging quarter.  We
will continue to invest that cashflow in growth opportunities both organically
and through acquisitions.”

2022 Guidance
The Company’s guidance, issued for 2022 remains unchanged.  Guidance has been issued for a fourth-quarter 2022 (Q4 2022) annualized run rate, which excludes transactions that are announced but not closed.  Q4 2022 revenue annualized run rate is projected to be approximately $220 Million to $260 Million, and the projected Q4 2022 adjusted EBITDA annualized run rate is projected to be from $70 million to $82 million.  

NOTES:

(1)  Schwazze
did not own all the assets and entities in part of 2021, 2020 and 2019 and is
using unaudited numbers for this comparison.


Adjusted EBITDA represents income (loss) from operations, as reported, before
tax, adjusted to exclude non-recurring items, other non-cash items, including
stock-based compensation expense, depreciation, and amortization, and further
adjusted to remove acquisition and capital raise related costs, and other
one-time expenses, such as severance, retention, and employee relocation. The
Company uses adjusted EBITDA as it believes it better explains the results of
its core business. The Company has not reconciled guidance for adjusted EBITDA
to the corresponding GAAP financial measure because it cannot provide guidance
for the various reconciling items. The Company is unable to provide guidance
for these reconciling items because it cannot determine their probable
significance, as certain items are outside of its control and cannot be
reasonably predicted. Accordingly, a reconciliation to the corresponding GAAP
financial measure is not available without unreasonable effort.

Webcast – May 16, 2022 – 4:30 EDT
Investors and stakeholders may participate in the conference call by dialing 416-764-8650 or by dialing North American toll free 888-664-6383 or listen to the webcast from the Company’s website at https://ir.schwazze.com . The webcast will be available on the Company’s website and on replay until May 23, 2022, and may be accessed by dialing 888-390-0541 / 117902#.

Following their prepared remarks, Chief Executive Officer, Justin Dye and Chief Financial Officer, Nancy Huber will answer investor questions. Investors may submit questions in advance or during the conference call itself through the weblink: https://produceredition.webcasts.com/starthere.jsp?ei=1548621&tp_key=88d9ed2417  This weblink has been posted to the Company’s website and will be archived on the website. All Company SEC filings can also be accessed on the Company website at https://ir.schwazze.com/sec-filings  and on SEDAR at www.sedar.com  

About Schwazze
Schwazze (OTCQX: SHWZ) is building a premier vertically integrated regional cannabis company with assets in Colorado and New Mexico and will continue to take its operating system to other states where it can develop a differentiated regional leadership position. Schwazze is the parent company of a portfolio of leading cannabis businesses and brands spanning seed to sale. The Company is committed to unlocking the full potential of the cannabis plant to improve the human condition. Schwazze is anchored by a high- performance culture that combines customer-centric thinking and data science to test, measure, and drive decisions and outcomes. The Company’s leadership team has deep expertise in retailing, wholesaling, and building consumer brands at Fortune 500 companies as well as in the cannabis sector. Schwazze is passionate about making a difference in our communities, promoting diversity and inclusion, and doing our part to incorporate climate-conscious practices. Medicine Man Technologies, Inc. was Schwazze’s former operating trade name. The corporate entity continues to be named Medicine Man Technologies, Inc. Schwazze derives its name from the pruning technique of a cannabis plant to enhance plant structure and promote healthy growth.

Forward-Looking Statements
This press release contains “forward-looking statements.” Such statements may be preceded by the words “plan,” “will,” “may,” “continue,” “predicts,” “targeting” or similar words. Forward-looking statements include the guidance provided regarding the Company’s Q4 2022 performance and annual capital spending. Forward-looking statements are not guarantees of future events or performance, are based on certain assumptions, and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s control and cannot be predicted or quantified. Consequently, actual events and results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) our inability to manufacture our products and product candidates on a commercial scale on our own or in collaboration with third parties; (ii) difficulties in obtaining financing on commercially reasonable terms; (iii) changes in the size and nature of our competition; (iv) loss of one or more key executives or scientists; (v) difficulties in securing regulatory approval to market our products and product candidates; (vi) our ability to successfully execute our growth strategy in Colorado and New Mexico and outside the states, (vii) our ability to identify and consummate future acquisitions that meet our criteria, (viii) our ability to successfully integrate acquired businesses and realize synergies therefrom, (ix) the ongoing COVID-19 pandemic, (x) the timing and extent of governmental stimulus programs, (xi) the uncertainty in the application of federal, state and local laws to our business, and any changes in such laws, and (xii) our ability to achieve the target metrics, including our annualized revenue and EBIDTA run rates set out in our Q4 2022 guidance. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC’s website at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise except as required by law.

MEDICINE MAN
TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
For the Three Months
ended March 31, 2022 and 2021
Expressed in U.S. Dollars

March 31,

December 31,

2022

2021

ASSETS

(Unaudited)

(Audited)

Current assets

Cash and cash equivalents

$

47,688,094

$

106,400,216

Accounts receivable, net of allowance for doubtful accounts

4,196,533

3,866,828

Inventory

16,380,765

11,121,997

Note receivable – current, net

107,500

Prepaid expenses and other current assets

3,008,326

2,523,214

Total current assets

71,381,218

123,912,255

Non-current assets

Fixed assets, net accumulated depreciation of $2,390,922 and $1,988,973, respectively

16,601,696

10,253,226

Goodwill

118,698,717

43,316,267

Intangible assets, net of accumulated amortization of $9,791,597 and $7,652,750, respectively

95,443,483

97,582,330

Marketable securities, net of unrealized loss of $8,549 and gain of $216,771, respectively

485,004

493,553

Note receivable – noncurrent, net

143,333

Accounts receivable – litigation

290,648

303,086

Other noncurrent assets

1,384,863

514,962

Operating lease right of use assets

13,721,007

8,511,780

Total non-current assets

246,625,418

161,118,537

Total assets

$

318,006,636

$

285,030,792

LIABILITIES AND
STOCKHOLDERS’ DEFICIT

Current liabilities

Accounts payable

$

3,106,503

$

2,548,885

Accounts payable – related party

100,128

36,820

Accrued expenses

15,308,676

5,592,222

Derivative liabilities

48,340,485

34,923,013

Notes payable – related party

134,498

134,498

Income taxes payable

3,287,635

2,027,741

Total current liabilities

70,277,925

45,263,179

Long term debt

117,863,486

97,482,468

Lease liabilities

14,082,673

8,715,480

Total long-term liabilities

131,946,159

106,197,948

Total liabilities

202,224,084

151,461,127

Stockholders’ equity

Common stock, $0.001 par value. 250,000,000 shares authorized; 53,484,820 shares issued and 52,746,376 shares outstanding at March 31, 2022 and 45,455,490 shares issued and 44,717,046 shares outstanding as of December 31, 2021.

53,486

45,485

Preferred stock, $0.001 par value. 10,000,000 shares authorized; 86,994 shares issued and 82,594 outstanding at March 31, 2022 and December 31, 2021 and 10,000,000 shares authorized.

87

87

Additional paid-in capital

171,798,685

162,815,097

Accumulated deficit

(54,552,670)

(27,773,968)

Common stock held in treasury, at cost, 517,044 shares held as of March 31, 2022 and December 31, 2021.

(1,517,036)

(1,517,036)

Total stockholders’ equity

115,782,552

133,569,665

Total liabilities and stockholders’ equity

$

318,006,636

$

285,030,792

 

See accompanying notes to the financial statements

 

MEDICINE MAN
TECHNOLOGIES, INC.
CONSOLDIATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
For the Three Months
ended March 31, 2022 and 2021
Expressed in U.S. Dollars

For the Three Months
Ended

March 31,

2022

2021

(Unaudited)

(Unaudited)

Operating revenues

Retail

$

26,525,716

$

11,816,200

Wholesale

5,207,388

7,446,265

Other

44,450

77,650

Total revenue

31,777,554

19,340,115

Cost of goods and services

Cost of goods and services

20,840,051

12,087,111

Total cost of goods and services

20,840,051

12,087,111

Gross profit

10,937,503

7,253,004

Operating expenses

Selling, general and administrative expenses

6,855,711

3,189,638

Professional services

2,584,472

2,195,108

Salaries

5,296,777

1,869,358

Stock based compensation

991,083

1,483,806

Total operating expenses

15,728,043

8,737,910

Loss from operations

(4,790,540)

(1,484,906)

Other income (expense)

Interest expense, net

(7,302,254)

(961,282)

Unrealized loss on derivative liabilities

(13,417,472)

(1,253,814)

Other expense

7

Gain (loss) on sale of assets

292,479

Unrealized gain on investments

(8,549)

214,630

Total other expense

(20,728,268)

(1,707,987)

Provision for income taxes

1,259,894

456,614

Net loss

$

(26,778,702)

$

(3,649,507)

Less: Accumulated preferred stock dividends for the period

(1,743,444)

Net loss attributable to common stockholders

$

(28,522,146)

$

(3,649,507)

Earnings (loss) per share attributable to common stockholders

Basic earnings (loss) per share

$

(0.61)

$

(0.09)

Weighted average number of shares outstanding – basic

46,841,971

42,616,309

Comprehensive loss

$

(26,778,702)

$

(3,649,507)

 

See accompanying notes to the financial statements

 

MEDICINE MAN
TECHNOLOGIES, INC.
STATEMENT OF CASH FLOWS (UNAUDITED)
For the Three Months
ended March 31, 2022, and 2021
Expressed in U.S. Dollars

For the Three Months Ended

March 31,

2022

2021

Cash flows from operating activities

Net income (loss) for the period

(26,778,702)

(3,649,507)

Adjustments to reconcile net income to cash used in operating activities

Depreciation and amortization

2,540,796

1,790,568

Loss on change in derivative liabilities

13,417,472

1,253,814

(Gain) loss on investment, net

8,549

(214,630)

Stock based compensation

991,083

1,483,806

Changes in operating assets and liabilities (net of acquired amounts):

Accounts receivable

(120,388)

(1,014,189)

Inventory

6,628,634

225,878

Prepaid expenses and other current assets

104,888

(12,816)

Other assets

(867,401)

(371,831)

Operating leases right of use assets and liabilities

157,966

33,334

Accounts payable and other liabilities

8,488,283

2,224,092

Deferred revenue

(50,000)

Income taxes payable

1,259,894

Net cash provided by operating activities

5,831,074

1,698,519

Cash flows from investing activities:

Cash consideration for acquisition of business

(90,317,153)

(65,109,039)

Purchase of fixed assets

(2,607,567)

(633,114)

Issuance of notes receivable

141,680

Net cash used in investing activities

(92,924,719)

(65,600,473)

Cash flows from financing activities:

Proceeds from issuance of debt

18,203,332

39,748,852

Debt issuance and discount costs

2,177,685

599,389

Repayment of notes payable

(5,000,000)

Proceeds from issuance of common stock, net of issuance costs

8,000,506

50,282,798

Net cash provided by financing activities

28,381,522

85,631,039

Net (decrease) increase in cash and cash equivalents

(58,712,122)

21,729,085

Cash and cash equivalents at beginning of period

106,400,216

1,231,235

Cash and cash
equivalents at end of period

$

47,688,094

$

22,960,320

Supplemental disclosure of cash flow information:

Cash paid for interest

$

4,722,639

$

897,247

Issuance of stock as payment for acquisitions

8,000,506

20,239,980

 

See accompanying notes to the financial statements

 

MEDICINE MAN
TECHNOLOGIES, INC.
Adjusted EBITDA Reconciliation
Non-GAAP measurement
(UNAUDITED)

Three Months Ended

March 31,

2022

2021

Net income (loss)

$ (26,778,702)

$   (3,649,507)

Interest (income) expense, net

7,302,254

961,282

Provision for income taxes (benefit)

1,259,894

456,614

Other (income) expense

13,426,014

746,705

Depreciation and amortization

2,540,796

1,790,568

Earnings before
interest, taxes, depreciation and

amortization (EBITDA)
(non-GAAP measure)

$   (2,249,744)

$       
305,662

Non-Cash Stock Compensation

991,083

1,483,806

Deal Related Expenses

2,256,934

745,944

Capital Raise Related Expenses

564,320

951,119

Inventory Adjustment to fair market value for purchase accounting

6,260,434

2,164,686

Severance

4,565

16,266

Retention Program Expenses

29,688

Employee Relocation Expenses

18,778

20,000

Other non-recurring items

17,911

127,167

Adjusted EBITDA (non-GAAP measure)

$     7,864,281

$     5,844,338

7,864,281

5,844,338

Revenue

31,777,554

19,340,115

   
 aEBITDA Percent

24.7%

30.2%

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/schwazze-announces-first-quarter-results-301548165.html

SOURCE Schwazze

Released May 16, 2022

Bowlero (BOWL) – Scores Another Big Quarter

Thursday, May 12, 2022

Bowlero (BOWL)
Scores Another Big Quarter

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.

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

Impressive Q3 results. The company reported fiscal Q3 revenue of $257.8 million, an increase of 130% from the year earlier quarter and a solid 8.3% above our estimate of $238.1 million. Adj. EBITDA was even more impressive at $108.4 million, a 296% increase from the year earlier quarter and a whopping 36.3% higher than our estimate of $79.5 million.

Eased COVID restrictions. Management noted that the strong quarter was boosted by the easing of COVID restrictions in many regions and as the Covid Omicron variant faded. This allowed retail revenue to increase and event revenue to significantly improve. This was evident by a 133% increase in Food & Beverage in the quarter. Notably, revenue was up 25.8% compared with pre-pandemic performance and up 12.2% compared with pre-pandemic on a same-store basis.  

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. 

Element79 Gold Corp. (ELMGF) – Getting In On the Ground Floor

Wednesday, May 11, 2022

Element79 Gold Corp. (ELMGF)
Getting In On the Ground Floor

Element79 Gold is a mineral exploration company focused on the acquisition, exploration and development of mining properties for gold and associated metals. Element79 Gold has acquired its flagship Maverick Springs Project located in the famous gold mining district of northeastern Nevada, USA, between the Elko and White Pine Counties, where it has recently completed a 43-101-compliant, pit-constrained mineral resource estimate reflecting an Inferred resource of 3.71 million ounces of gold equivalent* “AuEq” at a grade of 0.92 g/t AuEq (0.34 g/t Au and 43.4 g/t Ag)) with an effective date of Feb. 4, 2022. The acquisition of the Maverick Springs Project also included a portfolio of 15 properties along the Battle Mountain trend in Nevada, which the Company is analyzing for further merit of exploration, along with the potential for sale or spin-out. In British Columbia, Element79 Gold has executed a Letter of Intent to acquire a private company which holds the option to 100% interest of the Snowbird High-Grade Gold Project, which consists of 10 mineral claims located in Central British Columbia, approximately 20km west of Fort St. James. In Peru, Element79 Gold has signed a letter of intent to acquire the business and assets of Calipuy Resources Inc., which holds 100% interest in the past-producing Lucero Mine, one of the highest-grade underground mines to be commercially mined in Peru’s history, as well as the past-producing Machacala Mine. The Company also has an option to acquire 100% interest in the Dale Property which consists of 90 unpatented mining claims located approximately 100 km southwest of Timmins, Ontario, Canada in the Timmins Mining Division, Dale Township.

Mark Reichman, Senior Research Analyst, Natural Resources, Noble Capital Markets, Inc.

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

Initiating coverage with an Outperform rating. From the time of its initial public offering in August 2021, Element79 Gold has rapidly assembled a diversified portfolio of precious metals properties in the United States, Canada, and Peru. The company’s 20-property portfolio, including those for which it has an option or letter of intent to acquire, includes sixteen 100%-owned projects in Nevada, two in Canada, and two in Peru. Its flagship Maverick Springs project in Nevada, which was acquired in December 2021, hosts an inferred resource of 3.71 million ounces of gold equivalent with significant expansion potential. The company also owns 15 properties along the Battle Mountain Trend in Nevada and is considering each for additional exploration, joint venture, sale, or spin-out.

Accelerated path to cash flow generation. Element79 Gold recently executed a letter of intent to acquire two past producing gold mines in Peru, the Lucero and Machacala mines, with the intent to return Machacala to production within the next 18 to 24 months at a maximum rate of 350 tonnes per day. A definitive agreement is expected to be executed by the end of June with the transaction closing shortly thereafter. While the company’s Nevada projects provide scale and underpin the company’s valuation with an existing resource, the projects in Peru offer the potential for higher grade ore and the prospect of near-term production and cash flow….

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.