Monday, December 14, 2020

FAT Brands Inc. (FAT)
FAT Brands, Fog Cutter Merger Announced; Increasing PT

FAT Brands Inc is a multi-brand restaurant franchising company. It develops, markets, and acquires predominantly fast casual restaurant concepts. The company provides turkey burgers, chicken Sandwiches, chicken tenders, burgers, ribs, wrap sandwiches, and others. Its brand portfolio comprises Fatburger, Buffalo’s Cafe and Express, and Ponderosa and Bonanza. The company’s overall footprint covers nearly 32 countries. Fatburger generates maximum revenue for the company.

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

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

Fog Cutter Merger. On Friday, FAT Brands announced the long-waited merger with its controlling shareholder Fog Cutter Capital Group (FCCG). FCCG owns 81.16% of FAT’s common shares. FAT shares closed at $7.89, or 28% higher on the news. At the onset, the merger will simplify FAT’s corporate structure and eliminate limitations that have restricted FAT’s ability to use common stock for acquisitions and capital raising. FCCG also holds over $100 million of NOLs that FAT will now be able to use to offset future taxable income. Management estimates FAT’s public float will increase to approximately 46% on a fully-diluted basis.


Terms.  The 9,679,288 FAT shares held by FCCG will, in essence, be distributed to the current FCCG stockholders in proportion to their FCCG ownership. We would note that FAT CEO and President Andy Wiederhorn owns approximately 80% of FCCG. Current, non-FCCG, FAT common holders will receive $5.80 liquidation preference per common share in FAT’s 8.25% Series B Preferred (FATBP) …

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. 

Monday, December 07, 2020

Schwazze (SHWZ)
Historic Vote, But What Does it Mean?

Medicine Man Technologies, Inc. is now operating under its new trade name, Schwazze. Schwazze is executing its strategy to become a leading vertically integrated cannabis holding company with a portfolio consisting of top-tier licensed brands spanning cultivation, extraction, infused-product manufacturing, dispensary operations, consulting, and a nutrient line. Schwazze leadership includes Colorado cannabis leaders with proven expertise in product and business development as well as top-tier executives from Fortune 500 companies. As a leading platform for vertical integration, Schwazze is strengthening the operational efficiency of the cannabis industry in Colorado and beyond, promoting sustainable growth and increased access to capital, while delivering best-quality service and products to the end consumer. The corporate entity continues to be named Medicine Man Technologies, Inc.

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

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

Historic Vote. On Friday, the House of Representatives passed legislation that would decriminalize marijuana, mostly on party lines. This represents the first time a chamber of Congress has voted on federal marijuana decriminalization The MORE Act would remove marijuana from the Controlled Substances Act and eliminate criminal penalties for the manufacture, distribution, or possession, but would authorize a 5% sales tax on marijuana products. Significantly, the MORE Act also would solve the current banking and tax issues faced by the industry.


U.N. Removes Cannabis from “Most Dangerous” Drug List. On Wednesday the UN Commission on Narcotic Drugs removed cannabis from its schedule of dangerous drugs, where had been for 59 years. This could accelerate global research into the medical and therapeutic potential of cannabis, which, if confirmed, could further push open the legalization door …

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. 

Tuesday, November 24, 2020

Schwazze (SHWZ)

Schwazze: Building a “Seed to Sale” Colorado Powerhouse

Medicine Man Technologies, Inc. is now operating under its new trade name, Schwazze. Schwazze is executing its strategy to become a leading vertically integrated cannabis holding company with a portfolio consisting of top-tier licensed brands spanning cultivation, extraction, infused-product manufacturing, dispensary operations, consulting, and a nutrient line. Schwazze leadership includes Colorado cannabis leaders with proven expertise in product and business development as well as top-tier executives from Fortune 500 companies. As a leading platform for vertical integration, Schwazze is strengthening the operational efficiency of the cannabis industry in Colorado and beyond, promoting sustainable growth and increased access to capital, while delivering best-quality service and products to the end consumer. The corporate entity continues to be named Medicine Man Technologies, Inc.

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

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

Initiating Coverage. We are initiating coverage of Schwazze. Our rating and price target assume the Company is successful in its acquisition of Star Buds. At our price target SHWZ shares would trade at 3.5x projected 2021 revenue and 14.2x projected 2021 EBITDA.


Experienced Management Team.  Lead by former Albertson’s executive Justin Dye, Schwazze has assembled a management team with deep experience in both the cannabis business as well as finance, M&A, and operations. Significantly, Mr. Dye and the executive team are highly motivated through their ownership interest in delivering success for shareholders …

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. 

Friday, November 20, 2020

Esports Entertainment Group, Inc. (GMBL)

Heightened M&A Activity In The Gambling Space Validates ESports’ Strategy

Esports Entertainment Group Inc is a development-stage online gambling company focused purely on esports. The company’s principal business operations include design, develop and test wagering systems.

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

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

Sinclair’s big deal.  Sinclair Broadcast Group (SBGI) announced yesterday that it entered a strategic partnership with Bally Corporation (BALY) to participate in the sports betting and iGaming industry. Sinclair will receive warrants to acquire up to 24.9% of Bally’s common shares. In addition, Sinclair will also receive options to purchase 5% of Bally’s common shares in four tranches with purchase prices starting at $30 per share and escalating to $45 per share, exercisable after four years.


Entercom enters the betting game.  On a smaller scale, Entercom (ETM) also acquired a sports data and iGaming company, QL Gaming Group for approximately $32 million, or 2.7 times revenues. The QLGG technology portfolio includes sports betting data and analytical capabilities, daily fantasy sports, and analytical coverage of the ATP and WTA Tours (TennisInsight.com), each with respective subscriber …

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. 

Wednesday, November 18, 2020

Esports Entertainment Group, Inc. (GMBL)

Building a Sturdy Foundation Esports Business

Esports Entertainment Group Inc is a development-stage online gambling company focused purely on esports. The company’s principal business operations include design, develop and test wagering systems.

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

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

In line Q1 results. While there were not significant operations in the quarter, it was not inconsequential. We believe that there is a foundation for strong revenue growth, fueled by the Argyll Entertainment acquisition and plans for tournaments in December. As such, we believe that Q1 revenues, which were $222,000 versus our $200,000 estimate, will ramp to over $2 million in the upcoming quarter.


Gross margins should improve.  Cost of Goods was an unusually high $420,000 in Q1, while less than our $500,000 estimate. The company provided incentives in the quarter to lure back players, including rewards and bonus play. Cost of goods should be more normalized, roughly 42% to 44% of revenues in fiscal Q2, as marketing incentives abate …

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. 

Friday, October 30, 2020

1-800-Flowers.com (FLWS)

Another Quarter Of Enhanced Growth; Raising Target

1-800-FLOWERS.COM, Inc. is the leading provider of gourmet and floral gifts for all occasions. For nearly 40 years, 1-800-FLOWERS® has been helping deliver smiles for customers with gifts for every occasion, including fresh flowers, premium, gift-quality fruits, and other gourmet items from Harry & David®, popcorn and specialty treats from The Popcorn Factory®; cookies and baked gifts from Cheryl’s®; premium chocolates and confections from Fannie May®; gift baskets and towers from 1-800-Baskets.com®; premium English muffins and other breakfast treats from Wolferman’s; carved fresh fruit arrangements from FruitBouquets.com; and top quality steaks and chops from Stock Yards®. The Company’s BloomNet® international floral wire service provides a broad range of quality products and value-added services designed to help professional florists grow their businesses profitably.

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

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

Exceeds Q1 expectations. Fiscal Q1 end September 30 revenues increased a strong 51.6% to $283.9 million, above our $263.4 million expectation. The largest upside revenue variance was in its consumer floral division. The company continues to enjoy enhanced revenue growth due to strong ecommerce sales. Adjusted EBITDA from continuing operations was better than expected, $3.2 million versus our estimate of $0.2 million.


Strong consumer floral and ecommerce.  Ecommerce revenues increased a strong 85.1% in the quarter, with 1800Flowers’ consumer floral brand increasing revenues 55%. We believe that the company expanded its market leading position in the space. Certainly revenue growth is sequentially decelerating from the extraordinary impact that the Covid pandemic has had on its ecommerce business …

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. 

Wednesday, October 28, 2020

Esports Entertainment Group, Inc. (GMBL)

Initiating Coverage: A Stake In Fast Growing Esports

Esports Entertainment Group Inc is a development-stage online gambling company focused purely on esports. The company’s principal business operations include design, develop and test wagering systems.

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

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

Fast growing industry. The esports audience is growing rapidly, with industry sources forecasting global growth of 11.7% in 2020 to 495 million. We believe that esports is following the patterns of the traditional sports industry, with growth expected in live, in person tournament events (to return following the Covid pandemic), broadcast rights (including streaming and televised), advertising and sponsorships, and finally, wagering.


Among first mover in esports betting.  With a large and growing fanbase, we believe that esports betting will follow. Notably, the fanbase is young, an average age of 26, and affluent, with an average income of $90,000. Notably, there is very little overlap with traditional sports interests. As such, we believe that the esports gambling industry is attractive and is unmet by traditional sports …

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.