MamaMancini's Holdings, Inc. (OTCQB: MMMB), a manufacturer and marketer of specialty pre-prepared, frozen and refrigerated all-natural food products (as defined by the United States Department of Agriculture), announced financial results for the first quarter of fiscal year 2019, ended April 30, 2018.
First Quarter Highlights: First quarter of fiscal year 2019 revenue increased 45% to $7.7 million compared to $5.4 million in prior-year period. Gross profit increases to 37% of sales vs. 36% prior year. Operating expenses decreased to 29% of sales vs. 33% prior year. Net income available to common stockholders was a record $324,000, or $0.01 per diluted share, during the first quarter of fiscal 2019, compared to a net loss available to common stockholders of $51,000, or $0.00 per diluted share in the same quarter last year. EBITDA for the first quarter was $709,000 compared to $315,000 in the first quarter of fiscal 2018. Sales per customer retail location (“SKUs”) increased 25% over prior year.
Key Quote: "We are pleased with the solid double-digit revenue increase and profitability in the first quarter. We continue to gain measurable traction with our focus on selling into the food service area on the perimeter of the retail grocery store. This continues to enable us to develop larger retail store accounts that drive revenue at superior margins.” Carl Wolf, Chairman and CEO of MamaMancini's
The Backstory: MamaMancini's is a marketer and distributor of a line of all-natural beef meatballs and turkey meatballs, all with sauce; five cheese-stuffed beef and turkey meatballs, all with sauce; original beef and turkey meatloaves; chicken parmesan; stuffed peppers; and other similar Italian cuisine products.
The Company has recently added to its line sausage and peppers, sausage and sauce; Sunday dinner (meatballs and sausage and sauce); and Italian pasta entrees. The Company will begin testing sauces this summer. The Company’s sales have been growing consistently as the Company expands its distribution channel, which includes major retailers and distributors such as Costco, Publix, Shop Rite, Jewel, Sam’s Club, Lunds and Byerlys, SuperValu, Safeway, Albertsons, Spartan Nash, Whole Foods Market, Hy-Vee, Shaw’s, Kings, Roche Bros., Key Foods, Stop & Shop, Giant, Giant Eagle, Foodtown, Kroger, Shoppers, Schnucks Markets, Fresh Direct, King Kullen, Lowes, Central Market, Weis Markets, Ingles, Food City, The Fresh Market, Market Basket, Meatball Obsession, Monterrey Provisions (Kehe), Porky Products, Sysco, DPI, United Natural Foods, Bozzutos, Burris Foods, and C&S.
The Company sells a variety of its products on air and online on QVC, the world’s largest direct-to-consumer marketer.
Disclosure
(MamaMancini's Holdings, Inc. [OTCQB: MMMB] is a client of RedChip Companies, Inc. MMMB agreed to pay RedChip Companies, Inc. a monthly cash fee for RedChip investor awareness services and consulting services.)
By Dave Gentry, CEO and President, RedChip Companies
I recently spent two days at the Licensing Expo in Las Vegas. There, I had the pleasure of meeting with supermodel and supermogul Kathy Ireland. Kathy Ireland is the largest shareholder in Level Brands (NYSE American: LEVB), a branding and licensing company that she helped form and take public in November 2017. Her company kathy ireland® Worldwide is a $2.5 billion brand (Forbes), making kiWW the 27th-largest licensing brand in the world (License Global magazine). Kathy’s attention is focused on building Level Brands into a billion-dollar brand. It became very apparent to me after meeting with Kathy that she is passionate about turning Level Brands into a branding and licensing powerhouse.
Level Brands earned $1.36 million in 2Q18, and the earnings trend is expected to continue. The company has net margins of 60%, zero debt, and plenty of cash from its $12m reg a+ offering. If the company can continue earning 17 cents per share per quarter, and if it trades at a p/e of 20x, then it could be a $15 stock. However, I can tell you that Kathy Ireland is not interested in building a $100 million market-cap company. Her goal is to build a $1b+ market-cap company. Given her extraordinary business acumen and success in building kathy ireland® Worldwide, I wouldn’t bet against her. In my opinion, at current price levels, Level Brands represents a very good buying opportunity for savvy investors.
Disclosure
(Level Brands [NYSE American: LEVB] is a client of RedChip Companies. LEVB agreed to pay RedChip a monthly cash fee and 5,000 shares of Rule 144 stock for four months of RedChip investor awareness services.)
Catasys, Inc. (NASDAQ: CATS) a leading AI and technology-enabled healthcare company, announced that it has entered into a $10 million financing comprised of a receivable facility agreement of $2.5 million with Heritage Bank of Commerce and a four-year term loan of up to $7.5 million with Horizon Technology Finance Corporation (NASDAQ: HRZN).
Under the terms of the financing, the initial interest rate on the receivable facility agreement is Prime (currently 4.75%) plus 3%, or 7.75%. The initial interest rate on the term loan is 9.75% and will float with Libor when north of 2% (currently 2.05%). The blended interest rate on the financing is initially 9.10%.
Key Quote: “We are pleased to close a financing that supports our growth plans without any dilution to shareholders. Our entire management team worked closely with Horizon and Heritage over the last few months, and after an extensive review process, created a solution that works for all parties.” Mr. Terren Peizer, Chairman and CEO of Catasys
Backstory: Catasys, Inc. harnesses proprietary big data predictive analytics, artificial intelligence and telehealth, combined with human intervention, to deliver improved member health and cost savings to health plans through integrated technology-enabled treatment solutions. It is our mission to provide access to affordable and effective care, thereby improving health and reducing cost of care for people who suffer from the medical consequences of behavioral health conditions; helping these people and their families achieve and maintain better lives.
Disclosure
(Catasys [NASDAQ: CATS] is a client of RedChip Companies, Inc. CATS agreed to pay RedChip Companies, Inc. a monthly cash fee for 12 months of investor awareness services designed to help small-cap companies communicate their investment characteristics. RedChip investor awareness services include the preparation of a research profile(s), multimedia marketing, and other awareness service.)
Immersion Corporation (NASDAQ: IMMR), the leading developer and licensor of touch feedback technology, today announced that it now has more than 3,000 haptics patents issued or pending worldwide. Immersion’s extensive background in haptics includes 25 years of experience in haptic R&D, UX design, prototyping, mechanical design and integration.
Key Quote: “As we mark our 25th anniversary this year, our focus on innovation and the development of cutting-edge haptic technology has been, and remains, at the forefront of our strategy.” Carl Schlachte, Immersion’s Interim CEO and Chairman of the Board
Backstory: Immersion Corporation (IMMR) is the leading innovator of touch feedback technology, also known as haptics. The company provides technology solutions for creating immersive and realistic experiences that enhance digital interactions by engaging users’ sense of touch. With more than 3,000 issued or pending patents, Immersion's technology has been adopted in more than 3 billion digital devices, and provides haptics in mobile, automotive, gaming, medical and consumer electronics products. Immersion is headquartered in San Jose, California with offices worldwide. Learn more at www.immersion.com.
Bellerophon Therapeutics, Inc. (NASDAQ: BLPH) (“Bellerophon”), a clinical-stage biotherapeutics company, announced that it will participate on a panel, titled Emerging Landscape of Treatment Options in PAH, at the JMP Securities Life Sciences Conference on Wednesday, June 20, 2018, in New York City. The conference is taking place June 20-21, 2018, at The St. Regis New York.
Bellerophon Presentation Details
Title: Emerging Landscape of Treatment Options in PAH
Date: Wednesday, June 20, 2018
Time: 9:00am-10:00am Eastern Time
Location: The St. Regis New York, Library Room
Backstory: Bellerophon Therapeutics is a clinical-stage biotherapeutics company focused on developing innovative therapies at the intersection of drugs and devices that address significant unmet medical needs in the treatment of cardiopulmonary diseases. The Company is currently developing three product candidates under its INOpulse program, a proprietary pulsatile nitric oxide delivery system. The first is for the treatment of PAH, for which the Company has commenced Phase 3 clinical trials. The second is for the treatment of pulmonary hypertension associated with chronic obstructive pulmonary disease (PH-COPD) and the third candidate is for the treatment of pulmonary hypertension associated with Interstitial Lung Disease (PH-ILD), both of which are in Phase 2 development. For more information, please visit www.bellerophon.com
Canopy Growth (NYSE: CGC) Trades Near All-Time Highs on News of Cannabis Act
Canopy Growth (NYSE: CGC), a world-leading diversified cannabis and hemp company, is trading near all-time highs after Canada’s Senate last week approved Bill C-45, known as the “Cannabis Act.”
Why It Matters: At a $6 billion market cap (100x sales), CGC has become one of the leading barometers of the budding cannabis industry. Now trading on the NYSE, U.S. investors can more easily buy shares of CGC to gain exposure to the market leader’s success. And with the passing of the “Cannabis Act,” experts believe a critical hurdle has been overcome that will fuel the next phase of growth for the sector.
Key Quote: “We are proudly a research and patient-focused company that will continue to drive the cannabis innovation agenda forward around the world.” – Mark Zekulin, President
What’s Next: While investors interested in the cannabis space would be well served owning shares of the market leader, smaller, lesser-known cannabis companies will likely produce larger returns for investors over the long-term.
Nutriband (OTCQB: NTRB), a unique, result's driven, health and pharmaceutical company, signed a Letter of Intent to acquire 100% of Carmel Biosciences, a pharmaceutical company that addresses critical needs in new drug and liquid reformulation for cardiovascular and metabolic therapies.
Why it Matters: The acquisition of Carmel Biosciences, which received FDA approval for the first and only approved oral liquid dosage form of the angiotensin receptor blocker (ARB) valsartan in the US in December 2017, will strengthen both Nutriband’s team and its development pipeline, leading to new opportunities for revenue growth and ultimately shareholder value improvement.
Key Quote: "Carmel's focus in the reformulation of drugs with a high degree of safety and efficacy allows improved access to patients who have difficulty swallowing tablets or capsules and provides enhanced usage of these widely acclaimed products." – Gareth Sullivan, CEO
What’s Next: Nutriband plans to complete the deal, valued at approximately $3.8 million, through payment of 450,000 restricted common shares of the company's stock. With the hypertension therapeutics market expected to reach nearly $5 billion by 2024, Nutriband will be ideally positioned to capitalize on another sizeable market opportunity. Combined with its growing development pipeline of transdermal pharmaceutical solutions, early investors could see big returns as the company executes.
Disclosure
(Nutriband Inc. [OTCQB: NTRB] is a client of RedChip Companies, Inc. NTRB agreed to pay RedChip Companies, Inc. 10,000 shares of Rule 144 stock for 6 months of RedChip investor awareness services and consulting services.)
Eco-Stim Energy Solutions, Inc. (NASDAQ: ESES) announced today that it has finalized the terms of the transition agreement with its primary customer in Argentina. The transition agreement became effective in May 2018 and will continue until the earlier of approximately July 31, 2018 or the completion of the committed work under the transition agreement.
The Company expects that at the end of the transition period, the former two-year agreement with its primary customer in Argentina will be terminated. The terms of the transition agreement are improvements over the terms of the previous contract.
Backstory: EcoStim is an environmentally focused oilfield service and technology company offering well stimulation and completion services and field management technologies to oil and gas producers drilling in the U.S. and international unconventional shale markets. In addition to conventional pumping equipment, EcoStim offers its clients completion techniques that can dramatically reduce horsepower requirements, emissions, and surface footprint.
Green Spirit (OTCQB: GSRX), an owner and operator of cannabis dispensaries that is in the process of expanding its business to include the cultivation, extraction, manufacture, and delivery of cannabis and cannabinoid products, announced this week the opening of two new medicinal cannabis dispensaries in Puerto Rico, doubling the total of its operating dispensaries. The new dispensaries are in Carolina, just east of San Juan on Puerto Rico’s northern coast, and in the Hato Rey district of San Juan.
Why It Matters: Green Spirit now operates three dispensaries in Puerto Rico, with more slated to open in the coming months. This is a sizeable footprint on the island that should cement its early leadership position, enabling it to dominate what some expect to be a $500 million market over the next several years. Combined with its growing presence in the United States’ largest cannabis market, California, it is clear that Green Spirit can execute its ambitious growth goals in the rapidly expanding cannabis space.
Key Quote: "With four cannabis dispensaries now open in California and Puerto Rico, and four more wholly acquired dispensaries slated to open in the coming months, Green Spirit has established its presence in the fast-growing cannabis industry within the Company’s first year of operations." – Les Ball, CEO
What’s Next: In addition to its growing network of cannabis dispensaries, Green Spirit is working to establish cultivation, extraction, and manufacturing operations, building a vertically integrated company. Longer-term, the company is forecasting revenue of $300 million annually within the next five years. Even achieving a fraction of that growth, GSRX could trade significantly higher than current prices, based on peer-group price-to-sales multiples.
Disclosure
(Green Spirit Industries [OTCQB: GSRX] is a client of RedChip Companies. RedChip Companies, Inc. received 1,000,000 registered shares of GSRX for consulting services and 50,000 shares for investor awareness services. Be advised RedChip intends to sell some or all of its shares at any time, including when you are buying.)
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Russell 2000 Reconstitution Presents Risk and Opportunity
The annual reconstitution of the Russell 2000 small-cap index is coming up later this month.
A preliminary list of changes was recently issued, and two more updates to the changes will be published on the next two Fridays.
The cutoff for new members getting into the Russell 1000 is $3.7 billion, while the cutoff for the Russell 2000 is only $159.2 million. Due to the strong equity-market performance, these cutoffs are substantially higher than they have been in the past.
The specific equities most impacted by this year's Russell reconstitution are those with the highest number of days of volume to be bought. For example, BBX Capital (NYSE: BBX) is getting added to the Russell 2000 this month, and the index ETFs and similar funds must buy over a month of volume. BBX trades at a discount to its NAV, but that discount could contract sharply this month.
According to recent trading data, the issue that could be impacted the most is First United Corp. (NASDAQ: FUNC). Indexers will need to buy up over 100 days of volume in the next two weeks. As FUNC only made the cut-off right as the first list was published, event arbitragers likely haven’t adequately prepared for its addition. This could cause further upside pressure leading up to reconstitution day on June 22.
There are certainly other opportunities like FUNC that could be positively impacted. Played well, investors that do the necessary homework could reap sizeable short-term gains this month.
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Quote of the Week
"Work hard, be a long-term thinker, develop tenacity and remember nothing happens without taking calculated risks."
- Phil Sassower, Chairman Phoenix Group
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