Level Brands, Inc. (NYSE American: LEVB), an innovative licensing and brand management company that provides bold, unconventional, and socially responsible branding for leading businesses, announced preliminary third quarter fiscal 2018 total net sales are estimated to be between $3.0 million and $3.2 million, a year-over-year increase of 68%-79%, with operating income before taxes of $500,000 to $600,000, compared to an operating loss before taxes of $178,000 in the year-ago period. Third quarter fiscal 2018 anticipated results are preliminary and based on the most current information available and are subject to completion of the condensed consolidated financial statements for the third quarter of fiscal 2018, which are to be filed with the SEC no later than August 14, 2018.
Key Quote: “Our anticipated results for the third quarter reflect the strong foundation that we’ve laid and the strength of our team.” -- Martin A. Sumichrast, Chairman and CEO of Level Brands
The Backstory: The focus of LEVB is licensing and corporate brand management for consumer products, including art, beauty, fashion, the beverage space, health and wellness, and entertainment. License brand marketing is at the core of the Level Brands businesses: kathy ireland® Health & Wellness; Ireland Men One (I’M1), a men’s lifestyle brand established to capitalize on potentially lucrative licensing and co-branding opportunities with brands focused on millennials; Encore Endeavor One (EE1), a provider of corporate brand-management services and producer of experiential entertainment events and products across multiple platforms.:
Disclosure
(Level Brands [NYSE: 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.)
Immuron (NASDAQ: IMRN) is an Australian microbiome biopharmaceutical Company focused on developing and commercializing orally delivered targeted polyclonal antibodies for the treatment of inflammatory mediated and infectious diseases.
The Company is pleased to announce that the European Patent Office (EPO) has decided to grant a patent for the use of a composition for the treatment of Non-alcoholic steatohepatitis (NASH). This patent (EPO Grant No. 2424890) is entitled “Anti-LPS enriched immunoglobulin preparations for the treatment and/or prophylaxis of a pathologic disorder.” This patent is due to expire in April 2030, with potential for supplementary protection and extension of this monopoly.
Key Quote: “The claims of this new European patent are particularly broad and represent the primary intellectual property rights sought by the company in this important and commercially large jurisdiction.” Jerry Kanellos, Interim CEO of Immuron Ltd.
The Backstory: Immuron has a unique and safe technology platform that enables a shorter development therapeutic cycle. The Company currently markets and sells Travelan® for the prevention of travelers’ diarrhea, and its lead clinical candidate, IMM-124E, is in Phase II clinical trials for Non-Alcoholic Steatohepatitis (NASH), Severe Alcoholic Hepatitis (SAH) and Pediatric Nonalcoholic Fatty Liver Disease (NAFLD). Immuron’s second clinical stage asset, IMM-529, is targeting Clostridium difficile Infections (CDI). These products together with the Company’s other preclinical immunotherapy pipeline products targeting immune-related diseases currently under development, will meet a large unmet need in the global immunotherapy market.
Disclosure
(Immuron Ltd. [NASDAQ: IMRN] is a client of RedChip Companies, Inc. IMRN agreed to pay RedChip Companies, Inc. a monthly cash fee for (3) months of investor awareness services, which includes this research report.)
Digital Ally, Inc. (NASDAQ: DGLY) is pleased to announce a significant development in its litigation against Axon Enterprise, Inc. (“Axon” formerly TASER International, Inc.). In one of the most case-critical rulings of a patent litigation, the U.S. District Court for the District of Kansas issued its claim construction order, siding with Digital Ally across the board as to the meaning of certain claim terms disputed by the parties. In doing so, the Court rejected Axon’s attempt to unduly narrow Digital Ally’s patent rights and confirmed that Digital’s patent claims are not indefinite, as Axon alleged.
Not only does the Court’s ruling side with Digital Ally substantively, it also triggers firm deadlines for the remainder of the litigation, rapidly moving the case toward trial. The parties must now complete fact discovery over the next 60 days and the schedule sets a January 4, 2019 deadline to file all dispositive and Daubert motions—the last substantive and evidentiary challenges before proceeding to trial. This leaves only pretrial matters to be conducted early in the new year before Digital Ally gets to present its case to a jury.
Key Quote: “Axon and WatchGuard have attacked our intellectual property rights from every angle since the United States Patent and Trademark Office issued multiple patents covering our ground-breaking auto-activation technology for law enforcement cameras.” Stanton Ross, CEO, Digital Ally
The Backstory: Digital Ally, Inc., headquartered in Lenexa, Kansas, specializes in the design and manufacturing of the highest quality video recording equipment and video analytic software. Digital Ally pushes the boundaries of technology in industries such as law enforcement, emergency management, commercial fleets, and consumer use. Digital Ally’s complete product solutions include in-car and body cameras, cloud and local management software, and automatic recording technology. These products work seamlessly together and are simple to install and operate. Digital Ally products are sold by domestic direct sales representatives and international distributors worldwide.
Disclosure
(Digital Ally, Inc. [NASDAQ: DGLY] is a client of RedChip Companies, Inc. DGLY agreed to pay RedChip Companies, Inc., a monthly cash fee for four (4) months of RedChip investor awareness services.)
New Jersey American Water (NYSE: AWK) announced it has signed an agreement to acquire the Roxbury Water Company, a family-owned and operated water utility that provides service to nearly 3,900 customer accounts in Morris County, N.J.
Key Quote: “We are looking forward to welcoming residents served by Roxbury Water to our family of customers.” Deb Degillio, president of New Jersey American Water
The Backstory: New Jersey American Water, a subsidiary of American Water, is the largest investor-owned water utility in the state, providing high-quality and reliable water and/or wastewater services to approximately 2.7 million people. For more information, visit www.newjerseyamwater.com and follow New Jersey American Water on Twitter and Facebook. With a history dating back to 1886, American Water is the largest and most geographically diverse U.S. publicly traded water and wastewater utility company. The company employs more than 6,900 dedicated professionals who provide regulated and market-based drinking water, wastewater and other related services to an estimated 15 million people in 46 states and Ontario, Canada. American Water provides safe, clean, affordable and reliable water services to our customers to make sure we keep their lives flowing. For more information, visit www.amwater.com.
Esports Entertainment (OTCQB: GMBL), a licensed online gambling company with a specific focus on esports wagering and 18+ gaming, engaged Joseph Gunnar & Co., LLC and Dinosaur Financial Group, LLC as Exclusive Financial Advisors, Placement Agents and Investment Bankers.
Why It Matters: As leading Wall Street investment banking and securities firms, Joseph Gunnar and Dinosaur Financial will provide GMBL with financial advisory services, in particular related to evaluating financing options. Additionally, the firms will also focus on assisting the Company in creating and executing new strategies for maximizing shareholder value through their full scope of investment banking services. The Company does not have a defined timeline for a financing and cannot provide any assurance whether or when a financing will be announced or consummated.
Key Quote: “Esports Entertainment Group is on the cutting edge of an exploding industry. We are very excited about teaming up. Stephen A. Stein, President of Joseph Gunnar
What’s Next: The esports market is massive and growing at a rapid pace. GMBL has positioned itself well in this burgeoning space with a large roster of more than 100 affiliate markets signed on to drive traffic to the company’s innovative bet exchange platform. With the support of some of the top team in esports, GMBL has established significant credibility that should enable to grow rapidly in the coming quarters.
Disclosure
(Esports Entertainment Group, Inc. [OTCQB: GMBL] is a client of RedChip Companies, Inc. GMBL agreed to pay RedChip Companies, Inc. a monthly cash fee for six (6) months of RedChip investor awareness services.)
GSRX Industries (OTCQB: GSRX), formerly known as Green Spirit Industries, a cannabis business building vertically integrated operations in Puerto Rico and California, held an exclusive investor webinar last week with CEO Les Ball presenting and taking questions from investors. The full webinar and Q&A session is now available for replay at RedChip.com
Disclosure
(GSRX 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.)
Haven Status in Jeopardy for Small Caps
Investors have pushed U.S. small-cap stocks to record highs while seeking a haven from tariff-related tensions, but the popular trade is beginning to appear vulnerable. More than $4 billion poured into mutual funds and exchange-traded funds that track small caps in May and June alone, while U.S. stock-focused funds overall have suffered billions of dollars of outflows every month this year, according to data from Morningstar.
Why It Matters: The $4 billion influx of cash has helped propel the Russell 2000 up 11% this year, compared with the S&P 500’s 4.8% gain. The index is still trading near record levels, but some analysts warn that strong corporate earnings and economic data are masking the tariffs’ potential negative impact on small businesses.
Key Quote: “Longer out, this is going to affect consumer spending and more importantly it’s going to affect investment in the U.S.” -- Mary Lovely, Peterson Institute for International Economics
Quote of the Week
"You can't be right all the time, but you can surround yourself with honest people."
- John Pappajohn, Venture Capitalist
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