She then worked as a staff attorney with the Community Legal Aid Society, where she represented the needy and victims of domestic violence. She moved to a corporate law role at the firm Young Conaway Stargatt and Taylor in 2007, a mainstay in the Delaware legal circuit.

In 2018, she was nominated by John Carney, the governor of Delaware, to serve as vice chancellor on the state’s high court, the Delaware Chancery Court. In 2021, Gov. Carney nominated Ms. McCormick to become the first woman to lead the court.

More than 1.8 million businesses are incorporated in Delaware, including more than two thirds of Fortune 500 companies — and they all look to the court for guidance. When Twitter filed its lawsuit against Mr. Musk in July forcing him to close his acquisition, its case went to Delaware, where the company, like many others, is incorporated.

Judge McCormick, who has first dibs on any proceeding that comes before the court, chose herself of among a court of seven judges to oversee one of the most high profile corporate court battles in years.

At a hearing in September, as lawyers for Mr. Musk argued to delay the trial to take into account new claims from a whistle-blower, she poked at the billionaire’s decision to skip due diligence in his race to sign the deal in April. When Mr. Musk’s lawyer argued it would have been impossible to find out about the whistle-blower before the deal, she interjected, “We’ll never know, will we?” She added that “there was no due diligence.”

wrote in a ruling.

“She evidently was not putting up with any nonsense,” said Lawrence Hamermesh, a professor of law at Delaware Law School.

In October, after weeks of presiding over bruising back and forth arguments between the two sides, Judge McCormick granted Mr. Musk’s requests to put the trial on hold to give him more time to complete his financing for the acquisition. Judge McCormick granted him until Oct. 28 — a three-week delay.

“She had one eye on the clock,” said Brian Quinn, a professor at Boston College Law School, noting the two sides did not seem ready for a trial just two weeks away. “Another eye,” Mr. Quinn said, was “on potential appeals. She is looking forward saying, ‘Well, what if I ruled against Musk, and he appealed, and his appeal is that I pushed him — I rushed him toward the trial when he wanted to close the deal.’”

Judge McCormick is well-versed in trials involving deals with buyers that tried to walk away. As an associate at the law firm Young Conaway Stargatt and Taylor, she worked on cases involving deals that went awry when the stock market crashed in 2008. That included representing the chemical company Huntsman in 2008 when the private equity firm Apollo Global Management scuttled the deal it had struck to combine the chemical company with another it owned.

That deal, and others like it, paved the way for the kinds of contracts Twitter signed with Mr. Musk. Sellers learned how to prevent buyers from trying similar escape hatches. Companies increasingly structure deals with “specific performance” clauses allowing them to force a deal to close.

to follow through with its acquisition of a cake supplier after it argued that the pandemic had materially damaged the business by curbing demand for party cake.

Kohlberg contended it could not complete the deal because its debt financing had fallen apart. Judge McCormick did not buy that argument.

If Mr. Musk does not come through with Twitter’s money by Friday, that could ding his credibility in court, legal experts say. That could matter in November, when Judge McCormick is set to preside over a separate trial involving Mr. Musk and his compensation.

The case, filed in 2018, had originally been assigned to another judge on the Delaware Chancery Court, Joseph R. Slights III, before he retired in January. Judge McCormick picked up the case on Jan. 12, the same month Mr. Musk began to buy up shares of Twitter stock that ultimately led to his planned purchase of the company.

“It’s not ideal for him,” said Ann Lipton, a professor of corporate governance at Tulane Law School, of Mr. Musk’s multiple run-ins with Judge McCormick. “She’s uniquely low drama, which is the opposite of Musk. ”

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How Credit Suisse Became a Meme Stock

“Credit Suisse is probably going bankrupt.”

It was Saturday, Oct. 1, and Jim Lewis, who frequently posts on Twitter under the moniker Wall Street Silver, made that assertion to his more than 300,000 followers. “Markets are saying it’s insolvent and probably bust. 2008 moment soon?”

Mr. Lewis was among hundreds of people — many of them amateur investors — who had been speculating about the fate of Credit Suisse, the Swiss bank. It was in the middle of a restructuring and had become an easy target after decades of scandals, failed attempts at reform and management upheavals.

There seemed to be no immediate provocation for Mr. Lewis’s weekend tweet other than a memo that Ulrich Körner, the chief executive of Credit Suisse, had sent employees the day before, reassuring them that the bank was in good financial health.

But the tweet, which has been liked more than 11,000 times and retweeted more than 3,000 times, was one of many that helped ignite a firestorm on social media forums like Twitter and Reddit. The rumor that Credit Suisse was in trouble ricocheted around the world, stumping bank executives and forcing them to call shareholders, trading partners and analysts to reassure them that everything was fine before markets reopened on Monday.

prop up the shares of GameStop, the video game retailer, determined to outsmart hedge funds that had bet the company’s shares would fall.

But what started as a spontaneous effort to take down Wall Street has since become an established presence in the market. Millions of amateur investors have embraced trading, including more sophisticated strategies such as shorting. As the Credit Suisse incident shows, their actions highlight a new source of peril for troubled companies.

Founded in Switzerland in 1856 to help finance the expansion of railroads in the tiny European nation, Credit Suisse has two main units — a private wealth management business and an investment bank. However, the bank has often struggled to maintain a pristine reputation.

It has been the repository of funds from businesspeople who are under sanctions, human rights abusers and intelligence officials. The U.S. government has fined it billions of dollars for its role in helping Americans file false tax returns, marketing mortgage-backed securities tied to the 2008 financial crisis and helping customers in Iran, Sudan and elsewhere breach U.S. sanctions.

In the United States, Credit Suisse built its investment banking business through acquisitions, starting with the 1990 purchase of First Boston. But without a core focus, the bank — whose top bosses sit in Switzerland — has often allowed mavericks to pursue new revenue streams and take outsize risks without adequate supervision.

collapsed. Credit Suisse was one of many Wall Street banks that traded with Archegos, the private investment firm of Bill Hwang, a former star money manager. Yet it lost $5.5 billion, far more than its rivals. The bank later admitted that a “fundamental failure of management and controls” had led to the debacle.

surveillance of Credit Suisse executives under his watch. He left the bank in a stable and profitable condition and invested appropriately across its various divisions, his spokesman, Andy Smith, said.

Credit Suisse replaced Mr. Thiam with Thomas Gottstein, a longtime bank executive. When Archegos collapsed, the bank kept Mr. Gottstein on the job, but he started working with a new chairman, António Horta-Osório, who had been appointed a few months earlier to restructure the bank.

resigned after an inquiry into whether he had broken quarantine rules during the pandemic. But he made swift changes in his short tenure. To reduce risk taking, Mr. Horta-Osório said, the bank would close most of its prime brokerage businesses, which involve lending to big trading firms like Archegos. Credit Suisse also lost a big source of revenue as the market for special purpose acquisition companies, or SPACs, cooled.

By July, Credit Suisse had announced its third consecutive quarterly loss. Mr. Gottstein was replaced by Mr. Körner, a veteran of the rival Swiss bank UBS.

Mr. Körner and the chairman, Axel Lehmann, who replaced Mr. Horta-Osório, are expected to unveil a new restructuring plan on Oct. 27 in an effort to convince investors of the bank’s long-term viability and profitability. The stock of Credit Suisse has dipped so much in the past year that its market value — which stood around $12 billion — is comparable to that of a regional U.S. bank, smaller than Fifth Third or Citizens Financial Group.

appeared on Reddit.

Mr. Macleod said he had decided that Credit Suisse was in bad shape after looking at what he deemed the best measure of a bank’s value — the price of its stock relative to its “book value,” or assets minus liabilities. Most Wall Street analysts factor in a broader set of measures.

But “bearing in mind that most followers on Twitter and Reddit are not financial professionals,” he said, “it would have been a wake-up call for them.”

The timing puzzled the bank’s analysts, major investors and risk managers. Credit Suisse had longstanding problems, but no sudden crisis or looming bankruptcy.

Some investors said the Sept. 30 memo sent by Mr. Körner, the bank’s chief executive, reassuring staff that Credit Suisse stood on a “strong capital base and liquidity position” despite recent market gyrations had the opposite effect on stock watchers.

Credit Suisse took the matter seriously. Over the weekend of Oct. 1, bank executives called clients to reassure them that the bank had more than the amount of capital required by regulators. The bigger worry was that talk of a liquidity crisis would become a self-fulfilling prophecy, prompting lenders to pull credit lines and depositors to pull cash, which could drain money from the bank quickly — an extreme and even unlikely scenario given the bank’s strong financial position.

“Banks rely on sentiment,” Mr. Scholtz, the Morningstar analyst, said. “If all depositors want their money back tomorrow, the money isn’t there. It’s the reality of banking. These things can snowball.”

What had snowballed was the volume of trading in Credit Suisse’s stock by small investors, which had roughly doubled from Friday to Monday, according to a gauge of retail activity from Nasdaq Data Link.

Amateur traders who gather on social media can’t trade sophisticated products like credit-default swaps — products that protect against companies’ reneging on their debts. But their speculation drove the price of these swaps past levels reached during the 2008 financial crisis.

Some asset managers said they had discussed the fate of the bank at internal meetings after the meme stock mania that was unleashed in early October. While they saw no immediate risk to Credit Suisse’s solvency, some decided to cut trading with the bank anyway until risks subsided.

In another private message on Twitter, Mr. Lewis declined to speak further about why he had predicted that Credit Suisse would collapse.

“The math and evidence is fairly obvious at this point,” he wrote. “If you disagree, the burden is really on you to support that position.”

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An Uptick in Elder Poverty: A Blip, or a Sign of Things to Come?

“We’re getting more and more older people who lived through this experiment with do-it-yourself pensions, and they’re coming into this age group without the same kind of incomes that older people have,” said Teresa Ghilarducci, an economics professor at the New School who specializes in retirement policy. “I don’t think it’s a blip.”

Even though the share of elderly people officially below the poverty line is low by historical standards in the United States, it remains among the highest in the developed world, according to the Organization for Economic Cooperation and Development. The average poverty rate for older Americans also masks far higher shares among more vulnerable groups, with nearly one in five Black and Hispanic women 65 or older falling below the official poverty threshold in 2021. It’s higher for single people, too — a reality forced on hundreds of thousands of older Americans whose spouses died of Covid-19.

The poverty rate is also not a bright line when it comes to financial hardship. It doesn’t take into account debt, which more seniors have accumulated since the Great Recession. Moreover, nearly one in four people 65 or older make less than 150 percent of the federal poverty line, or $19,494 on average for those living alone. Another measure, developed by the Gerontology Institute at the University of Massachusetts Boston and called the Elder Index, finds that it takes $22,476 for a single older person in good health with no mortgage to cover basic needs, with the cost escalating for renters and those with health problems.

“To some extent we’re splitting hairs when we talk about people who fall just above and just below, because they’re all struggling,” said Jan Mutchler, a demographer at the University of Massachusetts at Boston who helped devise the Elder Index. “The assumptions that go into what we’re calling hardship are just flawed.”

That’s true for Juanita Brown, 77, who lives on her own in Galax, a small town in Virginia’s Blue Ridge Mountains. A farmer’s daughter, she worked as a nanny, and then a certified nursing assistant, and then a preschool teacher. Her husband worked in the local textile industry, and after raising two children, they had built a substantial nest egg.

But then Ms. Brown’s mother developed Alzheimer’s disease and couldn’t support herself. Ms. Brown stopped working to take care of her, which cost another $500 per month in expenses. Her husband got prostate cancer, which required extended trips to the hospital in Winston-Salem, N.C.

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CorpHousing Group Inc. Announces 2022 Second Quarter Financial Results

MIAMI–(BUSINESS WIRE)–CorpHousing Group Inc. (“CorpHousing,” “CHG”, or the “Company”) (Nasdaq: CHG), which utilizes a long-term lease, asset-light business model to acquire and manage a growing portfolio of short-term rental properties in major metropolitan cities, today announced financial results for the second quarter (“Q2 2022”) and six months ended June 30, 2022.

2022 Second Quarter Financial Overview Compared to 2021 Second Quarter

2022 Six Months Financial Overview Compared to 2021 Six Months

Operational Highlights

“We are excited to announce our Q2 results, which we believe reflect the success of our asset-light business model, the vibrancy of our target markers, and the opportunities inherent in our industry,” said Brian Ferdinand, Chairman and Chief Executive Officer of CorpHousing Group. “Q2 2022 net rental revenue increased by 144%, gross profit increased 19-fold, net income improved by $1.9 million, and EBITDA for the quarter was $2.1 million. Our available units for rent increased quarter over quarter, occupancy rates improved as the effects of COVID pandemic wane, and we realized certain efficiencies from scale.

“We currently operate hotels under long-term lease agreements in Boston, Denver, Los Angeles, greater Miami, New York City, Washington, DC, and Seattle, and will commence operations in New Orleans in mid-October.

We are in various stages of negotiation with a variety of potential partners that represent thousands of additional hotel units in destination locations across the United States and Europe. We believe that we are creating win-win opportunities by providing property owners the ability to create stable cash flow streams to maximize returns on their properties, which have been significantly impacted by restrictions on travel and leisure activities due to the COVID-19 pandemic. CHG then markets these units under our customer facing LuxUrbanTM brand to increase occupancy rates and drive operational efficiencies, thus creating the opportunity to generate high margin, recurring and predictable revenue streams. Supported by a strengthened balance sheet and seasoned team of executives, we believe that are well positioned to advance our highly scalable, predictable, and profitable business model and look forward to our future with confidence.”

Q2 2022 Overview

Net rental revenue in Q2 2022 increased 144% to $10.2 million from $4.2 million in the second quarter ended June 30, 2021 (“Q2 2021”), driven primarily by an increase in average units available to rent from 376 in Q2 2021 to 565 at Q2 2022, as well as better occupancy rates and average daily rates (“ADRs”) over this period.

Cost of revenue, which includes rental expenses for available units to rent, rose to $7.3 million in Q2 2022 from $4.0 million in Q2 2021, due primarily to the increase in size of CHG’s rental unit portfolio, as well as related increases in furniture rentals, cleaning costs, cable / WIFI costs and credit card processing fees.

Gross profit improved to $2.9 million, or 28% of net rental revenue, from $0.1 million, or 3.5% of net rental revenue. Higher gross profit and gross margin was primarily attributable to a reduction in the impact of COVID-19 on our operations, higher unit counts and better occupancy rates and ADRs.

Total general and administrative expenses in Q2 2022 increased to $0.9 million, or 9% of net rental revenue, from $0.7 million, or 18% of net rental revenue, in Q2 2021, attributable to an increased number of units in operation.

Income before provision for income taxes improved to $1.5 million from a loss of $(1.1) million, reflecting a significant increase in net rental revenue in Q2 2022 compared to Q2 2021 and the benefits of scale-driven operating efficiencies.

Net income improved to $0.8 million, or $0.04 per diluted share, compared to a net loss of $(1.1) million.

EBITDA rose to $2.1 million, or 21% of net rental revenue, in Q2 2022 compared to negative EBITDA of $(0.6) million.

For a discussion of the financial measures presented herein which are not calculated or presented in accordance with U.S. generally accepted accounting principles (“GAAP”), see “Note Regarding Use of Non-GAAP Financial Measures” below and the schedules to this press release for additional information and reconciliations of non-GAAP financial measures. The company presents non-GAAP measures such as EBITDA to assist in an analysis of its business. These non-GAAP measures should not be considered an alternative to GAAP measures as an indicator of the company’s operating performance.

Conference Call and Webcast

The Company will host a conference call on Tuesday, September 27, 2022 at 9:00 am Eastern Time to discuss the results.

Investors interested in participating in the live call can dial:

A webcast of the event may be accessed via the following link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=ltKz5SSV.

CorpHousing Group Inc.

CorpHousing Group (CHG) utilizes a long-term lease, asset-light business model to acquire and manage a growing portfolio of short-term rental properties in major metropolitan cities. The Company’s future growth focuses primarily on seeking to create “win-win” opportunities for owners of dislocated hotels, including those impacted by COVID-19 travel restrictions, while providing CHG favorable operating margins. CHG operates these properties in a cost-effective manner by leveraging technology to identify, acquire, manage, and market them globally to business and vacation travelers through dozens of third-party sales and distribution channels, and the Company’s own online portal. Guests at the Company’s properties are provided Heroic Service™ under CHG’s consumer brands, including LuxUrban. CHG’s Heroic ServiceTM provides guests a hassle-free experience which exceeds their expectations with “Heroes” who respond to any issue in a timely, thoughtful, and thorough manner.

Forward Looking Statements

This press release contains forward-looking statements, including with respect to the expected closing of noted lease transactions and continued closing on additional leases for properties in the Company’s pipeline, as well the Company’s anticipated ability to commercialize efficiently and profitably the properties it leases and will lease in the future. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those set forth under the caption “Risk Factors” in the prospectus forming part of the Company’s effective Registration Statement on Form S-1 (File No. 333-262114). Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. Forward-looking information may relate to anticipated events or results including, but not limited to business strategy, leasing terms, high-level occupancy rates, and sales and growth plans. The financial projection provided herein are based on certain assumptions and existing and anticipated market, travel and public health conditions, all of which may change. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws.

The Company seeks to achieve profitable, long-term growth by monitoring and analyzing key operating metrics, including EBITDA. The Company defines EBITDA as net income before interest, taxes, and depreciation. The Company’s management uses this non-GAAP financial metric and related computations to evaluate and manage the business and to plan and make near and long-term operating and strategic decisions. The management team believes this non-GAAP financial metric is useful to investors to provide supplemental information in addition to the GAAP financial results. Management reviews the use of its primary key operating metrics from time-to-time. EBITDA is not intended to be a substitute for any GAAP financial measure and as calculated, may not be comparable to similarly titled measures of performance of other companies in other industries or within the same industry. The Company’s management team believes it is useful to provide investors with the same financial information that it uses internally to make comparisons of historical operating results, identify trends in underlying operating results, and evaluate its business.

A reconciliation of net income to EBITDA will be provided in the company’s Quarterly Report on Form 10-Q for the three and six months ended June 30, 2022 to be filed on September 26, 2022, under the section thereof entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Reconciliation of Unaudited Historical Results to EBITDA.”

Condensed Consolidated Balance Sheet

(Unaudited)

 

 

 

(unaudited)

 

 

 

 

June 30,

 

December 31,

 

 

2022

 

2021

ASSETS

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash

 

$

556

 

 

$

6,998

 

Processor retained funds

 

 

4,616,255

 

 

 

56,864

 

Prepaid expenses and other current assets

 

 

512,939

 

 

 

166,667

 

Deferred offering costs

 

 

1,234,500

 

 

 

771,954

 

Security deposits – current

 

 

276,943

 

 

 

276,943

 

Total Current Assets

 

$

6,641,193

 

 

$

1,279,426

 

Other Assets

 

 

 

 

 

 

Furniture and equipment, net

 

 

8,944

 

 

 

11,500

 

Restricted cash

 

 

1,100,000

 

 

 

1,100,000

 

Security deposits – noncurrent

 

 

4,108,010

 

 

 

1,377,010

 

Operating lease right-of-use asset, net

 

 

49,941,971

 

 

 

 

Total Other Assets

 

 

55,158,925

 

 

 

2,488,510

 

Total Assets

 

$

61,800,118

 

 

$

3,767,936

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

5,301,053

 

 

$

4,209,366

 

Rents received in advance

 

 

4,071,095

 

 

 

1,819,943

 

Merchant cash advances – net of unamortized costs of $0 and $57,768, respectively

 

 

575,489

 

 

 

1,386,008

 

Loans payable – current portion

 

 

2,780,054

 

 

 

1,267,004

 

Loans payable – SBA – PPP Loan – current portion

 

 

815,183

 

 

 

815,183

 

Convertible loans payable – related parties – current portion

 

 

2,596,865

 

 

 

 

Loans payable – related parties – current portion

 

 

1,071,128

 

 

 

22,221

 

Operating lease liability – current

 

 

7,182,381

 

 

 

 

Income taxes payable

 

 

750,000

 

 

 

 

Total Current Liabilities

 

 

25,143,248

 

 

 

9,519,725

 

Long-Term Liabilities

 

 

 

 

 

 

Loans payable

 

 

545,789

 

 

 

925,114

 

Loans payable – SBA – EIDL Loan

 

 

800,000

 

 

 

800,000

 

Loans payable – related parties

 

 

 

 

 

496,500

 

Convertible loans payable – related parties

 

 

700,195

 

 

 

2,608,860

 

Line of credit

 

 

94,975

 

 

 

94,975

 

Deferred rent

 

 

 

 

 

536,812

 

Operating lease liability

 

 

43,962,492

 

 

 

 

Total Long-term Liabilities

 

 

46,103,451

 

 

 

5,462,261

 

Total Liabilities

 

 

71,246,699

 

 

 

14,981,986

 

Commitments and Contingencies

 

 

 

 

 

 

Stockholders’ Deficit

 

 

 

 

 

 

Members’ Deficit

 

 

 

 

 

(11,214,050

)

Common stock (shares authorized, issued and outstanding – 90,000,000; 21,675,001; 21,675,001; respectively)

 

 

216

 

 

 

 

Accumulated deficit

 

 

(9,446,797

)

 

 

 

Total Stockholders’ Deficit

 

 

(9,446,581

)

 

 

(11,214,050

)

Total Liabilities and Stockholders’ Deficit

 

$

61,800,118

 

 

$

3,767,936

 

Condensed Consolidated Statement of Operations

(Unaudited)

 

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

June 30, 2022

 

June 30, 2021

 

June 30, 2022

 

June 30, 2021

Rental Revenue

 

$

12,656,540

 

 

$

6,728,686

 

 

$

24,419,439

 

 

$

11,688,873

 

Refunds and Allowances

 

 

2,455,202

 

 

 

2,545,820

 

 

 

5,118,676

 

 

 

4,199,978

 

Net Rental Revenue

 

 

10,201,338

 

 

 

4,182,866

 

 

 

19,300,763

 

 

 

7,488,895

 

Cost of Revenue

 

 

7,344,720

 

 

 

4,035,238

 

 

 

13,930,882

 

 

 

7,920,531

 

Gross Profit (Loss)

 

 

2,856,618

 

 

 

147,628

 

 

 

5,369,881

 

 

 

(431,636

)

General and Administrative Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Administrative and other

 

 

809,121

 

 

 

701,040

 

 

 

1,559,742

 

 

 

1,258,458

 

Professional fees

 

 

76,500

 

 

 

37,390

 

 

 

305,485

 

 

 

90,404

 

Total General and Administrative Expenses

 

 

885,621

 

 

 

738,430

 

 

 

1,865,227

 

 

 

1,348,862

 

Net Income (Loss) Before Other Income (Expense)

 

 

1,970,997

 

 

 

(590,802

)

 

 

3,504,654

 

 

 

(1,780,498

)

Other Income (Expense)

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

 

137,154

 

 

 

434

 

 

 

587,067

 

 

 

467

 

Interest and financing costs

 

 

(595,742

)

 

 

(542,764

)

 

 

(1,159,879

)

 

 

(660,007

)

Total Other Expenses

 

 

(458,588

)

 

 

(542,330

)

 

 

(572,812

)

 

 

(659,540

)

Income (Loss) Before Provision for Income Taxes

 

 

1,512,409

 

 

 

(1,133,132

)

 

 

2,931,842

 

 

 

(2,440,038

)

Provision for Income Taxes

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

 

750,000

 

 

 

 

 

 

750,000

 

 

 

 

Net Income (Loss)

 

$

762,409

 

 

$

(1,133,132

)

 

$

2,181,842

 

 

$

(2,440,038

)

Basic and diluted earnings per common share

 

$

0.04

 

 

$

 

 

$

0.10

 

 

$

 

Basic and diluted weighted average number of common shares outstanding

 

 

21,675,001

 

 

 

 

 

 

21,315,747

 

 

 

 

Non-GAAP Financial Measures

To supplement the condensed consolidate financial statements, which are prepared in accordance with GAAP, we use EBITDA as a non-GAAP financial measure.

The following table provides reconciliation of net income (loss) to EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, (unaudited)

 

Six Months Ended June 30, (unaudited)

 

 

2022

 

2021

 

2022

 

2021

Net Income (loss)

 

$

762,409

 

$

(1,133,132

)

 

$

2,181,842

 

$

(2,440,038

)

Provision for Income Taxes

 

$

750,000

 

$

 

 

$

750,000

 

$

 

Interest and Financing cost

 

$

595,742

 

$

542,764

 

 

$

1,159,879

 

$

660,007

 

Depreciation Expense

 

$

 

$

 

 

$

2,556

 

$

 

EBITDA

 

$

2,108,151

 

$

(590,368

)

 

$

4,094,277

 

$

(1,780,031

)

EBITDA is defined as net income or loss before the impact of interest, taxes and depreciation and amortization. EBITDA is a key measure of our financial performance and measures our efficiency and operating cash flow before financing costs, taxes and working capital needs. We utilize EBITDA because it provides us with an operating metric closely tied to the operations of the business.

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Boston Celtics Suspend Head Coach Udoka For Team Policy Violations

By Associated Press

and Newsy Staff
September 23, 2022

Coach Ime Udoka was suspended for the entire upcoming season for allegedly having an inappropriate relationship with a woman in the organization.

The Boston Celtics suspended coach Ime Udoka for the upcoming season after a months-long investigation by an external law firm that found multiple violations of team policies, team owner Wyc Grousbeck said Friday.

“We go to great lengths … to run the organization with the central core value of respect and freedom in the workplace from harassment or any unwelcome attention,” Grousbeck said at a news conference a day after the reigning Eastern Conference champions suspended Udoka for the entire 2022-23 season. “This feels very much, to me, like one of a kind. That’s my personal belief. But I’ll have to verify that.”

Neither Grousbeck nor president of basketball operations Brad Stevens would elaborate on the specifics of the violations or the private report that was delivered to the team two days ago. But a person with knowledge of the matter, speaking on the condition of anonymity because the details were not made public, told The Associated Press that it involved an inappropriate relationship with a woman in the organization.

Udoka’s multiple violations involved only one woman, a Celtics spokesman said Friday. No one else in the organization is facing discipline, Grousbeck said, adding that the team will be vigilant to make sure that Udoka’s behavior doesn’t indicate a larger problem.

“I personally don’t believe that they’re a deeper signal,” Grousbeck said. “But we will be — I will be, personally — talking to members of the organization to make sure that that’s the case.”

A first-year coach who’s three months removed from a trip to the NBA Finals, Udoka was suspended days before training camp was to open for the Celtics, who are among the favorites to win it all this season. Assistant Joe Mazzulla was elevated to interim coach through June 30, 2023, though the team said it had not decided about Udoka’s future beyond then.

Grousbeck said the team learned of the problem earlier this summer and immediately brought in an outside law firm to investigate. A report was issued Wednesday. Grousbeck said he met with Udoka, who expressed “acceptance and appreciation for how this has been handled.”

Grousbeck would not say whether the suspension was unpaid but confirmed that it comes with a “significant financial penalty.”

Additional reporting by The Associated Press.

Source: newsy.com

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Alex Jones Set To Testify In Trial Over Sandy Hook Hoax Lies

By Associated Press

and Newsy Staff
September 22, 2022

A jury will decide how much money conspiracy theorist Alex Jones must pay to the families of victims after he was already found liable for damages.

Conspiracy theorist Alex Jones appeared in court Thursday in Connecticut as he and his lawyer try to limit damages he must pay for promoting the lie that the 2012 Sandy Hook school massacre was a hoax.

More than a dozen family members of some of the 20 children and six educators killed in the shooting also showed up to observe his testimony in Waterbury Superior Court, which is about 20 miles away from Newtown.

Jones was expected to be the first witness called, but there was a delay as the court dealt with Wi-Fi issues in the courthouse.

Jones has been in Connecticut this week in preparation for his appearance. He held a news conference Wednesday outside the courthouse, bashing the proceedings — as he has on his Infowars show — as a “travesty of justice” and calling the judge a “tyrant.” He made similar comments on his way into the courthouse Thursday, indicating he may invoke his Fifth Amendment right against self-incrimination and not answer some questions.

“This is not really a trial,” he said. “This is a show trial, a literal kangaroo court.”

Several victims’ relatives, meanwhile, have given emotional testimony during the trial about being traumatized by people calling the shooting fake, including confrontations at their homes and in public, and messages including death and rape threats. The plaintiffs include an FBI agent who responded to the shooting and relatives of eight of the victims.

Judge Barbara Bellis last year found Jones liable by default for damages to plaintiffs without a trial, as punishment for what she called his repeated failures to turn over documents to their lawyers. The six-member jury only will be deciding how much Jones and Free Speech Systems, Infowars’ parent company, should pay the families for defaming them and intentionally inflicting emotional distress.

Bellis began the day going over with Jones the topics he cannot testify about — including free speech rights, the Sandy Hook families $73 million settlement earlier this year with gun maker Remington (the company made the Bushmaster rifle used to kill the victims at Sandy Hook) or the percentage of Jones’ shows that discussed Sandy Hook.

“This is not the appropriate forum for you to offer that testimony,” Bellis said. Jones indicated that he understood.

Bellis said in court on Wednesday that she was prepared to handle any incendiary testimony from Jones, with contempt of court proceedings if necessary.

Jones also was found liable by default in two similar lawsuits over the hoax lies in his hometown of Austin, Texas, where a jury in one of the trials ordered Jones last month to pay nearly $50 million in damages to the parents of one of the children killed. A third trial in Texas is expected to begin near the end of the year.

When Jones faced the Texas jury last month and testified under oath, he toned down his rhetoric. He said he realized the hoax lies were irresponsible and the school shooting was “100% real.”

“I unintentionally took part in things that did hurt these people’s feelings,” testified Jones, who also acknowledged raising conspiracy claims about other mass tragedies, from the Oklahoma City and Boston Marathon bombings to the mass shootings in Las Vegas and Parkland, Florida, “and I’m sorry for that.”

Jones had portrayed the Sandy Hook shooting as staged by crisis actors as part of gun control efforts.

Testimony at the current trial also has focused on website analytics data run by Infowars employees showing how its sales of dietary supplements, food, clothing and other items spiked around the time Jones talked about the Sandy Hook shooting.

Evidence, including internal Infowars emails and depositions, also shows dissention within the company about pushing the hoax lies.

Jones’ lawyer Norman Pattis is arguing that any damages should be limited and accused the victims’ relatives of exaggerating the harm the lies caused them.

The relatives have testified that they continue to fear for their safety because of what the hoax believers have done and might do.

Jennifer Hensel, whose 6-year-old daughter Avielle Richman was among the slain, testified Wednesday that she still monitors her surroundings, even checking the back seat of her car, for safety reasons. She said she is trying to shield her two children, ages 7 and 5, from the hoax lies. A juror cried during her testimony.

“They’re so young,” she said of her children. “Their innocence is so beautiful right now. And at some point there are a horde of people out there who could hurt them.”

Additional reporting by The Associated Press.

Source: newsy.com

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Migrants Sue Florida Governor Over Martha’s Vineyard Flights

By Maura Sirianni

and Associated Press
September 21, 2022

The lawsuit alleges that the migrants were told they were going to Boston or Washington, and were induced with perks like McDonald’s gift cards.

Venezuelan migrants flown from San Antonio, Texas, to the upscale Massachusetts island of Martha’s Vineyard are suing Florida Gov. Ron DeSantis and his transportation secretary for engaging in a “fraudulent and discriminatory scheme” to relocate them.

The lawsuit, filed in federal court in Boston, alleges that the migrants were told they were going to Boston or Washington, “which was completely false,” and were induced with perks such as $10 McDonald’s gift certificates.

“No human being should be used as a political pawn,” said Ivan Espinoza-Madrigal, executive director of Lawyers for Civil Rights, which is seeking class-action status in the lawsuit filed on behalf of several migrants who were aboard last week’s flights and Alianza Americas, a network of advocacy groups.

“It is opportunistic that activists would use illegal immigrants for political theater,” said Taryn Fenske, DeSantis’ communication director, in a statement late Tuesday.

The lawsuit, which also names Florida Transportation Secretary Jared W. Perdue as a defendant, alleges that migrants were induced to cross state lines under false pretenses, a line that some Democratic officials are using to urge a federal investigation.

On Monday, Javier Salazar, the sheriff of Bexar County, which includes San Antonio, opened an investigation into the flights, but the elected Democrat did not say what laws may have been broken. California Gov. Gavin Newsom and U.S. Rep. Joaquin Castro, whose district includes San Antonio, have asked the Justice Department to begin a probe.

Guesswork was rampant among government officials, advocates and journalists Tuesday about DeSantis’ next move, consistent with the element of surprise that he and another Republican governor, Greg Abbott of Texas, have sought to achieve by busing and flying migrants across the country to Democratic strongholds with little or no notice.

Asked Tuesday about speculation that DeSantis may send migrants to his home state of Delaware, President Joe Biden said: “He should come visit. We have a beautiful shoreline.”

DeSantis declined to confirm speculation, based on flight-tracking software, that more migrants were on the move. He again defended his decision to fly about 50 Venezuelans to Martha’s Vineyard, saying their decisions were completely voluntary and, without evidence, that they were in awful condition when Florida got involved.

Additional reporting by The Associated Press.

Source: newsy.com

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Texas Opens Investigation Into Migrant Flights To Martha’s Vineyard

and Associated Press
September 20, 2022

Attorneys say migrants were misled before they boarded flights to the wealthy Massachusetts island.

An investigation is now underway in Texas after Florida Governor Ron DeSantis sent two flights of migrants to Martha’s Vineyard last week. 

Attorneys say migrants were misled before they boarded flights to the wealthy Massachusetts island. 

The controversy comes as Republican governors continue to transport migrants to Democratic-led states in protest of the Biden Administration’s polices at the southern border. 

Migrants have told journalists and immigration attorneys they were singled out and recruited under false pretenses, and given promises of jobs, shelter and aid.

Those 48 asylum seekers, mostly from Venezuela, were looking for safety and security after fleeing a country in economic and political turmoil.  

They arrived at the southwest border in Texas, were processed by federal immigration authorities and released. Some ended up at a shelter in San Antonio, where they informed their attorneys that a crew and a blonde haired woman in particular made promises to them that they could to another city, get shelter, a job and aid, all at no expense.

They were transported on a private jet, paid for by the State of Florida which has apportioned money for immigrant removals in this year’s budget.

When the news broke last week, the governor of Florida took credit, giving the news first to conservative news outlets. Governor Ron DeSantis was eager to frame this as highlighting liberal hypocrisy on immigration. But as the story trickled out about the migrants arrived and who in effect recruited them, it caught the attention of local law enforcement in San Antonio.  

“We want to know what what was what was promised to them,” said Bexar County Sheriff Javier Salazar. “What, if anything, did they sign? Did they even understand the document that was put in front of them if they signed something? Or was this strictly a predatory measure, somebody coming and preying upon people that are here, minding their own business and are here legally, not bothering a soul, but somebody saw fit to come from another state, hunt them down, prey upon them, and then take advantage of their desperate situation just for the sake of political theater, just for the sake of making some sort of a statement and putting people’s lives in danger?”

The migrants flown to Martha’s Vineyard sued Gov. DeSantis and his transportation secretary Tuesday for engaging in a “fraudulent and discriminatory scheme” to relocate them.

The lawsuit, filed in federal court in Boston, alleges that the migrants were told they were going to Boston or Washington, “which was completely false,” and were induced with perks such as $10 McDonald’s gift certificates.

Additional reporting by The Associated Press.

Source: newsy.com

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Texas Sheriff Investigating Migrant Flights To Martha’s Vineyard

By Associated Press

and Newsy Staff
September 20, 2022

A San Antonio-area sheriff is investigating two flights out of his county last week, which Florida Gov. Ron DeSantis claimed responsibility for.

A Texas sheriff on Monday opened an investigation into two flights of migrants sent to Martha’s Vineyard by Florida Gov. Ron DeSantis, but did not say what laws may have been broken in putting 48 Venezuelans on private planes last week from San Antonio.

Bexar County Sheriff Javier Salazar, an elected Democrat, railed against the flights that took off in his city as political posturing. But he said investigators had so far only spoken to attorneys representing some of the migrants and did not name any potential suspects who might face charges.

He also did not mention DeSantis in a news conference that appeared to mark the first time a law enforcement official has said they would look into the flights.

“I believe there is some criminal activity involved here,” Salazar said. “But at present we are trying to keep an open mind and we are going to investigate to find out what exact laws were broken if that does turn out to be the case.”

DeSantis’ office responded with a statement that said the migrants had been given more options to succeed in Massachusetts.

“Immigrants have been more than willing to leave Bexar County after being abandoned, homeless, and ‘left to fend for themselves,’” DeSantis spokesperson Taryn Fenske said. “Florida gave them an opportunity to seek greener pastures in a sanctuary jurisdiction that offered greater resources for them, as we expected.”

The Venezuelan migrants who were flown to the wealthy Massachusetts island from San Antonio on Wednesday said they were told they were going to Boston. Julio Henriquez, an attorney who met with several migrants, said they “had no idea of where they were going or where they were.”

He said a Latina woman approached migrants at a city-run shelter in San Antonio and put them up at a nearby La Quinta Inn, where she visited daily with food and gift cards. She promised jobs and three months of housing in Washington, New York, Philadelphia and Boston, according to Henriquez.

Salazar said the migrants had been “preyed upon” and “hoodwinked.”

Some Democrats have urged the Justice Department to investigate the flights, including California Gov. Gavin Newsom and U.S. Rep. Joaquin Castro, whose district includes San Antonio.

A federal investigation might be complicated, however. It’s not clear whether anyone boarded buses or planes unwillingly, or that their civil rights were violated. The rights of asylum seekers arriving to the U.S. are also more limited because they are not citizens. The Constitution, though, does protect them from discrimination based on race or national origin and from improper treatment by the government.

Additional reporting by The Associated Press.

Source: newsy.com

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A New California Law Could Raise Minimum Wages

California Governor Gavin Newsom signed a bill that will give minimum wage workers more say in their pay and work conditions.

Fast food chain workers in one state could soon be making triple the federal minimum wage. And that shift might have national ripple effects for low-wage workers. 

It comes from a recently passed law in California that gives new power to workers across the fast-food industry to set standards on wages and working conditions.  

It’s a system that could start a new way for workers in other states to fight for a living wage, but restaurant owners, fast food companies and trade associations worry it could raise food prices in an economy suffering from inflation. 

So, where did this come from? And how will it affect the fast-food industry? 

California passed AB 257, also known as the FAST Recovery Act. It’s a law that Governor Gavin Newsom signed on Labor Day. 

“We recognize there are sectors of our economy where we’re falling a bit short and one of those areas is fast food workers. A bill that empowers our workers, particularly in that sector giving them more voice, giving them more choice, creating a new council, and I’m proud on Labor Day, to sign that bill and enshrine it in law,” said Newsom.  

It creates a fast food council system that will consist of workers, industry representatives, franchise owners and state officials. They’d work together to set labor standards for workers, including the minimum wage. 

We should note we don’t know yet what number they would land on for a minimum wage, and an increase may be gradual. But the law says it can be anything up to $22 an hour.

That number on its own could be groundbreaking. It would be a 40% pay hike from the state’s existing minimum wage of $15 per hour for most workers. And it covers more than half a million employees who work at restaurants with 100 or more locations.

California is the third-most expensive state in the U.S. to live in and has half of the top ten most expensive metro areas, according to the Bureau of Economic Analysis.  

Anneisha Williams, a single mother of six, is an employee at Jack In The Box. She’s fighting for $15 an hour.

“That will go to my bills because my rent has gone up. You know, they talk about how minimum wage is going up. We need it because the cost of living went up,” said Williams. 

Fast food workers in California, like Los Angeles have had it especially rough in the past few years. Her challenges have led her to join the Fight for 15 Movement advocating for a higher minimum wage. 

A study earlier this year by the UCLA Labor Center surveyed fast food workers in Los Angeles. It found that in addition to limited protections from COVID-19 infection, many workers faced threats of wage theft, lost hours and a lack of paid sick leave. 

“I did lose out on wages, you know, because I had to take off for school. And they don’t pay you for taking off. I don’t have sick time to take off for work, so I had no choice but to lose out on those wages for the time that I did so. It was two, on two occasions that I had to miss out for a couple of days out on work because of COVID,” said Williams. 

Nearly two-thirds of workers experienced wage theft, including a lack of reimbursements for supplies, late paychecks and limited breaks. And nearly a third of workers, including Anneisha, said they weren’t provided with paid sick time. 

“With this bill, AB 257— that will help us be able to collect our wages that we missed out on in case, you know, things like that happen. Our kids get sick or we get sick or something, you know? That right there would have our back, you know, that would be it for us. You know, who, who wants to miss out on money when they’re sick?” she said. 

Businesses already have some worries about this. Large chains including Chipotle, Chick-Fil-A and In-N-Out are sponsoring efforts to block the bill. 

The National Restaurant Association and the International Franchise Association put out a joint statement condemning the bill for unfairly punishing small businesses and portraying restaurants as bad employers. They worry the law could lead to food prices rising too quickly.  

Jeff Hanscom is the vice president of state and local govt. relations at the International Franchise Association. 

“There’s no doubt that 257 and the wage council will ultimately, ultimately lead to higher labor costs, which will then ultimately lead to higher food costs for the consumer. And for franchisees who are already operating on very thin margins and not just franchisees, it will affect restaurant owners who are already operating on very thin margins. You have to pass the cost along somewhere,” said Hanscom. 

But the numbers seem to indicate the effects on prices may be relatively small. Michael Reich, a UC Berkeley economist and wage expert, told Newsy that a study by researchers at the Boston Federal Reserve and MIT found that a sudden minimum wage bump from $15 to $22 would increase prices, but just a pinch. 

“My calculation is that just looking at this business model, the increase in prices going up to $22 would be about 2 to 3%. So that means for something like a $2 Burger King bacon cheeseburger, is one example, or the Taco Bell burrito, that’s $2. That’s about a nickel increase. That isn’t going to really deter people from buying those items,” said Reich. 

Industry groups have also supported a referendum that could block the law from taking effect. If they get enough signatures by December 1, the law would be put on hold until a statewide referendum in 2024. 

Industry advocates warn this law targets not just large fast-food providers, but the smaller, usually locally-owned franchisee businesses that run individual locations.

“We’re talking about nearly 15,000 franchise businesses that are impacted by 257 or at least 15,000 units in California that are part of chains with 100 or more locations. But 70% of those — 70% of the franchisees in California — only own one store,” said Hanscom.  

Legal challenges could also be on the way, as there are questions about whether this setup that allows bargaining for industry-wide standards could be blocked because it’s not one covered by the existing federal law called the National Labor Relations Act. 

San Francisco-based lawyer Ellen Bronchetti works with employers in labor law cases and says that businesses could use this route in an effort to block AB 257 from taking effect. 

“There’s an argument that the NLRA is the sole and exclusive law that should govern how employees can work together collectively to force their employers to increase, to provide better wages and working conditions,” said Bronchetti. 

If the council system takes effect, this could have consequences for fast food workers in other parts of the country, if other states try a system like this that relies on bargaining agreements that cover entire industries. 

“This type of system has had various degrees of success overseas in places like Europe and South America and Canada, but it’s not recognized as a standard in the United States. This type of council proposal in the statute, in effect, does create what I would view as the first of its kind sectoral bargaining mandate that we’ve seen, and it could have a huge ripple effect if it’s successful not just on the fast food industry, but on other industries,” said Bronchetti. 

And companies are already moving forward, at least on minimum wage increases. That’s in line with data showing that the previous minimum wage increase in California, a gradual rise to $15 an hour, drove wages even higher than that. 

“Wages have been rising since just before the pandemic and through the pandemic, and especially in restaurants. And so now the actual entry wage, the starting wage is well above $15. It’s more like $17, $18 in many parts of California,” said Hanscom. 

Source: newsy.com

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