EDNT stock pops on a joint venture deal with 4Keeps Roses. The partnership will seek to grow distribution to up to 3,000 more retail stores by Valentine’s Day 2020.

4Keeps Roses, Inc. is a Los Angeles based company that specializes in preserved roses, flowers and associated gift products. Edison Nation is partnering with the company to expand the distribution of their branded flowers that are specially treated to last two or more years. The flowers are currently sold online at https://4keepsroses.com and at a leading convenience store chain. Expansion to 3,000 other retail locations is currently underway in the U.S. and Canada.

“We are truly excited to partner with Edison Nation and look forward to expanding our footprint into additional mass market outlets, amusement parks, and globally,” said Ronny Mirel, Dianne Magsari, and Sidney Richlin co-founders of 4Keeps Roses.

“We expect our product sales to increase as we approach the Valentine’s Day holiday and to steadily build a year-round rose program that will be a great addition for any retailer that currently sells flowers.”

“Edison Nation is in the business of innovation, and we feel strongly that developing flowers which last more than two years are an incredible example of just that,” said Chris Ferguson, CEO of Edison Nation, Inc. “We are truly looking forward to this venture and uncovering further ways Edison Nation can help 4Keeps Roses scale.”

Edison Nation, Inc. is a vertically integrated innovation aggregation and full-service product development and manufacturing company, offering innovation sourcing, design, sales, fulfillment and shipping services. Edison Nation’s model is to provide a risk mitigated platform that connects innovators with companies to bring new products to market.

On August 20, 2019, Edison Nation announced that they will be entering the home and kitchen consumer product industry with their new brand Lily and Gray Living.

Lily & Gray Living is a brand of essential home good products that are easy to use, and affordable. This brand is dedicated to making the smaller things in everyday life, better. Lily and Gray Living products will be available on Amazon December 1st, 2019. The inaugural product line will include a unique twist on 4 popular home and kitchen items: a durable loofah stick called Shower Lily, a 6 in 1 cake stand, a multi-function cutting board, and a collapsible colander set. In addition Edison Nation launched a Lily and Gray innovation search on the innovation platform to leverage the inventor community for their distinctive ideas on compact personal care organizers. Innovators can submit their ideas at https://app.edisonnation.com/lilyandgray. Deadline to submit is September 23, 2019.

“I am pleased to be entering the home and kitchen goods space with the brand Lily and Gray Living. Our core strength at Edison is taking simple everyday products, and finding distinguishable features to improve upon them and make them unique,” said Chris Ferguson, CEO of Edison Nation, Inc.

On August 15, 2019, Edison Nation reported for the second quarter that revenue and gross profit increased 36% and 61.8%, respectively.

“During the first half of 2019, EDNT achieved significant revenue growth of 49.7%, to $11.7 million, for the six months ended June 30, 2019, driven by the continued success of our IP and the scale of our consumer brands ,” said Chris Ferguson, Chief Executive Officer of Edison Nation. “The company continues to aggressively source innovative ideas via our proprietary Edison Nation Innovation Platform, which selects the ‘best-of-the-best’ inventions utilizing proprietary algorithms, and brings them to market quickly. EDNT’s intellectual property, media, and consumer product launch engine will continue to drive growth in 2019 and beyond. Simultaneously, we are leveraging our combined platform to achieve significant operational and cost efficiencies”.

For the three months ended June 30, 2019, revenue increased 36.0% to $5.97 million, compared to $4.39 million in the same period in 2018. The increase in revenue was primarily attributed to successful product launches and scaling of EDNT’s acquired brands throughout 2018.

Gross profit increased 61.8% to $2.04 million in the second quarter of 2019, compared to $1.26 million in the second quarter of 2018. Gross profit margin was 34.2% in the second quarter of 2019, compared to 28.8%, in the same period in 2018. The increase is primarily a result of a favorable product mix of goods sold to customers.

Operating expenses were $3.4 million in the second quarter of 2019, compared to $1.7 million in the same period in 2018. The increase was primarily attributable to operating expenses incurred related to EDNT’s acquisition of Edison Nation Holdings, LLC and the transactions between EDNT’s subsidiaries, CBAV1, LLC and Cloud B, Inc.

Net loss in the second quarter of 2019 was $1.8 million, or ($0.30) per basic and diluted share, compared to a net loss of $0.7 million, or ($0.18) per basic and diluted share in the same period in 2018.

Recent Operational Highlights:

  • Edison’s Innovation Platform sources product ideas from an organically grown community of 200,000+. Coming December 2019, a mobile application will serve to facilitate further platform engagement.
  • Announced the return of Emmy award-winning TV show, “Everyday Edison’s” with a February 11, 2020 premier – Thomas Edison’s birthday – on a leading SVOD. This show is an inspirational reality TV series produced under license by Edison Nation, which chronicles the stories of first-time inventors as they launch their unique products into the marketplace in conjunction with the Edison Nation Online Innovation Platform. “Everyday Edisons” is produced by six-time Emmy Award winning producer Michael Cable.
  • Developed the Edison Academy, inventor centric master classes, teaching the fundamentals of product development and inventing. The Academy serves as a resource to provide ongoing value to the organically grown Edison community of 200,000+, while captivating prospective inventors previously disengaged from Edison Nation. This initiative creates revenue opportunities in the form of recurring monthly and annual subscription fees.
  • Appointed Toper Taylor, a leading entrepreneur and pioneer in the kids and family entertainment and consumer products industries, to its Board of Directors. Taylor has previously served as president of Nelvana, Cookie Jar, and Network of One. Edison Nation is excited to welcome Mr. Taylor to the Board at a vital time as they seek to expand their media related activities.
  • Launched exclusive new products for its theme park and entertainment customers, including Disney Parks and Resorts and Universal Studios including; Avatar Light Up Wood Sprite and Star Wars Baton and Shield Set for Disney Parks and Resorts; A Monsters Inc. interactive flashlight for Tokyo Disney; and a Jimmy Fallon microphone for Universal Resorts.
  • Licensed Ezy Dose Medi-Spout pill assist cap to Apothecary Products, a global leader in consumer wellness products. It is the second product licensed by Apothecary Products from Edison Nation’s innovator community in what is an enhanced effort to license Edison community ideas to established brand partners.
  • Expanded their Online Innovation Platform with the “Edison’s Design Challenge” that will encourage members of the innovation community to contribute to the design and innovation of products already in Edison Nation’s product launch pipeline.
  • Expanded the Edison Online Innovation Platform with its Entrepreneur Partnership. The Entrepreneur Partnership is an opportunity for brands to further leverage Edison Nation’s inventor community and proprietary range of services to launch new products or scale additional product line.

EDNT stock looks like a good setup with the Supertrend buy signal on August 27, 2019.

Supertrend buy signal triggered in pre-market trading on August 27, 2019

We are not adding EDNT stock to the long-term buy and hold portfolio on GST at this time. This is a high risk, high reward short-term setup at this time. The financials of the company are just too weak to meet the stringent requirements of the GST portfolio at this time. Nevertheless, EDNT stock looks like a compelling swing trade setup the readers could make money from. We really like the new partnership with 4KeepsRoses which could turn into a blockbuster seller but not sure about the ugly white bucket the roses sit in versus the look of the long elegant stems. Definitely a high risk, high reward gambit.

Disclosure: We do not hold any position in EDNT stock.