I've never read a more convoluted annual report than the one for Level Brands.
I read this thing front to back, including the associated documents: contracts, leases, related party statements, share ownership documents, stock purchases and shares granted in related companies and so on and so on...
And when I was done, I tried to short this stock immediately.
Unfortunately, it is considered "hard to borrow" and therefore can't be shorted by my broker.
So clear disclaimer: I have no financial interest in this time in this stock.
I'm sure the trolls are going to come out, and if they feel this company is a magic stock rocket that's going to boom on the NYSE ( I'm betting on delisting ), please please please - create an option chain for puts at the market value right now and I'll buy them all day long.
So allow me to start with this glaring problem from the initial annual filing that will set the tone for everything I post later:
"As described later in this report, our management has determined that, as of September 30, 2017, we did not maintain effective internal controls over financial reporting"
Just after the IPO goes live in November, and under the stewardship and fiscal responsibility of CEO Martin Sumichrast and CFO/COO Mark Elliott, they did not maintain internal controls over financial reporting.
(Spoiler alert: As I unravel this annual report and the team that filed it, I will be spotlighting the lack of financial controls and who is drinking the investors' milkshake. Hint: It's never the investors)
Later in the same report, this management brain-trust follows up with this comforting get out of jail free card:
"Changes in Internal Control over Financial Reporting:
There have been *no changes* in our internal control over financial reporting during out last fiscal quarter that has materially affected or is reasonably likely to materially affect our internal control over financial reporting."
In other words, despite admitting they conveniently lost control of financial accounting, they admit that they have done nothing to correct it.
Shocker.
