Aleafia’s 3 year convertibles – a portent, or just bad timing?

For $1,000, you too can purchase Alefia’s 8 1/2% convertible debenture issue. It was mentioned yesterday by the company, but the press release came out today. Each debenture includes 680, 3 year at the money warrants (I price them at about a $1 each), plus, you get to buy shares with that $1k when the debentures mature in three years - if you so want. Few companies issue convertibles with the intent on having to pay the principal back. And the sweetener on this - is incredibly expensive for existing shareholders. $680 in free options included per $1k debenture bought, and, note there’s also no…

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Harvest One – Structure and Current State – 06/19

We haven’t looked at this outfit for a little while, but they’ve been on our radar since January 2017. An early entrant, they did several paid placements along with their raises, and provided great examples of early equity raises with attached optionality. They had many early adherents - and folks who suggested their moon landing would be epic. Like, Apollo 9 kind of epic.  Well, that hasn’t happened yet, and most of the cheerleaders have since been kinda quiet. HVT does have Dreamwater, a couple of recreational retail brands that were announced early on (before many others). Yet despite being an early arrival, the…

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C21 Investments – Structure & Current State – 06/19

Way back in early March, I ran the financial statements of this outfit. We saw an effective shell company renting various parts of the value chain, with options to purchase on much of it. A couple of the deals were expected to be struck/closed in short order.  With 40 pages of financials, and a 43 page MD&A, there’s a load of errata to wade through: yet the MD&A is wafer thin despite its' size. The EFF deal closed. All paper, and really just assumed mortgage payments. It looks and feel like a distressed asset from the start. Curious to see segmented reporting on it.…

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Patent #8 CBN for Neurobehavioral Disorders

Next patent up is titled “Composition for the treatment of neurobehavioral disorders”, owned by Cannabis Science Inc. The patent has been approved under US20160129060A1 and is set to expire in 2034. Cannabis Science Inc has a focus on use of medicinal cannabinoids for a variety of applications through their pre-clinical and early clinical trials. According to their website they have yet for any of their compounds/formulations to Phase 2, with about half still in the pre-clinical trial stage.  Starting with the abstract:“The invention relates to a composition for use in the treatment of neurobehavioral disorders, a Cannabis plant extract comprising Cannabinol preferably with other constituents…

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Harvest One 1Q F2019 – March 31, 2019 “In Pictures”

Income Statement Drivers and Breakeven: Trend Sales decline 20% QoQ to $3.0 million. They had FG inventory (see “Gas in Tank”) of $2.8 million to start the Q, did they not have the “right type” of FG inventory??? Income Statement Drivers and Breakeven: Peers Gross Margin: Trend & Peers Gross Margin: Larger Peer Base SGA and SBC: Trend . SGA and SBC: Peer Breakeven Sales for +Net Operating Profit divided by Current Sales Breakeven Sales for +EBITDA divided by Current Sales “Gas in the Tank” FG dropping in face of a Sales drop means throughput wasn’t there. WIP double QoQ so something to keep…

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