321PMAC wrote: A collection of thoughts, experiences, research, references and correlations - Take from it what you will and be thorough in executing your own due diligence.
Wishing the best for all previous, current and future TGIF shareholders. I however, at this time, no longer carry any vested interest in the outcome of TGIF.
No. 1 Do you live in Nevada or have you visited Las Vegas in the last 6 months? Have you systematically contacted and questioned operational dispensaries? And if so, in a poling sample wide enough to mitigate bias? If you cannot answer yes to the above questions, your understanding and perception of actual market value and brand recognition is the result of bias and partiality.
Consider, TGIF has a budget of $1.12m allocated towards marketing through year three. BAMM on the other hand has not spent any capital on marketing initiatives to date.
TGIF's original investors presentation contained a detailed projection overview, including a break out of overhead, COG's, LTF's, and marketing expenses, over a three year time horizon. My initial TGIF analysis incorporated many of those metrics, almost all of which were further expanded upon and compared relative to one another. Shortly after receiving a request from TGIF to view the analysis, the original investors presentation was replaced with an amended version, excluding the prior projection overview metrics.
No. 2
See Weedmaps Nevada - an impartial catalogue of all things cannabis, including the opportunity for users to rate and follow brands. BAMM flower is currently rated 4.5/5 on 21 reviews with 372 followers compared to TGIF flower rated 4.1/5 on 7 reviews with 105 followers. The impartiality of these numbers, provided by patrons and participants removed from the bias of holding an investment, should not be taken lightly. Further, consider how many other existing brands are operational in Nevada with higher ratings and far higher quantities of followers.
No. 3
The majority of Nevada cultivation licensees, 88 of them, operate in 10-20k sf facilities. The cultivation marketplace is highly fragmented, of which, BAMM and TGIF are mid-to-small sized, respectively.
No. 4
I've fielded dozens of calls to Directors, Insiders and Management of both companies. While TGIF is accessible and expeditious towards addressing inquiries, the content of response is always tightly regulated and filtered. It took months at one point to receive clarification on the size of cannabis canopy under cultivation when I inquired about Brayden Sutton contradicting himself in two separate interviews regarding canopy size.
BAMM on the other hand arranged for a conference call within days of inquiring, bringing both Leonard Clough, president of BAMM and Robert Hasman, Director & President of NMG, into a call to discuss, at length, operational inquiries.
No. 5
Brayden Sutton, director and president of TGIF, owns 3.25m common shares, 102 debenture units and ~2m options with warrants from various placements, totaling 6m shares when fully exercised - this represents a controlling interest of approximately 2.4% of TGIF.
Robert Hasman, director of BAMM and president of NMG, along with his partner Kevin Hooks, own 6m and 4m respectively, for a controlling interest of approximately 21% of BAMM.
Excluding extracurricular involvement of each individual, without question the BAMM team is substantially more invested in their company.
No. 6
Brayden Sutton is currently a registered insider of Friday Night Inc., International Bethlehem Mining Corp., Waterfront Capital Corporation, Venzee Technologies Inc. (ceased 01/05/2018), & Cannabis Growth Opportunity Corporation. To think that he is 100% dedicated to TGIF is false; he has openly stated on multiple occasions his intent / need to find a new president for TGIF.
No. 7
My opposition towards the acquisition became more pronounced through late January. As the intensity of my communication grew between each of the management teams, as well as the CSE, BCSC and OSC, so did my arguments against the success of the acquisition in public forums. I received a call late January from TGIF, inquiring if I would be interested in assuming their IR role. After a call the following day with Brayden & Joe, I was forwarded a consulting services contract. I refused the terms of contract, requiring the following amendments - a limitation towards personal liability by entering into an agreement through an entity of incorporation and remuneration to match that of their current IR personnel. Needless to say, an amended contract was never forwarded. My personal opinion is that the associated implication of personal liability and the not so subtle reminder to cease participation in public forums as a requisite of the position was an attempt to limit agitation and aggregation of minority interests.
No. 8
There is no such thing as mutual termination. First, consider that the contemplated acquisition was based upon value relative to one another. It was not a monetary based valuation, as such, market conditions are irrelevant. Whether stock prices moved up or down, together or opposing, would have zero implication in a deal that is based upon the value of one company relative to the value of another. The only conditions that could affect such a deal would be a change in fundamental value (i.e.: renegotiated terms, spin-out, etc...) or a change in regional market demand (which, considering NV consumption to-date, is certainly not the case). TGIF had complete and transparent access to BAMM's operations and finances. If TGIF wanted to back out of the acquisition, amended acquisition terms would have never been issued; the termination was based upon action (or perhaps inaction) by BAMM.
No. 9
NMG was one of the first medicinally licensed cultivators in the State of Nevada; they have been cultivating and selling since 2014. Their operational cannabis canopy will increase by ~400% upon renovation of an existing building, immediately adjacent to their current facility. The renovation costs are currently estimated at $130/sf, totaling ~$3.75m usd. Completion of purchase and renovation is slated to begin upon issuance of rezoning approval.
No. 10
A conservative estimate for construction of a new facility is $200-225/sf, inclusive of FFE. A 100k sf facility, excluding land acquisition, will cost ~$20-22.5m usd. TGIF does not possess the current capital to achieve expansion of this magnitude. The previous News Release reference to a site with capacity for a 150k sf facility and the 'accidental' social media post of a new 100k sf facility are purposely misleading. The latest social media post of a facility rendering was a repost from Nov 10th, a strategic attempt to balance downward pressure from a failed acquisition with speculative belief in a new facility. I do believe news of a new facility will be released shortly, however, I suspect the proposed development will be limited to the previously anticipated 33.5ksf building footprint with a potential for a second story. Not only will this approach avoid delays with additional administrative approvals regarding use permitting on the yet to be acquired land, it is also likely closer aligned to their existing capital capacity.
A 9 month construction schedule for a ~65k sf facility, still requiring completion of contract documentation and issuance of construction permits, is extremely aggressive. Realization of operational revenue from expansion is unlikely until the Q3 reporting of the 2018-2019 fiscal year (filing required ~ July 3, 2019).
No. 11
The issuance of 750k compensation & consulting shares at $0.80 on 01/05/2018, based upon management performance, while TGIF was trading at ~$1.00/s was premature. The company hadn't traded above $0.80 for more than 10 days prior to issuance of compensation shares.
References
TGIF Instagram Post - 100k sf facility
WeedMaps Nevada, Brands
Las Vegas Building Permits