MPX Summary and Outlook Today, we need to talk about MPX BIOCEUTICAL CO (OTCMKTS:MPXEF), which recently released several corporate changes that created large excitement in the market.
A name change was executed.
But, that’s not all.
September and October were very busy months for the company.
It celebrated an annual shareholders meeting and signed several deals with partners in the marijuana industry.
Additionally, the most significant news is that it received a $10 million credit facility for making further acquisitions and capacity expansion. That’s why we believe that good news could be coming.
Company Logo
Have a look at how the market reacted to the announcements. In a few sessions, the share price went up from $0.35 to cross the $0.60 share price level. For those who need a calculator, that is a more than 70% return.
But, we believe that the most significant is not that. In our opinion, the spike in volume is what should be drawing the attention of market participants. More than 0.8 million shares changed hands some days, which is quite astonishing. We believe that this fact proves that the market interest in the stock is rising.
Have a look at it:
1 month chart for MPXEF
Business
MPXEF is an Ontario company providing various services to “two medicinal cannabis enterprises in Arizona operating under the Health for Life (dispensaries) and the award-winning Melting Point Extracts (high-margin concentrates wholesale) brands.”
We encourage readers to watch the following very recent video of company’s CEO, Scott Boyes. He explains the trajectory of the company as well as its activities.
It was released yesterday, thus readers will be able to have an edge over other market participants who may see it in three weeks:
Additionally, the company also owns properties in Massachusetts, wherein the company provides services to three dispensaries, and working towards obtaining a third licensed dispensary in Arizona. In the video, it is said that the last dispensary will open next month. Readers could expect a share price increase when this is finally announced.
Furthermore, the company notes that it is looking to acquire other cultivation and production wholesale business in Las Vegas, Nevada along with three dispensaries and a production license in Maryland.
Readers need to be very alert on the company, as announcements regarding new acquisitions could make the share price spike.
MPXEF also leases a property in Owen Sound, in which the company is trying to get a cannabis production and sales license. An application to Health Canada has been already filed, thus we need to wait for regulators to confirm. Finally, the company is also in the legacy nutraceuticals business.
Acquisitions
We believe that most significant in the history of the company are the acquisitions.
On January 19, 2017, the company completed the acquisition of all of the issued and outstanding membership interests of the following companies for the purchase price of $33,595,000:
- S8 Industries, LLC, an Arizona limited liability company
- S8 Management, LLC
- S8 Rental Services, LLC
- S8 Transportation, LLC
- H4L Management East, LLC
- H4L Management North, LLC
It was a massive transaction where the company went from having $72,000 in assets in 2016 to show $54 million as of March 2017. Market participants obviously appreciated the reverse merger and the market interest in the stock increased.
The company did not stop there.
On March 14, 2017, PerkAZ Property LLC, an Arizona company, was acquired for $5.3 million. It was paid with 1,333,300 shares and $3,999,900 in cash.
Recent Developments
As the spike occurred in November, we will revisit what was released around that date.
On October 13, 2017, the company released a definitive membership interest purchase agreement to acquire GreenMart of Nevada NLV, LLC. The new business is a licensed recreational and medical cannabis cultivation and production and wholesale company from North Las Vegas, Nevada.
What’s pending?
The Nevada Department of Taxation will only need to approve the transaction. Thus, we need to be alert, as the company may release soon the approval announcement, which could make the share price increase.
It may be a great catalyst for the stock, as this target is the owner of a production facility, with capacity to produce 1.6 million grams of dried flower and 85,000 grams of high-margin concentrate. The price of $17.82 million will be paid in a combination of shares and debt.
On October 24, 2017, the company announced an initial drawdown of $10 million. The most significant is what the company said about the use of this money: “making further acquisitions, capacity expansion and the development of new facilities in Massachusetts and Maryland.” This is what Scott Boyes CEO said about it:
“The funds available to us through the credit facility are an attractive form of capital that will allow the Company to continue to aggressively pursue our expansion strategy and also fund our organic growth plans currently underway.” Source
Additionally, on October 26, 2017, the company released that it had started to work on its cannabis cultivation facility in Owen Sound. Furthermore, it noted that to ensure that Health Canada provides the licensed producer status to the company, it had hired different law firms and consultants: Bennett Jones, David Hyde & Associates, Eurofins Scientific, Ample Organics, and Sketch Design Build Inc.
Finally, on November 2, a name change had been approved in the last shareholders meeting; from The Canadian Bioceutical Corporation to MPX Bioceutical Corporation. Additionally, the ticker had been changed from MPX to MPXEF. The company highlighted that the new name “mirrors the brand name of the well-established cannabis concentrate products and reflects our strategic vision of the company.” The market seemed to like the idea.
Conclusion
Currently trading with a market cap of $139 million, MPXEF is an exciting story among small caps. With $7 million in cash, $61 million in assets and only $28 million in liabilities, the company seems very well financed in the rapidly growing global cannabis market. To sum up, there is a lot to like with MPXEF.
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Image courtesy of Beverly Yuen Thompson via Flickr
Disclosure: We have no position in MPXEF and have not been compensated for this article.
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