RE:News outTrader124 wrote:
but i guess nobody care. Everybody is waiting to see the details of that reverse split with the merging
As usual, the latest investment raises a number of questions.
It's hard to believe the underlying business (Herban Industries) has revenues that can support a $250k per year repayment of the $1 million investment. This would be a 25% per year cash return, which is GRC's stated target. Even at a high royalty rate of 2.5%, this would require revenues of $10 million per year.
To put this in perspective: GRC director Peter Kampian is the CFO of Dionymed and also became a director of publicly-traded CannaRoyalty in December. CannaRoyalty claims to be a leader in the California pot market, investing across various stripes of the industry. They have a market cap of around $180mil and just reported 2017FY revenues of around $3 mil (Q4 revs at $1mil, net loss at $4.5mil). Certainly not undervalued!
In any case, it seems unlikely Herban has 3-4 times the revenue of CannaRoyalty. So this investment doesn't seem to fit Grenville's self-prescribed model. Instead it appears to be speculative venture funding in a fragmented and bubbly market (with a related party, no less). And given Kampian's connection, one has to wonder how/why Grenville scored this fabulous investment opportunity ahead of CannaRoyalty, which is a bigger player with a better balance sheet that also invests in royalties.
Herban is led by Edward Fields, who was a successful founder of HotChalk, an e-learning company. Herban appears to be a continuation / reinvention of a company called "Alexander Fields", which was a pot brand developed by Zander Fields. Zander is presumably Edward's son, and previously worked for dad at HotChalk. It's unclear what role Zander now plays in Herban, though Herban is selling the Alexander Fields brand and Zander's "patent pending" dosing battery.
Herban is also apparently employing a referal marketing SaaS solution called ByProxie. ByProxie is led by Zoe Fields, presumably Edward's daughter. It was initially developed internally at HotChalk while she was working for dad, and was then spun off with a focus on automotive dealerships. It has now pivoted to focus on auto dealerships and cannabis, via Herban.
None of this is to say the people involved are losers and this investment is doomed to fail. But it sure looks high risk, nepotistic, and opaque.