MD&A Oct 30th release worries meSo I read that 22 page release three times, and it worries me.
-They have no money
-are 12 million in debt
-yet salary expenses have increased 400% over the last years period, even though the head count of directors has decreased
-they dont have funding to expand their laval faciltity (expected to cost 10-15miilion), and they arent even sure they want to expand
-keep in mind they only own 75% of this I believe (this 10k sq ft facility is THE SMALLEST of any companys LP application and they only own 3/4s)
-They dont know how they will rasie the required 200-250 million for weedon
-They keep playing musical chairs with directors, even their Investor relations guy Terry doesnt seem to be with them any longer
-They are late on the payment schedule for their columbia venture
-they are late on the sept 1st payment of $62K to sherbrooke college
-The Richmond valley council has backed out of their partnerhsip for the australian project. This was a huge red flag for me.
When the local municipal/political system has distanced itself from you, you are late across the board on payments, and you have no license, revenue or fully operational faciltiy.... I mean.
Im curious as to where all the funding raised through PPs has gone.
Im still holding but man, things dont look good. How are they going to raise the 250 million for weedon? I cant see them securing a loan faciltity. They go on to say they will raise the funds through equity/PPs. But i mean to raise that much they will have to relase 300 million shares, bringing the outstanding amount to almost 500million. Even at $1 that would give them half a billion dollar market cap. maybe im reading this wrong.
Managemnt has not been transparent, they have never met any of their deliverables, and are now late on multiple payments. The Sherbrooke "startegic partnerhsip" was them cutting two cheques totalling $124,000. It was just a pump, and they havent even finailzied the second payment of $62,000. I think that was due in sept.
Then we dive deeper to see the failed maple ridge facility, the budly app purchased for 1.8million, the advertising campaign that cost 2million, but is just a website landing page (havent seen one billboard they planned on using for marketing).
Page 12 of the report, last paragraph explicitly states that their working capital is none existent and is insufficient to fund current operations. (Maybe all you directors shouldnt pay yourselves 20k a month while you have zero revenue)
I wont even touch the museum and university planned at the weedon facility.
Construction at weedon (and australian project for that matter) are two year projects when/ if they receive funding. And using history, they never hit any targets, so 2 years seems like a hope, not an expectation.
A bunch of kickbacks, finders fees and back door payments. Extremely shady guys. Ive been holding for 16 months, and im going to pull chute if it goes above $1
Now all this being said, if they do secure funding through a loan faciltiy and dont need to dilute themselves by 200%, maybe, maybe in two years they may become a large player. the extrenal optics look like this was a classic pump and dump though. Not one director from 2014 is still with the company.