True Leaf Dog House about to tip over ..... hope not so Doghouse about to be tipped over and sucked away by the nearby creek that will flood this spring…. Okay it is time to look at the 3rd quarter results for True Leaf and see what progress was made for the long-time loyal shareholders. Full disclosure: I presently do not own any True Leaf shares and have no intentions of bashing share prices down to load up on what many of you have noted is a company very close to bankruptcy. I love my pets and really hoped this company would rise to being an ethical superstar in pet foods. For now I am invested in Silver metals and quality Banks that pay great dividends.
Okay… make sure you carefully look at the True Leaf published financials. They had $410,500 in cash remaining, lost over $5 million in the last 8 months, and are sitting on $1.46 million of liabilities, and $2.8 million in notes receivable (money owed to dah boyz to be repaid over the next couple of years). Sales as many of you noted were down and still miniscule in the scope of the project undertaken. Sitting on an inventory of $993,529 , up from $332,000 which is an indicator sales are sluggish or maybe they spent a pile of cash to have their third parties build product in anticipation of great future sales demand. Without much cash the company handed out $768,473 in shares over the last 9 months to pay various employees for services. To protect senior butts from being removed via angry shareholders, three of the top guns have severance clauses of $195,000 payouts neatly in place if they are ousted.
So…. Let’s sell off physical assets to raise cash. The land value they have on their books is $3.38 million and for their building they claim $7.86 million. Fair market value in B.C. is likely presently closer to the most recent BC Property Assessments, that being $1.55 million for the land and $6.93 for the building. Simply renting out the facility would not provide enough cash flow to keep True Leaf solvent.
The latest company news release says nothing about cultivations even being started in the new building, and instead wanders off into discussion of basic hemp and oil of oregano. There was some indication that maybe the people CBD/THC market is where they should go via the generic drug companies. Gone are the days of rap rah hyped news blurbs expounding the potential of True Leaf and instead a paragraph explaining it is hard to attract more investor money. Investors love and invest in hype and exit on no news. Hope there is some money to pay the City of Lumby property taxes at least. For the very loyal shareholders, I hope this company does turnaround, but it will need completely new owners and management to take over and get focused on what actually makes money.