I need to make a correction related to the valuation of the water source. As of December 30th 2020 (after the announcement of the Naturo acquisition) the following statement was issued by Bevcanna -
"BevCanna will also take possession of one of Naturo's most valuable assets, their exclusive onsite alkaline spring water source, independently valued at $18M." As water resources become increasingly more scarce, BevCanna expects that the proprietary resource will contribute to a strengthened balance sheet and to BevCanna's unique positioning within the exploding plant-based and cannabis sectors." This was the basis on which the valuation was based :
Significant valuation inputs include:
Infinite useful life of the Water Source;
Projected production volume on two production lines with volumes between 8,400,000 gallons per year and 21,000,000 gallons per year;
Industry average royalty rate of 8%; and
Range of discount rates adjusted for asset-specific risks to the Water Source of 23.9% to 26.1%. How is it possible without having committed to a "misleading" or "false statement" to state in Naturo's audited financial statements that the water source was valued at $8M (without any impairment) on Dec 30th 2020
And yet Bevcanna states it is worth $18M on Dec 12th 2020, over two weeks previous to the audited financials.
I guess adding an additional $10M was merely a typo.
There is also the fact that in 2015 Miller Springs (Naturo) was illegaly exceeding their daily limits of water removal, was requesting a much larger limit for daily extraction and was ultimately denied by the water board.
https://docs.openinfo.gov.bc.ca/Response_Package_AGR-2015-53124.pdf Everything related to the bottled water source have been knowing misleading and indeed false statements.
Sal, if you would like to explain how this was not "black and white" for the above scenario I would be more then happy to listen to an explanation.
Please and thank you in advance.