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Alan Brochstein, CFA
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Alan Brochstein, CFA has worked in the securities industry since 1986, primarily with the responsibility for managing investments in institutional environments until he founded AB Analytical Services in 2007 in order to provide independent research and consulting to registered investment... More
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  • Former Medical Marijuana Inc. Interim CEO Misleads Investors And Clearly Explains Massive Dilution 7 comments
    May 10, 2013 11:43 PM | about stocks: MJNA

    Medical Marijuana Inc. (OTCPK:MJNA) held several conference calls last year. The last two were with Ted Caligiuri. He had joined in September, where the press release described his background:

    SAN DIEGO, Sept. 17, 2012 /PRNewswire/ -- Medical Marijuana Inc. (OTC: MJNA), a leading hemp industry innovator, announces today that its Interim President and CEO, Michael Llamas, is taking a leave of absence effective immediately. According to the company, Mr. Llamas will be stepping down from his position in order to focus his attention on personal business matters that are entirely unrelated to MJNA.

    The Company has appointed Ted Caligiuri as the new Interim President and CEO. Mr. Caligiuri has served on the Board of MJNA since the Company was acquired by Cannabank and has been instrumental to the overall development of the company, especially in the area of Hemp-based CBD production.

    His tenure didn't last until year-end, though the company never disclosed his departure with a press release. In the annual report (filed in mid-February), he was listed as a director without his title. In the updated annual report filed in April, he was mentioned similarly. The last time he was mentioned, they didn't even refer to him as "interim", calling him just "President/CEO" on 12/20 as he discussed Can-Chew gum. He is no longer listed on the company website as a director or officer.

    The company last held an interview with its I.R. firm on 12/4 that was posted to the internet by SmallCapVoice on 12/6. You can listen here.

    At the 1:46 spot, Caligiuri, who should know what he is saying, fully supported my assertion that the company confuses investors in how it describes the relationship to Dixie Elixirs, calling it a "subsidiary", which is NOT the case at all. I detailed some other discrepancies regarding how the company confuses shareholders in a recent article. Ironically, I received criticism for stating the obvious and misstating the relationship simultaneously. Even today, I see plenty of evidence that the public still doesn't fully understand this relationship.

    Another big question that is not answered in their filings is the very large jump in the share-count last year. At 4:15, Caligiuri attempts to address the issue, describing a situation where two institutional lenders required an increase in the share-count in order to provide a line of credit once the fictional uplisting takes place (fictional is my view). He explains that the shares were given to HDDC to use to pledge as collateral. Huh?

    On 9/10, an interview with Llamas and Keber had another bold-faced lie. At the 26 minutes roughly, Llamas explains how the authorized share-count will remain at 750mm, but we know it that wasn't true, as the Q4 filing showed that it went to 950mm at year-end.

    Stocks: MJNA
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Comments (7)
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  • Ashraf Eassa
    , contributor
    Comments (8821) | Send Message
     
    Scam.
    11 May 2013, 01:57 AM Reply Like
  • Alan Brochstein, CFA
    , contributor
    Comments (7509) | Send Message
     
    Author’s reply » I think scam is harsh. I view it as super-promotional and blatantly unfriendly to outside shareholders and incompetent in some regards. I have uncovered dishonesty before (embezzlement, a ponzi scheme) and I have watched enough episodes of American Greed to know how real scumbags operate. I am not seeing these guys in that kind of light. It's still not a pretty light though...
    11 May 2013, 02:01 AM Reply Like
  • The_Ripper
    , contributor
    Comments (47) | Send Message
     
    Alan, why the obsession with MJNA? Don't you think it might be time to focus on another company as I think you have made your point already?

     

    How about looking into the relationship of CBIS and XCHC.

     

    XCHC claims to have acquired the Phytiva brand from CBIS, but I can't seem to find any mention of the transaction in the companies fillings. I see the Dupetit deal but not the Phytiva. Also, XCHC seems to have lost the Native Canadian deal as evident by this article.

     

    http://bit.ly/11u6M5n
    11 May 2013, 09:17 PM Reply Like
  • Alan Brochstein, CFA
    , contributor
    Comments (7509) | Send Message
     
    Author’s reply » Thanks, Dr. K. I will look into it
    11 May 2013, 09:56 PM Reply Like
  • Ted Waller
    , contributor
    Comments (546) | Send Message
     
    Caliguiri appears to be a talented and capable businessman. The question arises as to why such a person disappeared so quickly and quietly from MJNA. Was he somehow incompatible with the rest of MJNA management? I shouldn't speculate but can't help it.
    12 May 2013, 03:46 PM Reply Like
  • Alan Brochstein, CFA
    , contributor
    Comments (7509) | Send Message
     
    Author’s reply » Yeah, shareholders deserve to know when the acting CEO leaves and no one else is named as successor - what a lack of disclosure
    12 May 2013, 03:51 PM Reply Like
  • Ted Waller
    , contributor
    Comments (546) | Send Message
     
    I could speculate that Caliguiri found out what a mess he had signed on to and got out before getting caught up in it. But I won't.
    13 May 2013, 11:14 AM Reply Like
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