Reviews Of 15 Marijuana Stocks Before The Marijuana Investor Summit - Part V

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Includes: HMKTF, HMPQ, ICBU, IGPK, IGRW, IJJP, IMLFF, INCC, INQD, INSY, ITNS, LATF, LGBI, LVVV, LXRP
by: Anthony Cataldo

Summary

This is the fifth of a 10 part series to be completed and submitted for Seeking Alpha editorial consideration.

Timing is important – Investor Summit will be held in Colorado from April 20 through April 22, 2015.

Expect an increase in marijuana (MJ) sector news releases leading up to, during, and after this event.

The Marijuana Business Conference and Expo will follow the Marijuana Investor Summit, less than 1 month later, on May 19-21, 2015.

I began collecting data for this series on March 27, 2015, and hope you find the series helpful in your MJ sector investment decision-making process.

Part I of this series is available here. The below, introductory section, is repeated for all parts. It can be skipped, if you read Part I or Part II or Part III or Part IV, but is included for completeness and for those who have not read and digested earlier installments.

Important Upcoming Event Dates

The Marijuana Investor Summit is scheduled for April 20, 2015, in Colorado.

It will be followed by the Marijuana Business Conference & Expo on May 19-21, 2015, in Chicago.

All 10 Parts of This Series Will Continue to Follow the Following Format:

  1. First, the firm's name, ticker symbol, and state of incorporation are provided. Recall that more than 50% of the marijuana sector firms, accessing capital in the U.S. capital markets, are incorporated in and are subject to Nevada corporate law. This is a disproportionately large percentage for the marijuana sector, since only a bit above 8% of the overall "market for corporate law" has been captured by the state of Nevada.
  2. Second, I include the firm's logo and 2-year chart, developed from the OTCMarkets website, on March 28, 2015. I have captured this long-term trend, and identify and note the relatively high price-per-share event date, if it occurred during the February-March-April 2014 period and surrounded the March 21, 2014 event date, when the index of marijuana stocks peaked (See Note the Seasonal Patterns, below).
  3. Third, I provide a link to the firm's website, their business description (in the firm's own words, to the extent practicable), working capital position, as provided in their latest, publicly available financials, with some significant fundamentals that I recommend you focus on, before investing in the firm or its securities.
  4. Finally, the firm's 1-month chart, developed and linked to the Seeking Alpha website, where relevant, fundamentals-based articles might be identified and read to "tool up" and decide whether or not you are interested in buying and holding securities from firms in this emerging sector of the U.S. economy, is provided.

Note the Seasonal Patterns

The chart, below, captures a 2-year trend for the MJIC Marijuana Global Composite Index. Note the relative seasonal lows occurring at year-end and during December 2013 and December 2014. This pattern is consistent with (1) individual investor tax loss selling for portfolio "losers" followed by (2) recovery and the January effect. The MJIC index peak is consistent with the March 21, 2014 event date, and note that the index value is experiencing a slight upward drift in recent trading days and leading up to the Marijuana Investor Summit, as follows:

…on March 21, 2014, Federal Court Judge Michael Manson granted an application to medical marihuana patients seeking a temporary injunction to retain the right to produce marihuana for personal use until the court renders a judgement on the constitutionality of the MMPR.

Extraordinary stock price increases attract regulatory body attention. The meteoric rise in the MJIC index was followed by a Securities and Exchange Commission trading halt:

An SEC halt of a leading company and a negative Seeking Alpha (emphasis added) article about another led to widespread selling.

Reviews of the 15 marijuana stocks in this fifth installment follow:

#61 - Highmark Marketing, Incorporated (OTCPK:HMKTF) is a Canadian corporation. The 2-year chart follows:

The firm's website can be accessed here. The below is from the website:

The firm had a significant, positive working capital position as of June 2014, with a market capitalization of $575 thousand as of March 31, 2015.

The firm is not generating any revenues, but is generating positive cash flows from sales of stock. During calendar year 2014, Highmark Marketing has issued shares at prices ranging from $0.005 through $0.10 per share (Canadian). Exercise prices on options ranged from $0.10 through $0.50 per share (Canadian).

There are some recent press releases that should be read and digested:

NOTE: Canadian firms and financial data are accessed through SEDAR, the Canadian counterpart to the U.S. Securities and Exchange Commission.

Below is the 1-month chart from Seeking Alpha:

#62 - HempAmericana, Incorporated (OTCPK:HMPQ) is a Delaware corporation. The 2-year chart follows:

The firm's website can be accessed here. The below is from the website:

Our Products Are Organic. Hemp Soap, Laundry Detergent, Firewood, Scented Candles, Beverages, Pet Food, Suntan Lotions, Topical Hemp Creams that help relieve pain from Arthritis and Fibromyalgia…

This firm has no debt as of November 2014.

An April 7, 2015 news release may warrant further investigation and consideration:

Below is the 1-month chart from Seeking Alpha:

#63 - IMD Companies, Incorporated (OTCPK:ICBU) is a Florida corporation. The 2-year chart follows:

The firm's website can be accessed here. The below is from the website:

The firm is

…recently re-positioned to be a holding company for acquisitions in the Hydroponics and Hemp industry.

IMD enjoyed a relatively high closing stock price on March 24, 2014, at $0.171 per share (see above chart).

The firm had a significant, negative working capital position as of September 2014, with a market capitalization of $1 million as of March 31, 2015.

IMD has a significant amount in convertible notes, paying 8%, where the below discounted stock price and conversion terms are typical of those agreed to by the firm:

Below is the 1-month chart from Seeking Alpha:

#64 - Integrated Cannabis Solutions, Incorporated (OTCPK:IGPK), formerly, Integrated Parking Solutions, Incorporated (through April 2014), is a Nevada corporation. The 2-year chart follows:

The firm's website can be accessed here. The below is from the website:

Integrated Cannabis Solutions, Inc. is focused on offering its suite of services geared towards reducing the risk, cost and complexity for responsible cannabis businesses during this monumental process of transitioning from prohibition to regulation.

This firm has no assets (and no cash) or revenues through December 2014; 550 million shares were issued between January 2013 and September 2014.

Integrated Cannabis migrated from Texas to Nevada corporate law in 2003. This firm had a market capitalization of $11.9 million on March 30, 2014

Below is the 1-month chart from Seeking Alpha:

There is a single Seeking Alpha article on this firm, and posted in May 2014. It is quickly accessed through the above link.

#65 - Interactive Health Network (OTCPK:IGRW), formerly HPC POS System Corporation (through April 2014), is a Nevada corporation. The 2-year chart follows:

The firm's website can be accessed here. The below is from the website:

The firm is

…a publicly traded holdings company that manufactures, markets and sells high quality lifestyle products and nutraceuticals.

Shares were decreased by a 1 for 900 split with a February 19, 2013 ex-date.

The firm had a negative working capital position as of December 2014, easily determined, despite the lack of a classified balance sheet, and had a $7.1 million market capitalization as of March 31, 2015.

The majority of the firm's liabilities are owed to related parties:

The firm is generating revenues and net losses. Shares have been issued for as little as $0.001 per share and as much as $1 per share, and the cost of debt is 8%:

Below is the 1-month chart from Seeking Alpha:

Matt Finston has written some Seeking Alpha articles on this firm, quickly accessed by using the above link.

#66 - IJJ Corporation (OTCPK:IJJP) is a Nevada corporation. The 2-year chart follows:

The firm's website can be accessed here. The below is from the website:

The firm is

…an innovative and driven company offering public and private companies, professional entities and service contractors a Partnership network designed to increase revenues and reduce operating costs leading to better profits.

State of incorporation in New York was changed to Delaware during February 2004.

The firm had a positive working capital position as of January 2015, with a $3.1 million market capitalization as of March 31, 2015.

The firm is generating revenues, favorable gross profit percentages, and is profitable.

Below is the 1-month chart from Seeking Alpha:

#67 - InMed Pharmaceuticals, Incorporated (OTCQB:IMLFF), formerly, Cannabis Technologies, Incorporated (through October 2014) and Meridex Software Corporation (through May 2014), is a Canadian corporation. The 2-year chart follows:

The firm's website can be accessed here. The below is from the website:

The firm had a negative working capital position as of December 2014, with a market capitalization of $12.7 million as of March 31, 2015.

The firm has no revenues. Debt includes non-interest bearing loans, payable on demand, from related parties:

Administrative expenses are relatively high:

NOTE: Canadian firms and financial data are accessed through SEDAR, the Canadian counterpart to the U.S. Securities and Exchange Commission.

Below is the 1-month chart from Seeking Alpha:

#68 - International Consolidated Companies, Incorporated (OTCPK:INCC) is a Florida corporation. The 2-year chart follows:

The firm's website can be accessed here. The below is from the website:

Medical Cannabis Holdings, Inc. [INCC] is focused on acquiring and growing businesses that offer services and technologies to assist growers and patients with the production and delivery systems for medical marijuana. The company will provide venture capital funding for qualified projects in the expanding legal cannabis industry. Through targeted acquisitions, brand recognition, and real-estate and technology joint ventures, the company intends to capture significant market share in Colorado, Washington State, and California.

This firm has a significant, negative working capital position as of December 2014, with a market capitalization of $3 million on March 31, 2015.

There are no revenues and some very large travel and entertainment expenses and interest expenses:

The notes are generating very high interest rates:

Below is the 1-month chart from Seeking Alpha:

#69 - Indoor Harvest Corporation (OTCQB:INQD) is a Texas corporation. The 2-year chart follows:

The firm's website can be accessed here. The below is from the website:

Indoor Harvest, Corp., is a Design Build Contractor and Original Equipment Manufacturer of commercial vertical farming system fixtures and components for use in urban Controlled Environment Agriculture ("CEA"), and Building Integrated Agriculture ("BIA"). We also offer custom design build services and consulting to the vertical farming industry from shallow raft through nutrient film technology.

The firm had a positive working capital position as of December 2014, with a market capitalization of $8.2 million on March 31, 2015.

Below is the 1-month chart from Seeking Alpha:

If this firm interests you, it might be helpful to read my earlier Seeking Alpha article.

#70 - INSYS Therapeutics, Incorporated (NASDAQ:INSY) is a Delaware corporation. The 2-year chart follows:

The firm's website can be accessed here. The below is from the website:

We are a commercial-stage specialty pharmaceutical company that develops and commercializes innovative supportive care products.

Shares were increased by a 1.5 for 1 split (March 31, 2014 ex-date).

The firm enjoyed a relatively high closing price per share on March 4, 2014, at $55.58 per share, but is, now, trading above this amount (see above chart).

INSYS had a positive working capital position as of December 2014, with a market capitalization of $2 billion on March 31, 2015. The firm is generating revenues, very favorable gross margin percentages, and net profits.

Below is the 1-month chart from Seeking Alpha:

Some Seeking Alpha articles on this firm are quickly accessed through the above link.

#71 - Itonis, Incorporated (OTCPK:ITNS) is a Nevada corporation. The 2-year chart follows:

The firm's website can be accessed here. The below is from the website:

Located in Laguna Hills, California, and founded in 2005, Itonis Inc. has focused on transitioning itself in the past year from acquiring high growth, market niche entrepreneurial companies, to a market leader focused on the distribution of innovative products to the medical and pharmaceutical industry.

Itonis enjoyed a relatively high closing stock price per share on March 4, 2014, at $0.0259 (see above chart).

The firm had negative working capital as of November 2014, with a market capitalization of $6.7 million on March 31, 2014. The firm has no revenues. Liabilities have been incurred for consulting services and/or are, largely, the result of related party loans that are, periodically, extinguished through shares issues:

Below is the 1-month chart from Seeking Alpha:

The above link will take you to the Seeking Alpha website with a recent news release for this firm.

#72 - Latteno Food Corporation (OTCPK:LATF) is a Delaware corporation. The 2-year chart follows:

The firm's website can be accessed here. The below is from the OTC Markets website:

'The company is focused on operating within the food and beverage industries.'

The firm enjoyed relatively high closing stock prices per share on February 14, 2014, at $0.0143 and March 25, 2014, at $0.0133 (see above chart).

Latteno had a positive working capital position as of December 2014, easily determinable, despite the lack of a classified balance sheet. It is the only case where I have seen an income statement presented before a balance sheet in a firm's financials. It is difficult to determine if the firm had a profit or a loss for the period ended December 2014, where "521,260" is labeled "Loss from operations before income taxes":

There is convertible debt, but there are no explanatory notes to the financial statements.

Below is the 1-month chart from Seeking Alpha:

There are several pre-2015 Seeking Alpha news releases for this firm, easily accessed from the above link.

#73 - Cannabiz Mobile, Incorporated (OTCPK:LGBI), formerly, Lion Gold Brazil, Incorporated (through June 2014) is a Nevada corporation. The 2-year chart follows:

The firm's website can be accessed here. The below is from the OTC Markets website:

Cannabiz Mobile, Inc. is a mobile media and marketing Company…

There was a 1 for 8 reverse split (ex-date June 24, 2014). This tends to distort the graphics (see above chart), so a second chart, below, is provided to reflect the firm's stock price for the 6 months ending March 31, 2015.

The firm did not provide a classified balance sheet for December 2014, but it appears to have $8 in cash and a negative working capital position. There are no revenues. I am not quite sure why notes payable are classified as a source of "operating" cash flows and not a source of "financing" cash flows:

There were no notes to the financial statements.

Below is the 1-month chart from Seeking Alpha:

#74 - Livewire Ergogenics, Incorporated (OTCPK:LVVV) is a Nevada corporation. The 2-year chart follows:

The firm's website can be accessed here. The below is from the OTC Markets website:

Livewire Ergogenics develops, markets, sells, and distributes consumable energy supplements.

Livewire enjoyed a relatively high closing stock price on March 3, 2014, at $0.1422 per share (see above chart).

The firm had a negative working capital position as of September 2014, with a $370 thousand market capitalization on March 31, 2015. The firm has revenues and a favorable gross margin percentage, but is generating net losses.

Positive cash flows are being generated from notes payable, convertible notes payable, and the sale of common stock:

Below is the 1-month chart from Seeking Alpha:

#75 - Lexaria Corporation (OTCQB:LXRP) is a Nevada corporation. The 2-year chart follows:

The firm's website can be accessed here. The below is from the OTC Markets website:

Lexaria's focus is on the cannabidiol-infused food products industry.

Lexaria had a high closing stock price occurred on March 19, 2014 at $0.69 per share (see above chart).

The firm had a positive working capital position as of November 2014 and February 2015, and quite a bit of cash, with a market capitalization of $2.8 million on March 31, 2015.

Lexaria has some revenues. Cash flows have been generated from sale of a gas and oil property:

There has been warrant, stock option, promissory note and convertibles activity that are detailed in the notes to the financial statements and should be reviewed before investing.

Below is the 1-month chart from Seeking Alpha:

There are some pre-2015 Seeking Alpha articles available on this firm, and easily accessed using the above link.

Summary

Most of the stock prices for firms in this installment have been in decline, when viewed in the context of the 2-year chart. In those cases, many purchasing stock in these firms, during the 2-year high, have probably sold the stock and booked losses or remain very disappointed in their investment decision. There are some exceptions.

IJJ Corporation, InMed Pharmaceuticals, Indoor Harvest Corporation, and INSYS Therapeutics, have shown a bit of upward drift or stability, recently, when viewing the 2-year chart. Integrated Cannabis Solutions, Interactive Health Network, InMed Pharmaceuticals, and Lexaria Corporation have relatively favorable 1-month charts that may simply be sector event-driven and favorable upward drift enjoyed by firms included in the MJIC Marijuana Global Composite Index, where good news might be anticipated and as conference dates approach.

The Investor Summit and the Marijuana Business Conference and Expo scheduled for April and May, respectively, are not likely to represent event dates, in and of themselves, that will result in an "economically" significant, positive marijuana sector reaction, but individual firms are likely to make complementary news announcements during this period. Use this article and the series as a source of historical reference to quickly digest these announcements, in context, before making a decision to buy and hold these stocks. You might prefer to set up a portfolio and/or news alerts on the Seeking Alpha website for stocks you find interesting for a long-term buy-and-hold.

As always, read Seeking Alpha comments and consider them as a supplement to this article, where views might be consistent or inconsistent with positions I have taken or described.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

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