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

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Includes: MYEC, MYHI, NDEV, NGMC, NHLE, NMUS, NRTI, NSPDF, NTRR, NVGT, NWWTF, NXTTF, OGRMF, OSLH, TBPMF
by: Anthony Cataldo

Summary

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

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

Expect an increase in marijuana 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 have read any earlier part of this series, 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, its business description (in the firm's own words, to the extent practicable), working capital position, as provided in its 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 seventh installment follow:

#91 - MyECheck, Inc. (OTCPK:MYEC) is a Wyoming corporation. Its 2-year chart follows:

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

MyECheck is the pioneer of the fully electronic check, the leader in electronic check technology, and the trusted advisor in the rapidly evolving landscape of consumerism in the payments industry.

The firm had a negative working capital position for December 2014. The firm is generating revenues and gross profits, but is also generating net losses. Positive cash are being generated largely through the issuance of convertible debentures:

An example of a convertible, from the footnotes to the financial statements, follows:

Below is the 1-month chart from Seeking Alpha:

There is a Seeking Alpha article and news release on this firm, quickly accessed using the above link.

#92 - Mountain High Acquisition Corporation (OTCQB:MYHI), formerly Wireless Attachments, Inc. (through March 2014), is a Colorado corporation. Its 2-year chart follows:

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

Mountain High Acquisitions Corp. is a holding company focused on the commercial hemp and CBD products industries.

Mountain High enjoyed a high closing price per share at $14 on March 12, 2014 (see above graph). It has cash and total assets of $45 for December 2014. The firm has no revenues. It is being funded through shareholder advances:

Below is the 1-month chart from Seeking Alpha:

#93 - GrowPros Cannabis Ventures, Inc. (MZRRF), formerly Mazorro Resources, Inc. (through January 2015), is a Canadian corporation. Its 2-year chart follows:

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

Mazorro Resources Inc. is a Canadian junior mining exploration company.

The firm's name change was not accompanied by a stock ticker or symbol change or a website change to reflect its change from the mining sector to the marijuana sector. However, an early January 2015 article summarizes the change.

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:

#94 - Novus Acquisition & Development Corporation (OTCPK:NDEV) is a Nevada corporation. Its 2-year chart follows:

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

We are healthcare industry professionals dedicated to providing health insurance and medical plans for patients who pursue alternative treatment with MMJ/Hemp.

The firm had a negative working capital position for December 2014, and some large stock-based compensation measures:

These types of preferred stock voting rights arrangements are so atypical that they are rarely addressed in accounting texts. Instead, the typical preference is with respect to dividends and liquidation only:

Below is the 1-month chart from Seeking Alpha:

There is one Seeking Alpha article on this firm, quickly accessed using the above link.

#95 - Next Generation Management Corporation (OTCPK:NGMC), formerly Next Generation Energy Corporation (through June 2014), is a Nevada corporation. Its 2-year chart follows:

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

Next Generation Energy Corp buys royalty revenues and mineral rights.

The firm enjoyed a relatively high closing stock price on March 13, 2014, at $0.0585 per share, pre-dating the name change (see above graph).

Next Generation had a negative working capital position for September 2014. There are some related-party transactions, notes payable and warrants detailed in the footnotes to the financial statements. Some of the larger measures in the income statement were atypical:

Below is the 1-month chart from Seeking Alpha:

#96 - Nhale, Inc. (OTCPK:NHLE), formerly Gankit Corporation (through June 2014), is a Nevada corporation. Its 2-year chart follows:

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

Nhale enjoyed a high closing stock price of $1.33 on February 14, 2014.

The firm had $831 in cash, current assets and total assets, but a recent news release suggests that $10 million is available for investments or acquisitions in the marijuana sector. Still, as of February 2015, the firm has negative working capital and more than $600 thousand in short-term notes payable. There are no revenues, and positive cash flows were generated from an additional $450 thousand in notes payable.

Below is the 1-month chart from Seeking Alpha:

There are 2 pre-2015 Seeking Alpha articles on this firm, quickly accessed using the above link.

#97 - Nemus Bioscience, Inc. (OTCQB:NMUS), formerly Load Guard Logistics, Inc. (through November 2014), is a Nevada corporation. Its 2-year chart follows:

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

A biopharmaceutical company focused on the discovery, development, and the commercialization of cannabis-based therapeutics.

The firm had a negative working capital balance as of December 2014. There are no revenues, and the firm is generating net losses, but $2.5 million in general and administrative fees have been financed, and cash flows are generated from common stock and warrant issues:

Below is the 1-month chart from Seeking Alpha:

There is one Seeking Alpha article on this firm, quickly accessed using the above link.

#98 - Inergetics, Inc. (OTC:NRTI) is a Delaware corporation. Its 2-year chart follows:

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

Inergetics is a leading developer of advanced proprietary nutritional products that improve overall health, physical recovery, athletic performance and quality of life for patients and consumers.

The firm enjoyed a high closing stock price of $0.31 on March 19, 2014 (see above graph).

Inergetics had a negative working capital position for December 2014. The company is generating revenues, but its expenses were relatively massive:

Below is the 1-month chart from Seeking Alpha:

#99 - Naturally Splendid Enterprises Ltd. (OTCQB:NSPDF) is a Canadian corporation. Its 2-year chart follows:

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

Naturally Splendid Enterprises (NSP or The Company) is a multifaceted biotechnology company developing, commercializing, producing, selling, and licensing an entirely new generation of hemp-derived, high quality, nutrient-dense Omega foods, nutritional food enhancers, and related products.

As of June 2014, this firm had a positive working capital position and quite a large amount of cash. It is generating revenues, gross profits, and net losses. There are some options and warrants (the latter not provided, below):

Below is an example of one of its products:

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:

#100 - Neutra Corporation (OTCQB:NTRR) is a Florida corporation. The 2-year chart follows:

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

Neutra Corp. is an early-stage research and development company that's bringing modern healthy living solutions to a multi-billion dollar market.

The firm had a negative working capital position for October 2014. It has no revenues.

Neutra provides an easy-to-follow schedule of conversion of convertible notes payable in the notes to its financial statements:

Below is the 1-month chart from Seeking Alpha:

There are quite a few Seeking Alpha news releases on this firm, quickly accessed using the above link.

#101 - Novagant Corporation (OTCPK:NVGT), formerly Petrogulf, Inc. (through January 2014), is a Nevada corporation. Its 2-year chart follows:

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

Novagant prides itself as an innovative, diverse company in the development and sale of equipment to enhance and benefit the growing medical cannabis industry.

For December 2014, the firm had a negative working capital position. With $8,837 in cash and current assets, most of its current liabilities are notes and shareholder loans payable:

Below is the 1-month chart from Seeking Alpha:

#102 - Newnote Financial Corp. (OTCPK:NWWTF) is a Canadian corporation. The 2-year chart follows:

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

Newnote is inventing new ways of conducting business using crypto-currencies as the monetary medium.

The firm had a positive working capital positions for October 2014, with enough cash to pay all liabilities, twice. They are generating some revenues, though consulting fees, management compensation, and share-based payments are relatively significant.

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:

#103 - Next Generation Metals Ordinary - New (OTCQB:NXTTF) is a Canadian corporation. Its 2-year chart follows:

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

Next Gen is a diversified public company which focuses on investing in the Medical Marijuana, Industrial Hemp and Alternative Medicine sectors.

The firm enjoyed a high closing stock price on March 20, 2014, at $0.6341 per share (see above graph). Shares were decreased by a 2-for-3 split with a pay date of March 3, 2014.

The firm had a positive working capital position as of June 2014, and a relatively large amount of cash, with a market capitalization of $430 thousand on March 31, 2015. It has no revenues, and has share purchase warrants and stock options.

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:

#104 - OrganiGram Holdings, Inc. (OTCQB:OGRMF) is a Canadian corporation. Its 2-year chart follows:

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

Prioritizing our clients' needs, we combine advanced technologies and proven methods to assure a secure and regulated source of organically grown medical marijuana for patients and doctors.

The firm had a positive working capital position as of November 2014, with more than enough cash to pay all current debt, and with a market capitalization of $22.3 million on March 31, 2015.

The firm had revenues, but is generating net losses. However:

Effective November 21, 2014, the Company established a new credit facility with Farm Credit Canada (FCC), in the amount of $2,500,000, all of which was advanced to the Company on that date.

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:

#105 - OSL Holdings, Inc. (OTC:OSLH) is a Nevada corporation. Its 2-year chart follows:

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

OSL Medical Services is a development platform centered on the development and financing of indoor gardens and cultivation facilities, production technologies, and merchandise and operational services for businesses in the herbal and supplement industry.

There was a 1-for-1,000 share reverse split (ex-date January 9, 2013). The firm enjoyed a high stock price of $0.2389 on March 13, 2014 (see above chart).

OSL had a negative working capital position as of November 2014, with a market capitalization of $2.9 million on March 31, 2015. The firm had revenues, but cost of goods sold exceeded revenues, leading to a gross loss. Liabilities are dominated by officer compensation, promissory notes, convertible notes, and related-party debt:

Below is the 1-month chart from Seeking Alpha:

Summary

All 15 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.

In the context of the 2-year chart, Naturally Splendid Enterprises is doing relatively well in recent months. In terms of the past one month, Mountain High, Nemus Bioscience, Naturally Splendid, OrganiGram Holdings, and OSL Holdings, in particular, are doing well. Investigating recent news releases that might explain price per share moves may be warranted. Typically, it is best to buy only when significant price per share increases are accompanied by relatively high trading volume, where high-of-the-day closing stock prices tend represent a favorable entry point. Consider whether these stock price upward drifts are likely to "stick," or if they represent nothing more than short-term upside overreactions to positive news releases, otherwise unsustainable, based on long-term fundamentals.

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.