This is a big reason I own so many shares of EAPH:
HUMBOLDT, CA–(Marketwired – Feb 24, 2015) – Easton Pharmaceuticals Inc (OTC PINK: EAPH) discloses existing Medicated Markets Revenues from medical marijuana operations totaling more than $2,000,000 in fiscal 2014; provides clarification on other items.
Easton Pharmaceuticals has been provided with revenue numbers from Medicated Markets from its medical marijuana operations in California for 2014, revealing revenues that have surpassed $2,000,000. These sales numbers relate to the past year and are derived mainly from sales to dispensaries as shown in past invoices @medimarkets. The invoices exhibited are just a sample, and as such do not represent all sales made.
Responding to many similar type questions posed, Medicated Markets does not sell direct to patients and has no retail locations. Total harvested marijuana is sold on a wholesale level to licensed dispensaries in the greater Los Angeles region. These dispensaries are open to marijuana prescription holders only.
Operations are expected to be ramped up following anticipated investments to infrastructure, which are to be derived from proceeds from its transaction with Easton pharmaceuticals and other possible investment options and sources. With infrastructure upgrades, Medicated Markets can increase the number of plants grown from the current number of 1200, to 10,000 plants, which are tiered to harvest on a weekly basis following a 70-100 day variable cycle based on strain. 2014 yield from plants were approximately 1500 lbs. In 2014 medicated markets donated approximately 10% of its production to financially strained patients on a compassionate basis.
As previously disclosed, Medicated Markets projected $32,000,000 in potential sales for fiscal 2015 if many conditions were met including optimal selling and growing conditions including yields from additional purchased property. Please note this figure is based on January 2015 pricing. Prices have ranged from $1350 to $2000 per pound in 2014 and can significantly affect sales and profits and as such amended revenue range is provided below.
In January of 2015, prices had spiked to $2185 increased for medicinal marijuana In California, which was the estimate used to derive sales numbers. Using adjusted conservative numbers of only 1 pound per plant as a yield and $1350 which was the lowest price sold for in 2014 after upgrades to property, Medicated Markets would yield $13.5 million for 2015 or $3.37 million quarterly. If a conservative SG&A of 30% were used, it would result in a profit of $2.359 Million of which Easton would be allocated 40% ownership or $943,000 per quarter. This is nearly a 100% Return on equity paid for in restricted shares in 1 year of operation.
Medicated Markets were provided an initial upfront cash payment and issued “rule 144 restricted shares” (which are in escrow till maturity) and not free trading shares. These shares were valued at .02 giving the transaction a value of $4,000,000.
