Marijuana - Companies & Stocks

[mc67]

$FRLF (copy) Below are my notes on FRLF from public sources. For the fiscal year 7/1/18 through 6/30/19 I calculate revenue potential of $6-$17m but that is low because hemp farm is being ramped up and fixed. Max potential revenue from current business lines is $30-$40m by my math. As such $.50 is cheap if you understand where they are heading. And all my info and numbers were before factoring in Merida investment.

1) Share Structure
a. Market Cap = $22.2M (8/10/18)
b. Authorized Shares = 500M
c. Outstanding Shares = 195M (8/13/18)
d. Float = 18.8M (4/12/18)
2) Key Shareholders (71% held by insiders as of 12/31/17)
a. Clifford Perry (CEO, CFO, Director) = 11% of common stock
b. Richard Cowan - 16% of c-stock
c. Richard Groberg (CFO) = 1.7m shares
d. Ray Medeiros (Director) = 5.3% of c-stock
e. Allen St. Pierre = 2.6% of c-stock
f. Paul Pelosi (Board Chair) = 2.867m shares
3) Business Lines — vertically integrated media and CBD product company
a. LaMarihuana.com and Marihuana-Medicinal.com — April 2017, Spanish speaking web portals. LaMarihuana has 1.7m visitors/month
b. Leafceuticals Inc — began ops Jan 2018, hemp extraction business
c. Freedom Leaf International Inc. — no active operations
d. Irie CBD — hemp CBD product line, expect $2m rev ($1.3m in 2017) with a 13% profit margin ($260k/yr, $65k/qtr)
e. Hempology —CBD health/wellness brand
f. Valencia, Spain — hemp greenhouse
i. 2,000 kilo indoor harvest =$750,000-$2,300,000 (probably 1m euros)
ii. 30,000 kilo annual indoor harvest capacity = $14.55m - $34.5m annually (probably 15m euros)
iii. 20,000 kilo annual outdoor harvest capacity@ $50 min ($1m), but plan on using for own extraction facility…save a little by using and shipping now
iv. Profit Margin ~ 35% - 45%
v. Hemp flower in Euro sells for 625-1,025 euros per kilo
g. Plants to Paper — rolling paper company (own 25%)…delivered 120k cones to HBI…should get 2-3x to deliver asap
h. Freedom Leaf Magazine — flagship publication, deal funnel…never monetized the magazine (its more a loss leader to brand and create deal funnel and create credibility)
i. Ideas in place to monetize it…$30k/issue revenue
i. Tierra Science Global, LLC - 8/1/18, health supplements, $500k rev in 1st half of 2018 (manufacturing done by Irie)…own 100%
i. Est annual rev of $2.88m and 24% profit margin, with Irie doing manufacturing, good portion of cost comes through as revenue to Irie
ii. CBD related products made by Irie…Hemp Tincture…
iii. Tierrascience.com
j. Healthy Discovery Associates Corp - nutraceutical LDL Cholesterol inhibitor intellectual property acquisition (bought patent)…redo liquid formula into a powder formula
k. Green Market Europe - purchase that was cancelled on 6/4/18
4) Preferred Shares = 10m authorized, 1m is Series A convertible into 100 common per share
5) Other Info
a. Hope to be at net profit possibly by Q2 and definitely by Q3 of FY2019
b. 10k by Sept 15th…
c. Good corporate governance and transparency!
6) Revenues & Exp -
a. Reduction in revenue vs. 2017 is from moving away from licensing to product sales…had 3 license holders (Netherlands, Iberia, Florida)…
i. Licenses will start up again next month (Netherlands/Iberia), sold to Southern California
b. $50k 3/31 quarter revenue from $30k CBD oil, $20k sale of product
c. Growth in G&A expense attributable in part to stock based compensation…also costs to ramp up website
d. $420k of cash quarterly operating loss (3/31 10Q) to be covered (don’t count bad debt and depreciation)
i. $173k covered by Tierra profit margin
ii. $65k covered by Irie (at $2m rev)

7) http://nebula.wsimg.com/4967baac9de5d72e7bcf62e9b7997caf?AccessKeyId=F7205B59A244F1B3EF10&disposition=0&alloworigin=1

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