Responding to eagleeye14: Post# 58162
The shares numbers you present are correct and will be about 2.5 Billion shares an a fully diluted basis after all the deals are made. Nothing really new, it is all in the filings.
"Now let’s review Growlife’s joint venture with RXNB:
1) RXNB deal: Growlife owns 45% of OGI, while OGI owns 40% of RXNB. Therefore Growlife owns 18% of RXNB. In return for the 18% stake, Growlife will issue RXN* 265m shares at a cost of $0.17 per share. OGI guarantees that the Sellers will receive in the aggregate not less than $18m within nine months from January 24, 2014 or upon the Sellers’ liquidation of the RXN* Payment Shares, whichever is sooner.
2) Why is Growlife issuing $45m of stock ($103m of stock at today’s share price) for an 18% stake in a company that supposedly generates $27m of sales? That would value RXN* at $250m, or about 10x my estimate of the company’s actual worth. Yet another example of Growlife destroying shareholder value in order to grow revenues, and also another example of why Growlife needs to keep their share price propped up as long as possible before its ultimate collapse.
3) Try searching for RXN* on the internet. It’s nowhere to be found - hard to believe for a company that supposedly generates $27m in sales. "
What he says is correct but he doesn't mention what RXN* brings to the table. He wants to create a sell off, that's all. RXN* brings a research lab, 50000 patients per month, a network with 2700 clinicians , and actual sales.
"Now, let’s review their joint venture with CEN Biotech:
1) CEN Biotech deal: Growlife owns 45% of OGI, while OGI Inc owns 25% of CEN (owned by FITX). Therefore Growlife owns 11.25% of CEN. In return for the 11% stake, Growlife will issue CEN 235m shares at a cost of $0.17 per share.
2) Once again, That would value CEN at $356m, or about 100x my estimate of the company’s actual worth. CEN’s 85,000 square foot grow facility may or may not get approval and be constructed. Either way, its value is a small fraction of the valuation Growlife is placing on the company via their share issuance. "
1) "why is Growlife issuing $40m of stock ($92m of stock at today’s share price) for an 11% stake in a company that generates $2m of sales?"
Completely wrong and this shows his motives very clear. Growlife isn't buying a stake in a company that generates 2M in sales, it is buying a stake in a company that is going to produce up to 1.3M pounds of MJ worth BILLIONS in sales.
2) "CEN’s 85,000 square foot grow facility may or may not get approval and be constructed."
They have received a ready to build letter from Health Canada.
"Now, let’s value the company using a sum-of-parts approach, not even including the upcoming share and warrant dilution. It assumes a 20% return on their $40m financing package and still yields a net value of $0.03 per share: "
This is very wrong: the company is expecting a minimum of five times return on investment or 500% , not 20%
"Finally, let’s also look at the fund raising the company has done in the past, before the industry hype. There were 10 equity raises at an average cost of $0.03/sh: "
The past is the past. Growlife has chosen a new business model.
My personal simplified take on this whole deal?
CEN Bio will grow it , RXN* will test it and distribute it.
PHOT's books and structure are way too messy to be able to go for up listing in the near future and this counts for FIT* as well.
But OGI inc will have a healthy structure and will be able to IPO.
You have to be able to see the bigger picture and try to think years ahead.
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