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5/16/17

Cannabis Wheaton (CBW.v): A total scam

I hear this impressive pumpjob scam is being rammed down the throats of complete idiots in both Canada and Germany. Well folks, I do not claim credit for the words and research that follows but 1) I know where it came from and 2) I've checked it out and it's all true. The Deslauriers brothers are Canadian scum of the highest order and their running their BS on you, right now.

Be in no doubt, CBW.v is a classic Vancouver scam. Be short, avoid entirely, but whatever you do make sure you're not long this worthless sack of excrement on May 26th. Read on, kind reader

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Cannabis Wheaton.  CBW.V.  A new “streaming” company with a market cap at $1.50/ share of $225M!  A brand new company that vetted PanCann into the publically traded merchant bank Knightswood Financial (KWF-V) on May 3, 2017 and concurrently, bought 13 streaming deals from PanCann for total proceeds of $1,000,000. 

What do they have? 

·         Cash, maybe $1.8M on balance sheet and no debt that I can find.
·         Agreements with 14 cannabis companies to stream production or obtain royalties… however,, only 2 of which actually have their sales license currently.  The other 12 are in “various stages of approval from Health Canada”.  See below.
·         Over the past five months have issued a monstrous amount of shares all at a cost of $0.05 – 0.055 with an equal amount of warrants at $0.07.  And because those cheap shares weren’t cheap enough, they did a 3 for 1 stock split for every share in the company, tripping their share count, and decreasing the cost of those shares by 2/3.. to approx $0.015 per share.
·         These non-brokered PP’s were four month hold, and as such, will come free trading four months from closing.  20M coming out May 26, 2017 at 0.05 with 20M warrants at 0.07.  And in August 2017, 25.5M shares at $0.055 come free and again 25.5M warrants at cost $0.07.  The stock is at $1.50 today…

Capital structure and raises.

1.       Dec 31,2016 Knightswood Financial (KWF) had 3,011,667 basis shares outstanding.  (Turned to 9,035,001 in the 3 for 1split noted below)
2.       Jan 2017, approved by shareholders, the share capital of company could be increased from 100M shares to unlimited number shares.  Also, approved to allow for issuance of stock options for up to 20% of number shares issued and outstanding.
3.       Jan 26, 2017 –Closed - $1.1 M Non-brokered PP  20,309,182 special warrants at C$0.055.  1 share and 1 warrant at 7 cents.
4.       March, 2017 company closed two Non-brokered PP’s and distributed total 25,510,656 units priced C$0.055 for C$1.4M proceeds.  One share + one warrant at C$0.07.
5.       March 15, 2017 company granted 4,238,695 stock options to consultants of company at price $0.075 per share.  Total options now 12,716,085 with exercise price of $0.025 per share. 
6.       April 7,2017 company completed a forward split of common shares 3 for 1.   Following completion and approval by TSXV, number of outstanding shares will be 150,864,996 plus 133,089,033 warrants outstanding at avg. price $0.0233 per share.

Total basic shares
3,011,667
20,309,182
25,510,656
Total 48,831,505  x 3 = 146,494,515 basic shares outstanding, plus 133,089,033 warrants at avg. price $0.0233!!!   

*These private placement shares will come free trading in four months from closing date.   On May 26, 2017 (4 months from first PP) should see 20,309,182 shares come free trading at cost of $0.05.   In August, we should see 25,510,656 shares free trade at cost to holder of $0.055.  Plus, both parties have mirrored number of warrants to shares they received, both at a cost of $0.07.  20,309,182 at .07 May 26 and 25,510,656 in August 2017.

Balance sheet.
Knightswood Financial (The shell that vetted PanCan into their structure) had $300,000.00 on balance sheet as of Dec 31, 2016.   With the three private placements mentioned above, the company has an additional $2.5M on the books.  Less the $1M they paid for the 14 “streaming” agreements.  So maybe left with $1.8M.

Streaming deals.  This is where the company is garnering all of their value. And the market seems to be paying a massive premium for deals that have not yet closed, companies without cultivation licenses in hand, and Cannabis Wheaton does not yet have the capital to fund any of these agreements or perceived deals.

Conclusion:
1)      the company is ridiculously overvalued at current levels and will correct in the next couple weeks, or certainly once the initial wave of $0.05 (or 0.015 in real terms) 20M shares and 20M warrants come free trading on May 26.
2)      Someone is propping the company up so that they can get the financing they desperately need. After all, the company is predicated on obtaining financing so they can in turn finance the companies mentioned below (and they don’t have any real money on the balance sheet currently).  I did notice they filed an AIF on Sedar… which means they would be short form eligible.