Dear readers – blessed investor class – Over the past several months I have received more than my share of correspondence at Chateau Taint from eager market players looking at one Maple Leaf Green World (MGW.E), and wondering if the dogged old bones of this lingering loss-maker are worth gnawing on for marrow scratchin’s.
Let me be abundantly clear;
I’d sooner purchase a pallet of Dr Gogglesworth’s Mercury Stomach Ailment Cure, and the last unfortunate soul who did that has been battling earthworms for living space in the time since.
The first impediment in purchasing MGW stock is where one would go to do it. The Aequitas Neo Exchange is where MGW calls home.
If you haven’t heard of the Aequitas Nwo Exchange, that’s because nine public companies call it home, and none are getting love letters from the TSM or CSE asking them to come home.
Take Ether Capital Corp (ETHC.E) as an example of the class therein.
Ether raised a ton of cash when blockchain and crypto were things folks invested in. When those things sharted in value, Ether kept the money it had raised and leaned into their losses.
I particularly enjoy companies that have news release lists that read as unintentional comedy:
“We’re raising money!”
“We have money!”
“Update: We have less money..”
- Ethereum is something anyone can buy, without paying for someone else to ‘manage’ it for you.
- Ethereum’s value went off a cliff, and hasn’t come back.
So ETHC just keeps existing, doing around $30k in revenues this quarter and last, losing money when Ethereum goes down, not losing it when it goes up.
This is a non-company.
So is Maple Leaf Green World. These poor unfortunate misbegotten miscreants went from planting trees in China to being the next big thing in cannabis in Canada, and when that was clearly not working went to California, which also didn’t work, and then came back to Canada.
They had property in Nevada, but they’ve listed that for sale… they better sell it quick.
On December 17, 2018, the Company’ s wholly owned subsidiary, SSGW, signed a secured Promissory Note in the amount of $847,210 ($621,031 USD) before financing costs, with a Utah limited liability company. The note bears interest at 12% per annum and matures on December 17, 2019. The note is secured by a Deed of Trust on the Company’s Nevada property.
They have property in California, but…
In 2015, the Company’s wholly owned subsidiary, Golden State, entered into an agreement to purchase approximately 20 acres of land in southern California for an aggregate purchase price of USD$120,000. The Company paid USD$15,000 in cash and issued a promissory note in the amount of USD$105,000 secured by a Deed of Trust to arm’s length third parties. The note bears interest at the rate of 6% per annum and matures on March 1, 2020.
According to the most recent (unaudited) MD&A, the company has just $181k left in hand, which isless than their most recent quarterly loss. They’re claiming that’s okay because they have $10m in property assets on the books, which is weird because nobody appears to want to buy any of their land, and local folks put a lien against their BC property over unpaid invoices.
There are $2,530,000 builder’s liens against the land on finance lease. These amounts are included in accounts payable on the balance sheet.
In fact, anywhere you look, MGW’s numbers point to, well, bankruptcy at best.
As of September 30, 2019, The Company had an accumulated deficit of $29,897,475, a negative working capital of $4,722,972 and incurred losses of $208,071 for the period then ended.
Without an injection of capital, MGW doesn’t make it to Christmas.
They’re telling folks a million is coming in because of this:
In June of 2017, Maple Leaf provided a deposit of $1,102,500 for this work so that it could contract with construction partners and move the projects for ward. In January of 2018, a dispute arose between the contractor and Maple Leaf which is currently in litigation. Management feels that the deposit amounts are collectible and therefore no allowance has been provided against this balance.
Let’s be clear: That money is not coming back. It’s done.
When MGW bought a Nevada license, it was with the intent of cultivating cannabis. All they needed was to get the local regulators to approve the transfer. It was going to be a $4m deal.
On Dec. 31, 2018, the cultivation licence expired because the facility was not complete. The company appealed the decision to the Taxation Department and was informed in March, 2019, that the appeal had been denied.
I’ve had correspondence from men of means asking if there’s anything one could possibly pick up in this deal that would be of benefit to a well run business going forward, and the answer is no.
Let’s be very clear, there’s nothing in this company one could salvage, even if one were only looking for scrap metal. Maple Leaf Green World is alive in listing only, and anyone who hands them so much as the equivalent value of a a cracked spittoon and a sack of millet is setting fire to legal tender.
Aequitas Neo, if you want to demonstrate your worth to the rank and file as a place real business is done, kick this once company off your exchange.