Today, we need to talk about one of the most exciting surprises in the market in 2018. We are talking about the share price jump of Cherubim Interests Inc. (OTCMKTS:CHIT), which runs alternative construction projects and also has business interests in the marijuana and cryptocurrency sectors.
The recent share price action seems to be drawing the attention of many market participants in the new year. On January 3, 2018, the share price spiked up from $0.0002 to touch the level of $0.0009 in the same session. But, that is not all. In our opinion, the most significant is the trading volume on that day, which was equal to more than 0.5 billion shares, which our readers need to note. We believe that it is a clear indication of the growing market interest in this name. Have a look at the share price move and form your own opinion:
What’s going on? On January 3, 2018, the company signed a letter of intent to acquire $250,000,000 in assets from NVC Fund LLC. Additionally, the company noted a financing commitment of $100,000,000 to launch Initial Coin Offering for The Self Sustaining Intentional Communities Coin. Both news seemed to excite the market participants. In this article, we will provide a detailed explanation.
Cherubim Interests Inc. was founded on September 27, 2006, in Nevada and is headquartered in Bedford, Texas. Cherubim Interests is specialized in commercial, single and multifamily dwelling opportunities for investment purchase. Cherubim Interests is focused on covering the entire spectrum of development – including due diligence, acquisition, planning, construction, renovation, and property management. This is the business objective which is shown in the company materials. The range of activities is quite broad, so we will try to focus on what seems to be interesting the market.
First of all, we need to talk about BudCube Cultivation Systems USA. This subsidiary has developed a Proprietary Controlled Environment Cultivation Technology that serves as an outdoor turnkey solution for cultivators of legal medical and recreational cannabis. We could read in the company materials that Oregon is being used as “expansion model,” and afterward the company plans to go to Nevada, California, Washington, D.C., and Canada.
If you are not aware of the current state of the marijuana sector, read this carefully. We are talking about a market with an estimated size of more than 35 billion, which is growing at a high pace. Every time a new State legalizes some form of cannabis, the legal market enlarges, and the opportunities grow for companies like CHIT. That’s not all. The price of marijuana stocks also increases. Check, for example, what happened recently after the legalization of recreational marijuana in California on December 31, 2017. Read some of our articles if you want to get to know more about it. It will help you understand what can be going on with this name.
That’s not all. BudCube Cultivations Systems seems to have signed new agreements with other companies operating in the cannabis sector. One of these groups is United Cannabis Corp (OTCMKTS:CNAB), which agreed to provide to BudCube Cultivations Systems fee-based consulting services including cultivation and inventory control and management systems among other services. The fact that the company works with relevant players in the industry, like CNAB, which has been operating since 2007, is very positive. In our opinion, it shows that it has already developed know-how and recognition in the sector.
Another subsidiary that should be mentioned is Victura Roofing LLC, which is located in Dallas and specializes in storm-related property damage claims for both residential and commercial customers.
On October 17, 2017, CHIT showed to the market that it was seriously growing the business. It released the acquisition of Flagship location to deploy its BudCube Cultivation Systems technology and hybrid business concept. It is located in Lowell, Oregon, and will serve as a leasing center with more than twenty acres zoned F2 or Impacted Forest Land. The most interesting is that the property is located close to Fall Creek Farm and Nursery, the world’s leading blueberry nursery stock and breeding company. Patrick Johnson, CEO of CHIT, explained why this fact is significant:
“We are excited to acquire this property because it is already zoned for agribusiness, removing the need for any additional zoning variances. This gives us the ability to offer an extremely private and secure environment for our tenants with enough acreage to deploy both single and multi-tenant business concepts moving forward.” Source
What will be coming after the acquisition?
It was said that research needs to be done to determine the land purchase and improvements besides construction and deployment of the location for leasing. The company will need to release to the market the amount of space that will be leased. This figure will be significant, as it will tell us the amount of potential production. We will be alert, as it could surprise the market and make the share price run.
There is more.
On December 19, 2017, Patrick Johnson, CEO of CHIT, released an update for the shareholders. The most interesting is that the company has been able to capitalize on tornado and hail damage with Victura Roofing while also establishing additional revenue streams within the cannabis sector. Additionally, we got to know that the company is in negotiations to retain another audit firm after the previous one resigned.
That’s not all.
We believe that it was fascinating that the company has been able to retire both affiliate and non-affiliate debt from the company’s balance sheet. It was noted in the update. Additionally, maybe $245,000 of toxic debt could be eliminated, and the company is also seeking to write off over $500,000 of unclaimed debt. If this news is confirmed, the financial risk will be reduced, which should be appreciated by the market. Thus, be alert in this regard.
Finally, the most remarkable news came out. On January 3, 2018, the company released a Letter of Intent to acquire $250,000,000 in assets from NVC Fund LLC, a Delaware, LLC, a wholly owned subsidiary of NVCFUND Holding Trust, respectively. We agree with CHIT CEO, Patrick Johnson, who said that the acquisition is an excellent opportunity for the company, as it could bring substantial assets. It should enhance the balance sheet, and the market would appreciate it. Be alert on the news regarding this LOI, as a more definitive agreement could make the share price spike.
Additionally, the company noted the financing commitment of $100,000,000 to launch Initial Coin Offering for The Self Sustaining Intentional Communities Coin (Symbol SJT). The new coin is designed for “cooperative living, working and healthier lives, and offers extensible diversity in the use of the coin over current coins, like Bitcoins, for both financial and societal gain.” We believe that if the new ICO is finally executed, the company will be able to grow at a much higher pace pushed by the Cryptocurrency industry.
Currently trading with a market cap of $0.2 million, CHIT is an exciting story among small caps. With a total amount of outstanding shares equal to 597,474,005 and a float of only 203,528,184 shares, this is also a low float runner that could exhibit a lot of share price volatility.
To sum up, follow this stock if you are ready for an adrenaline ride.
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Disclosure: We have no position in CHIT and have not been compensated for this article.
Image courtesy of Maura Teague via Flickr