Choom Holdings Inc (OTCMKTS:CHOOF) has managed to capture the attention of investors and analysts with its recent results. Less than a month ago, it was at a low of $0.6 but has since that time rallied to a high of $1.02 dollars, giving some of its investors returns well over 50% in just a little time. In this piece, we give details of the company’s business and its announcements in recent weeks.
First, take a look at the stock’s price movement:
The company was established in September 2006 by Craig Schneider its head office is located in Vancouver, Canada. The firm is involved in the acquisition, exploration, and evaluation of mineral properties. Some its mineral properties exploration and evaluation projects entail the Diego and Lithium properties.
Besides mineral exploration, the firm through its subsidiary, Medi-Can Health Solutions Ltd, also carries out the cultivation and sale of cannabis for medical purposes and related products using the well-recognized Choom name. Until November 2017, when the company underwent a name change to Choom Holdings Inc., it went by Standard Graphite Corporation.
It was announced in June 2018, that Aurora Cannabis intends to complete a $7 million venture in Choom Holdings Inc. in a deal which will see Aurora will obtain 9.85 million common shares of Choom which are currently priced at $0.71 per share and leading to an 8% ownership stake in the company.
At present, Choom runs two late-stage applicants under the well-known ACMPR regulations and has put in place agreements to purchase two more late-stage applicant craft growers within Saskatchewan and British Columbia. This includes a facility located in Sooke, British Columbia that is expected to obtain its cultivation license from Health Canada within the 3Q18.
The affiliation between Choom and Aurora developed via Aurora Pro, the platform through which the Choom provides a number of its services to market participants, such as, market development, regulatory consultancy, cultivation and genetics services. The Aurora Pro platform was formed by Aurora Inc. in a bid to interface with the craft growers facing challenges with possibly unreasonable entry barriers into the adult use market in Canada.
The company’s strategy is to create a carefully treated portfolio of high-quality cannabis strains with ideal traits for craft growing with the target being the upper echelons of the adult customer use market. To accomplish this, the company continues to create refined brand, high-quality merchandise, and a prominent in-store customer experience.
At present, Choom has acquired rights to seventeen retail leases in highly secure locations all around Alberta. Submissions to receive a cannabis retail license to allow for operating these outlets have been made. In addition, it has seven leases secured in British Columbia (BC), and the licenses will be used for once the licensing program in BC have begun. There are other plans to ensure the company plays a major role within the Saskatchewan retail market and has a robust strategy in place to improve its market appeal.
In the same month, Choom announced that today it would be closing its acquisition of Specialty Medijuana Products Inc. (“SMP“) in accordance with an amended and restated amalgamation understanding among Arbutus Brands Inc, International Tungsten Inc. and Choom itself. The definitive agreement to effect the transaction was announced during in a news release in March 2018.
In 2017, there were no revenues reported for the firm, a trend which has continued since its inception in 2014. It is expected that in years to come, the firm will move out of this growth phase and generate revenues from the sale of its products.
In the same period, operating expenses fell by 18.5%, a possible indication that the firm has experienced some progress in attaining operational efficiency. As there was no operating income, operating loss for the year was recorded at $0.24 million. It is worth noting that it is quite common for developing firms to generate losses due to its costs while generating little or no revenue in the growth years.
Net loss for the year was $0.53 million, a drop from the prior year loss of $0.49 million revealing that the income statement consisted of mostly operating expenses in the year.
The statement of financial position reveals that the firm is somewhat highly geared. On its books, its total debt is worth just $0.6 million, resulting in a debt-to-equity ratio of 1.46. It also has a fairly stable liquidity ratio of 1.67
There is every indication that CHOOF is on its way to becoming a main player in the Canadian market. This is made even more likely by the extensive strategy of its management to take over different parts of the market.
We will be updating our subscribers as soon as we know more. For the latest updates on CHOOF, sign up below!
Disclosure: We have no position in CHOOF and have not been compensated for this article.