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Freedom Leaf Inc (OTCMKTS: FRLF) Making Big Moves

Freedom Leaf Inc (OTCMKTS: FRLF) Making Big Moves
Written by
Jim Bloom
Published on
January 13, 2018
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Freedom Leaf Inc (OTCMKTS: FRLF) can’t stay out of the news for too long, when we made our last report on the company, it had just doubled from $0.038 to $0.0.76 and estimated that it would continue on that path. Within the last week, the price rose again to its highest value in nearly a year. In our piece, we provide information on the acquisition deal, the target company and the outlook going forward.

Take a look at the stock’s price action in the last year:

FRLF Daily Chart

Company Overview

Freedom Leaf, Inc. was formerly known as Arkadia International, Inc. and changed its name to Freedom Leaf, Inc. in November 2014. Freedom Leaf, Inc. is headquartered in Las Vegas, Nevada and is a leading go-to resource in the cannabis, medical marijuana, and industrial hemp industry. It is involved in mergers and acquisitions and business consulting in the marijuana industry, including incubation/acceleration and spin-offs of new marijuana/hemp related companies. For more information, you can go through our post here.

Within the New Year, the firm has already announced its acquisition of 100% of Green Market Europe S.L., a Spanish producer of hemp products. Since the announcement of the acquisition, Freedom Leaf Inc. Officers have been diligently working to finalize the international purchase, and as of today all relevant documentation has been submitted, signed, and completed.

Clifford J. Perry, Co-founder, and CEO of Freedom Leaf Inc. explained that management is happy to have completed this transaction as the deal is now final. He explained that the firm’s philosophy is only to acquire companies that will add significant gross revenue, net profit, and shareholder value to Freedom Leaf Inc.’s financials, and this is no exception. Green Market Europe S.L. is projected to add an estimated $2.4 million in its first full year of operation at approximately a 15% net profit.

Green Market Europe S.L. facilities include a 21,000 sq. ft. light deprivation greenhouse, a 43,000 sq. ft. indoor growing research facility, and over 200 acres of outdoor production space. The light deprivation allows the increase of the number of yearly crops from 3 to 4 crops a year and the 43,000 sq. ft. indoor grow facility is used for genetic research and cultivating additional hemp crops. Green Market Europe S.L. is strategically located in Elche, Alicante, a crucial Spanish business hub, with excellent year-round weather conditions for agricultural growing and a long tradition of growing hemp.

This deal marks the second completed acquisition for Freedom Leaf Inc. in Spain and Europe. The first purchase was in May 2017 of LaMarihuana.com, the Spanish-speaking community’s leading cannabis portal, and Marihuana-Medicinal.com, an influential Spanish medical cannabis information website. LaMarihuana.com was founded in 2001 and currently has more than 1.7 million page visits monthly, making it one the most visited online portals worldwide for the Spanish-speaking community. LaMarihuana.com also has more than 1.3 million social media followers.

Freedom Leaf, Inc. is currently collaborating with Spanish scientists isolating other rare cannabinoids. Some of the ongoing research includes strains with Tetrahydrocannabivarin (THCV), which suppresses appetite, and Cannabichromene (CBC), which has been shown to aid with depression.

The CEO has hailed Freedom Leaf Iberia B. V. licensee’s Managing Director, Federico Pando, for his work in completing this and other Spanish projects for Freedom Leaf Inc.

The firm also announced its continuation of retiring outstanding convertible debt recently. In December 2017, a convertible note of $38,000 was retired through a payment made to the lender. Currently, Freedom Leaf, Inc. has three other convertible notes on our books that its plans to retire before its 6-month anniversaries just as was done with the aforementioned convertible note.

Company Financials

A quick look at the firm’s statement of comprehensive income reveals that revenues grew by nearly 600% year on year, rising from $0.11 million to $0.82 million in 2017. Further reduction in operating and additional expenses drove down net loss by 70%. This is a reliable indicator that the firm is making the right financial moves

The company is very highly leveraged as a significant portion of its liabilities are long-term debts which are likely to accrue interests. The firm has high liquidity of 3.9, but this figure may prove to be deceptive when it is considered that 99% of its current assets are tied up in receivables. However, if the firm can prove itself adept at converting receivables to cash, then it is likely in a good liquidity position to carry out business operations.

Conclusion

Another acquisition within the space of a year shows just how committed the firm remains to its expansion strategy. On this path, interest in the company will only continue to rise.

We will be updating our subscribers as soon as we know more. For the latest updates on FRLF, sign up below!

Disclosure: We have no position in FRLF and have not been compensated for this article.Image courtesy of Doug via Flickr

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