Today, we are bringing a new profile that has recently drew the attention of the market, FutureLand Corp (OTCMKTS:FUTL), a cannabis and hemp land leasing company.For what reasons?In July 2017, the company announced the acquisition of an established solar technology group, Amps Electric, Inc. and just recently the transaction closed. Image from Future Land Corp's websiteAdditionally, the most recent quarterly report was released in August. On the top of it, the company noted a new dividend to be given from the crop yields. We will provide all the details in this piece, but before that, have a look at the most recent share price action: 1 year chart for FUTLBusinessFutureLand Corp was formed in Colorado on November 29, 2007. In order to run new businesses, the company changed its name many times. The following were the different names used, we note them, as we believe that old readers may remember some of them:
- Forever Valuable Collectibles, Inc.
- On July 22, 2014, after the acquisition of AEGEA, LLC, the company also acquired the name.
- On March 10, 2015, the business combination with FutureWorld, Corp. and FutureLand Properties, LLC, was called FutureLand Corp.
What's the business model as of today?FUTL is an agricultural land lease company catering for the industrial hemp, legal medical marijuana, and recreational cannabis market. The strategy is best explained in this text given in the last 10-Q:
"The business model is simple; offer growers the opportunity to grow. We have the land and then we find a growers requiring assist in funding and obtaining their license and grow facility. Next, we arrange for additional operational items needed, including but not limited to, complete build-outs provided from our associated company, HempTech Corp, in order to capture additional revenue." Source
Additionally, we found that the company owns 240 acres of prime property in southern Colorado and two signed lease agreements for grow facilities on its land.What do we think about this sector? We have discussed extensively about almost all the marijuana companies operating in the US and Canada, as we believe that the industry is delivering outstanding returns to the investors. After the legalization of some forms of medical marijuana in some States of the US and Canada, the demand for cannabis and derived products has increased and the sector has became very profitable. We encourage readers to read our work on this industry to understand what is going on.Recent DevelopmentsThe most interesting announcements made by the company in summer are the following. First of all, on August 14, 2017, it was noted that the Board of Directors have decided to give a yearly or quarterly dividend to the company's shareholders from the crop yields of its grow facilities around the country, beginning with its Oregon property. It was noted that the divided will be given using cash, which we appreciated, as other type of dividends given in shares are a form of dilution.Additionally, in the month of August, the latest quarterly report was also given to the market. The following were the most significant accounts:
- Cash: $19,397
- Related Party Receivable: $304,198
- Related Party Receivable (non current): $3,540,000
- Total Assets: $1,181,053
- Accrued expenses: $328,568
- Total Liabilities: $1,176,934
The net asset value per share seems positive and the company has some cash, but the company seems to have issues in receiving money from third parties. The company may ask a financial institution to finance its operations with accounts receivable financing.
"Accounts receivable financing is a type of asset-financing arrangement in which a company uses its receivables — outstanding invoices or money owed by customers — as collateral in a financing agreement. In this agreement, an accounts receivables financing company, also called a factoring company, gives the original company an amount equal to a reduced value of the unpaid invoices or receivables." Source: Investopedia
Furthermore, on September 7, 2017, the company noted that it had finally acquired Amps Electric, Inc. The acquired business deals with solar energy, has annual revenues exceeding $5,000,000 and believes that it can achieve as much as $10,000,000 by the year's end. We believe that the transaction is very good for FUTL, which diversifies its operations and acquires know-how in another innovative industry.Finally, on September 18, 2017, it was announced that the company had purchased 20% of Apotheca Biosciences, Inc. for a price that was not disclosed. The new transaction is again another smart corporate move, as the company has entered into the healthcare and consumer care industry. This is what seems to be the most significant information about the target:
"Apotheca Earth Biosciences is a pioneering biotech company with an emphasis in research and development in addition to the creation of high-grade nutraceuticals and cosmetics." Source
ConclusionCurrently trading with a market cap of $3 million, FUTL is an exciting story among small caps. The market seems to be responding very well to the latest corporate moves, which shows how the company is willing to enter into new markets. We appreciate the transactions as they build shareholder value. FUTL is certainly a name that should be on every penny stock investor's radar. We expect the recent moves to start paying big dividends for FUTL shareholders.We will be updating our subscribers as soon as we know more. For the latest updates on FUTL, sign up below!Image courtesy of Allan Birch via FlickrDisclosure: We have no position in FUTL and have not been compensated for this article.
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