MPX Bioceutical Corp (OTCMKTS:MPXEF) is a story that is now very clear in terms of the importance of funding. MPXEF had been struggling, but it’s playing in the cannabis patch, where returns on invested capital are riding about as high as any market segment on planet earth right now. Hence, it can’t be too surprising to see what we saw here last week: the company pointed to an oversubscribed placement of shares, and shares of the stock went soaring higher, powering as much as 200% higher.
The move came in response to headlines from the company announcing that it has successfully closed its previously announced private placement offering of units of the Company. According to the release, “Echelon Wealth Partners Inc., together with Canaccord Genuity Corp. as co-lead agents and special selling agent, Chrystal Capital Partner LLP, exercised in part the over-allotment option for additional Units, for a total aggregate subscription of 56,326,958 Units at a price of $0.47 per Unit for total gross proceeds of $26,473,670.26. The Company expects to close a second, and final, tranche of the Offering early in January 2018.”
MPX Bioceutical Corp (OTCMKTS:MPXEF) bills itself as a multi-state diversified cannabis company with operations focused in the U.S. in the adult use and medical cannabis markets.
The company’s foundation is built on its profitable operations in Arizona, with two Health 4 Life Dispensaries and well established Melting Point Extracts (MPX) Brand; it also has operations in Massachusetts.
MPX Bioceutical Corporation has signed a definitive purchase agreement to acquire operations in Nevada and non-binding letters of intent to purchase dispensary and production licenses in Maryland. MPX Bioceutical Corporation plans to replicate its success in Arizona to become a dominant multi-state operator.
According to company materials, MPXEF provides “substantial management, staffing, procurement, advisory, financial, real estate rental, logistics and administrative services to two medicinal cannabis enterprises in Arizona operating under the Health for Life (dispensaries) and the award-winning Melting Point Extracts (high-margin concentrates wholesale) brands. The successful Health for Life brand operates in the rapidly growing Phoenix Metropolitan Statistical Area. The recently acquired GreenMart of Nevada NLV, LLC is an award winning licensed cultivation, production and wholesale business, licensed for both the medical and “adult use” sectors in Las Vegas, Nevada, and is already selling wholesale into the Nevada medical cannabis market. GreenMart has also optioned suitable locations and intends to enter the higher-margin retail arena by applying for at least two dispensary licenses in the Las Vegas market which will operate under the “Health for Life” brand.
The Company owns assets in Massachusetts supporting cultivation, production and up to three dispensaries there, and with the closing of this most recent transaction, MPX has added the management of a full service dispensary in Maryland. MPX continues to expand its U.S. footprint, and is in the process of acquiring management companies that provide operational and other services to two further dispensaries and one production license in Maryland. The Company also leases a property in Owen Sound, Ontario, for which an application to Health Canada has been made for a cannabis production and sales license. In addition, the Company will continue its efforts to develop its legacy nutraceuticals business.”
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“We are pleased with the investor response to the Offering which was successful in spite of the unfortunate decision by one large shareholder who chose “for personal reasons” to liquidate his position while the fundraiser was in progress,” stated Scott Boyes, Chairman, President, and CEO of MPX. “Our company will deploy these funds to continue to expand our footprint in the U.S. and Canadian cannabis sector, work diligently to grow both revenue and earnings and ultimately reward those old and new investors who have demonstrated confidence in our company, its management and its business plans.”
Now commanding a market cap of $168.7M, MPXEF has a significant war chest ($4.8M) of cash on the books, which must be weighed relative to about $144K in total current liabilities. MPXEF is pulling in trailing 12-month revenues of $13.9M. However, the company is seeing recent declines on the top-line on a sequential quarterly basis, with revenues falling at -13.7% as of its latest reporting period. We will update the story again soon as developments transpire. Sign-up for continuing coverage on shares of $MPXEF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $MPXEF, either long or short, and we have not been compensated for this article.