Canl cannabis reverse merger CannLabs, Inc.

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CannLabs, Inc. -- CANL -- Reverse merger of leading cannabis lab into a public company. Reverse merger expert John Lux discusses the deal structure.

CannLabs, Inc. -- CANL -- Reverse merger of leading cannabis lab into a public company. Reverse merger expert John Lux discusses the deal structure.

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  • 1. www.reverse-merger-shell CANL Cannabis Reverse Merger
  • 2. Disclaimer  This is not legal or investment advice of any kind  Seek competent advice from qualified attorneys and investment bankers  Your situation may vary  The more you know about finance and business, the more you can profit
  • 3. On Friday the 13th CannLabs, Inc. announced its reverse merger with SpeedSport Branding
  • 4. CannLabs trades on the Over The Counter Bulletin Board (OTCQB) under symbol SDSPD until July 10, 2014, when the symbol will be symbol CANL on the OTCQB
  • 5. Carbon Bond Holdings, Inc., a leading cannabis testing lab, became a wholly owned subsidiary of CannLabs
  • 6. CannLabs sold 500,000 shares of Series A Convertible Preferred Stock for $500,000 and issued five year warrants to purchase 20,000,000 shares of common stock at $0.15
  • 7. The investor agreed to lend $750,000 in additional funding in three tranches through November 15, 2014
  • 8. CannLabs agreed to file an SEC registration statements covering the resale of the common stock underlying the Series A Convertible Preferred Stock and the warrants
  • 9. CannLabs acquired Carbon Bond for 59,295,000 shares
  • 10. CannLabs also swapped out SpeedSport Branding for 111,545,535 shares, leaving it with 65,520,000 shares outstanding
  • 11. Of these, 87.8% are held by the new shareholders, 9.5% by the old pre-merger shareholders
  • 12. Another 30,048,077 shares can be issued to the Series A Preferred Stock on conversion at a conversion price of $0.01664, and another 20,000,000 shares on exercise of the warrants at $0.15
  • 13. This compares nicely with the closing price of $1.38. The preferred stock and the warrants limit conversions to 4.99% of the outstanding stock, which can be increased to 9.99%
  • 14. Friday June 13, the stock traded closed at $1.38, up 369%
  • 15. 110,585 shares were traded OTCShortReport.com shows that 82,266 shares of this volume was sold short, or 74.39 %
  • 16. Presumably much of this short was from market makers forced to meet the demand after the news
  • 17. SpeedSport Branding was a development company, a small motorsports organization participating in road racing
  • 18. It showed almost $100,000 in shareholders equity, and a small loss on $22,000 in revenue for the last quarter It was split off in exchange for the cancellation of stock
  • 19. Cannabis is a hot item in the OTC market, so much so that the SEC found it necessary to issue a warning in May
  • 20. Despite this warning, adding the stock from the warrants and the convertible preferred to the outstanding stock and valuing it at $1.38, gives a market cap of $147 million
  • 21. If the investor can convert the preferred into common and sell at $1.38, it turns its $500,000 into $41,446,346
  • 22. Throw in a full conversion of the warrants at $1.38 and you get a $24,600,000 kicker for total proceeds of $66,066,346 on the $500,000 investment
  • 23. The investor breaks even on its $500,000 investment if it converts and sells at less than two cents per share
  • 24. Get my books on Amazon.com How to Pick Hot Reverse Merger Penny Stocks
  • 25. Get the Data You Need Subscribe to my blogs Www. Reverse- merger-shell.com Www. Reverse- merger.Info
  • 26. Get Your Questions Answered  Questions – email me at John.Lux@ Securities- Law.info  (240) 200-4529
  • 27. Get my books on Amazon.com How to Find a Home Run Stock by John E. Lux