Cannabis-Rx Inc. (NASDAQOTH:PRRE)

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jed71 (99.58)
Submitted April 28, 2014

(Credit : thanks to FooltheRest for bringing this one up in one of my other pitches!) I suspect that FooltheRest and I are not the only two who were aware of and watching this company for an opportunity to activate in Caps (my guess is TSIF, SmartAce… More

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Member Avatar jed71 (99.58) Submitted: 4/28/2014 12:37:13 PM : Underperform Start Price: $0.48 PRRE Score: +64.29

(Credit : thanks to FooltheRest for bringing this one up in one of my other pitches!)

I suspect that FooltheRest and I are not the only two who were aware of and watching this company for an opportunity to activate in Caps (my guess is TSIF, SmartAce and others have been waiting for this one, as well). It just popped over the $0.50 mark so I went ahead and requested activation. I found this one quite some time ago when looking through the myriad of other pot stocks on my down thumb list. I know it’s beginning to look like I have an obsession with pot, but I promise you that’s not the case. :) These just happen to be very obvious down thumbs given their shady corporate histories and their proclivity for landing in the hands of the infamous pumpers. Just a warning to the longs, I have received a TON of “promotional” emails about this firm and that almost never ends well for retail investors (see TMFStockSpam’s points and accuracy if you don’t believe me).

“Cannabis-Rx Inc, formerly Longview Real Estate, Inc., is engaged in the business of acquiring a portfolio of properties. The Company has acquired eight properties. On October 22, 2013, the Company formed a wholly owned subsidiary Praetorian Capital, LLC. In April 2014, the Company acquired 209,000 square foot commercial space, consisting of three buildings situated on 9.26 acres of land in Sarasota, Florida.”

So I have found three name changes since their inception in 2011. It also started as a shell company, which you can readily see in a recent 8-K. I suspect the “Cannabis” in their corporate name is in there for show only. Their affiliation with the cannabis industry seems very loose at best – I don’t see where there is even a single deal that has been completed with another cannabis entity. Of course, they have no revenues yet so I guess I really couldn’t see any deals.

Cannabis RX Inc.
Longview Real Estate Inc.
L3 Corporation

“We were incorporated on July 5, 2011 in the State of Delaware. We are a development stage company that has commenced organizational activities but has not generated revenues from our business operations. Our original business plan was to develop an “L-3” stretching apparatus to be used by gym enthusiasts for their exercise activities. On July 3, 2013, we changed our name to Longview Real Estate, Inc. in connection with the pursuit of a new business plan. We are now engaged in the business of acquiring a portfolio of distressed properties in certain strategic areas at deep discounts, rehabilitating these properties and selling or leasing them for the quickest and highest return possible. Our business office is located at 7702 E Doubletree Ranch Rd. Ste 300 Scottsdale, AZ 85258.”

So from gym equipment to “distressed” real estate. The business plan was just adjusted again with the most recent name change to include that infamous key word “Cannabis”. So how has this changed their business model?

“We intend to retain our focus on acquiring and selling/leasing real estate assets, but we have decided branch out and cater to the real estate needs of the regulated cannabis industry. In this niche market, we plan to purchase real estate assets and lease growing space and related facilities to licensed marijuana growers and dispensary owners for their operations. We believe there is a significant amount of business in this space and we have changed our name to better reflect our business direction.”

They do have assets so this one is a bit different than many of my picks in that they have some cash and a few real estate assets. They took out a promissory note for $4MM @ 5% interest that is due in 24 months. How will they pay back the $4MM? Most likely stock dilution, if they cannot get the note renewed. As you can imagine, the financials also don’t support market valuation. They have $8MM in assets, an $80MM market cap (recent 10-Q) and absolutely no revenues. I do question the value assigned to their real estate assets on their balance sheet given they are buying “distressed assets”.

It’s also never a good sign when the 10-K filing has been delayed. It will be interesting to see their financials out of the 10-K to see how things have changed for them. I would avoid this but I suspect there are a few out there who are going to argue with me about “how high” this company will go.

“Cannabis-RX (CANA.PK) filed to delay its 10-K; expects to file within the extension period.”

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SmartAce

SmartAce (99.96) Score: +78.37

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Top
Pick
Member Name Member
Rating
Start
Date
Call Time
Frame
Start
Price
Stock
Gain
Index
Gain
Score Commentary
JoeySolitro1 99.99 5/5/2014 Underperform 5Y $0.50 -18.41% +49.93% +68.34 0 Comment
TMFBabo 100.00 5/1/2014 Underperform 5Y $0.50 -18.00% +49.46% +67.46 0 Comment
jed71 99.58 5/1/2014 Underperform 5Y $0.48 -14.58% +49.71% +64.29 3 Comments

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