It was the highest profile due diligence failure of the weed space so far: Finore Mining (FIN.C), which had all but confirmed a deal with a California weed-based beverage distributor over several months before a zero-hour pullout that saw the stock plummet, has now settled on new digs.
Investors hated the several month halt, they hated the abandoning of the old deal, and they hated the news vacuum that followed. No company has drawn more questions to my social media accounts from annoyed holders.
I’d announced a few weeks ago that my network was hearing a deal was in the works but, as per usual with FIN, the due diligence took some time.
Today’s new deal brings Micron Waste Technologies into the fold. Here’s them:
Micron Waste Technologies Inc. has developed an innovative patented-pending technology that transforms organic waste into clean water that meets municipal effluent discharge standards. The Micron technology is targeted for supermarkets, restaurants and marijuana producers seeking to reduce costs and improve efficiency in the processing of organic waste. Micron’s technology is currently being used by a major B.C. food retailer where Micron has installed a pilot demonstration unit.
And because they know you guys were hoping a weed deal was going into the vehicle, here’s your thrown bone:
In addition, Micron is in advanced discussions with industry leading marijuana cultivators in Canada to install Micron Waste Digesters at their licensed cultivation facilities.
Okay, so now we know what it is, let’s find out how it’s going to work, deal-wise:
2-for-1 rollback opens the show.
The Agreement is structured as a three-cornered amalgamation whereby Micron will amalgamate with a newly incorporated British Columbia subsidiary of Finore and all the issued and outstanding shares of Micron (the “Micron Shares”) are exchanged for common shares of the Company (the “Finore Shares”) with Micron becoming a subsidiary of Finore (the “Proposed Transaction”). Following the completion of the Proposed Transaction all of the securityholders of Micron will become securityholders of Finore.
Prior to closing of the Proposed Transaction, the Company will change its name to Micron Waste Technologies Inc., or such other name as agreed by the parties, and will complete a consolidation of the Finore Shares on the basis of one post-consolidated Finore Shares for every two pre-consolidation Finore Shares. Pursuant to the Proposed Transaction, the shareholders of Micron will receive one post-consolidated Finore Share for each Micron Share. No concurrent financing is anticipated to occur in connection with the Proposed Transaction. The Company and Micron have approximately C$5,400,000 in cash at the date of this news release.
So will FIN holders now rejoice at the coming of a new day? US trading has been positive. The stock remains halted in Canada. Let’s dig a little deeper.
According to Bullrun Capital’s website, they expect Micron to graduate to the TSX Venture Exchange by August. That’s a positive.
It does appear to have a decent use case for the weed industry, according to the Micron website:
Although marijuana is becoming legalised in more and more countries, there are still significant overhead to manage and dispose of waste generated from marijuana cultivation. Cannabis waste, either wet or dry, must be individually bagged, weighed, tagged, and supervised to proper destruction. Our Micron Waste Technology can process the waste directly onsite in a closed loop system and generate clean water for the grow operation.
So how do I feel about this new deal for FIN, now that I’ve looked through it a little?
Somewhere between this:
Micron looks legit. The guy behind the tech is the sort of guy you’d like to be behind such tech. And they do have a company trialing the system in a pilot program currently, which shows its at least that real. But how far is it from genuine revenues? How far down the line are they with weed use trials and agreements? Who are they talking to? What are they going to do with all that cash the company has which, incidentally, is about 2.5x market cap based on financial data at Google Finance?
Lots of questions to be answered, but that last one may be all you need to know.
UPDATE: I have no option but to hold – Finore insiders tell me their halt will continue for a few months while they close the deal. Oy.
— Chris Parry
FULL DISCLOSURE: Finore Mining is an Equity.Guru marketing client and the author holds stock in the company that, like y’all, is well underwater. Who’s got a bucket?Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.