Crop Infrastructure (CROP.C) messed with the deer in Nevada and shareholders got the antlers

CROP.C, crop infrastructure, nevada, antelope, failure, harvest, THC
09/27/2019

Crop Infrastructure (CROP.C) has been “humbled” by major damage to its Nevada property caused by rampaging antelopes and weeds, the unprofitable kind.

Once drone reconnaissance and sample plant counts were completed, Crop determined eight of 10 of the company’s hemp pivots in Nevada were “severely affected by invasive weeds.

“We have been humbled by the realities of commercial scale farming with hard lessons learned, but we are determined to forge ahead and we are readying our teams to complete the harvesting of the remaining hemp in Nevada, and THC in California, Washington and Oklahoma as the October harvest season is just around the corner.”

–Michael Yorke, Crop Infrastructure CEO

A Crop partner overseeing the farms used crop covers to protect the plants from weeds, but the method was only successful for two of the pivots.

The company has released their lease on the lost pivots, 850 acres, and has said they will turn their efforts to the remaining 500 acres.

And as if that wasn’t bad enough, a thuggish herd of antelope also caused significant damage, according to the company.

And as if that wasn’t bad enough, Crop’s sale of its Nevada THC asset has now lapsed and the agreement has been terminated.

Seriously? If you’re going to grow outdoor, at least put some scarecrows and RootGuard down.

The upside is $51K has gone into the company treasury due to $0.13 warrant exercises since it announced the warrant exercise incentive program on August 21.

Crop’s program allowed holders who came into possession of Crop warrants between May 1, 2018 and Feb. 5, 2019 to exercise them at a price of $0.13. The initial exercise price of these warrants range between $0.50 and $0.75.

“Proceeds received by the company from the exercise of eligible warrants under the program will be used for advancing the construction of its Nevada extraction lab, hiring additional sales teams to increase revenues and speed to market, as well as for general working capital purposes.”

Crop knows these warrants would expire before they ever reached their strike price, even on the low end. So, they repriced them at a level which could actually be reached.

Everyone who got in above $0.13 was basically just slapped in the face.

But the company is looking to increase its ownership in its American assets in order to make the company “more attractive to potential partners.”

CROP intends to do so by exercising the options it holds. These options have a strike price of USD$500, and it’s not clear what that means.

Asset: State From To
Wheeler Park Properties, LLC WA 30% 70%
Humboldt Holdings, LLC CA 49% 70%
Elite Ventures Group, LLC NV 49% 84%

What’s clear is that the company has $86K in cash since their last financials in addition to the money raised from the warrants.

The company burned through $3.3M last quarter and $10M of the $22.6M owed from its partners was to come from the Nevada assets, a state where the deer and the antelope clearly do in fact graze.

CROP also has $3.4M in debentures coming due in 2021. That’s a long ways off, but the company’s stock will need to hit $0.50 or they need to give the money back.

So what’s the plan?

Here is CROP’s chart. It’s been trending down and has been that way for a long time. The company not only told its investors to go screw themselves but the majority of their Nevada harvest was just ruined by Bambi and The Little Shop of Horrors.

Source: stockwatch.com

We recently gave GTEC Holdings (GTEC.V) and its CEO the chance to go on the record and explain to shareholders how he was going to fix the mess his company was in.

‘What’s the plan?’ That’s what we asked GTEC and, to Norton Singhavon’s credit, he did and the stock shot up 13% on a day with no news. Go see for yourself.

We look forward to giving Michael Yorke and CROP the same opportunity.

 

–Ethan Reyes

Full disclosure: GTEC Holdings is an equity.guru marketing client, and CROP was formerly.

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