On May 1, 2017, Vinergy Resources (VNNYF) gained as much as 18% as we re-initiated coverage on the company pending their proposed acquisition of MJ Biopharma. May 1st also marked the highest volume day ever for the stock as it appears investors are beginning to recognize the significance of the acquisition and what it could mean for the future of this company.
The last time we covered Vinergy was back on December 30, 2016, when it only traded on the Canadian market under symbol VIN.CN. At that time we saw the stock gain 191% in just over 1 month climbing from $0.395 to $1.15 CAD. Since then, Vinergy has begun trading in the U.S. under VNNYF and we believe it could be time for you to start paying attention to the company once again. And the price movement that has kicked things off in May could add to our conviction.
Earlier this year in late March, trading of VIN.CN was halted on the Canadian exchange due to an upcoming fundamental change in the company. This is NOT a regulatory suspension. It is a halt initiated by the exchange because of an upcoming fundamental change in the company. We assume that this is because of the pending acquisition of MJ Biopharma.
But, while trading in Canada is put on pause, trading on the U.S. exchange through ticker symbol VNNYF continues to roar on. We believe this could be a rare opportunity to take advantage of a pending fundamental change in the company while shares of the Canadian listing are halted. Earlier this year, many of our U.S. subscribers without global trading access sat and watched Vinergy stock skyrocket on the Canadian exchange after we published an article on December 30, 2016, naming Vinergy as one of the top marijuana stocks to watch in 2017. For those who missed the first rally (and those who were able to profit handsomely from it), pay close attention to what you’re about to read next…
The Significance of the MJ Biopharma Acquisition – What Investors Should Know
MJ Biopharma is a private cannabis technology company based out of British Columbia that is currently focused on manufacturing breath strips, time release capsules, extract oils, food products such as infused teas, coffee, juices and other drinks, as well as the development of pharmaceutical grade delivery systems. They also focus on licensing and partnering on the development of technologies and products for the medical and recreational cannabis market in Canada and abroad.
Compensation Structure
But what makes this acquisition unique and one of the main points that caught our attention about the deal between the two companies, is the milestone based compensation. Vinergy is issuing 5 million shares of its common stock to the current shareholders of MJ Biopharma with an additional 3.75 million shares to be issued following the completion of certain milestones.
- Vinergy will issue 2.75 million shares upon the commercialization of MJ Biopharma’s strip technology.
- The company will issue 1 million shares when each of the two alternative selected extractions/products are ready for commercialization.
The shares will be subject to escrow conditions and/or resale restrictions as required by applicable securities laws and the policies of the Canadian Stock Exchange. This is a genius move by VNNYF and should be music to the ears of all VNNYF shareholders. This incentivizes MJ Biopharma to progress and succeed on their business plan which will bring even greater value to VNNYF and its shareholders.
Breakthrough in CBD Strips and Capsules
In February, VNNYF announced a breakthrough while conducting research & development on its oral cannabinoid delivery strips and controlled time release capsule technology. The company said the novel approach under development may become the basis for new products where water or saliva is the catalyst to activate the carrier for delivery and absorption of CBD into the body.
Management believes this breakthrough could form the basis of a new technology and has the potential to create an entirely new product category. The technology is called BURST, named for the speed at which it enhances the body’s absorption of various ingredients. The BURST technology is built around natural botanical polymers delivering specialty processed high purity cannabinoids. The patent pending technology allows for a more complete palatable drug delivery system that is effective and enhances patient or user experience and can intensify flavors.
Expanding Their CBD Extract Business
February was a busy month for Vinergy as they also announced a memorandum of understanding with Namaste Technologies to commercialize proprietary CBD extract formulations through Namaste’s retail websites in the United States. Namaste has approximately 300,000 customers who visit the company’s website more than 600,000 times a month. Vinergy will be distributing its proprietary formulations to Namaste’s monthly unique visitors.
Acquire 65% of Specialty Laboratory Applying for a Dealer’s License
Again, in late February, VNNYF signed a binding letter of intent to acquire 65% of Biolennia Laboratories. Biolennia Labs is a specialty development laboratory with expertise in microbiology and chemistry. The lab operates out of a secure facility in Toronto alongside Micrylium, which manufactures products registered under license from several agencies. It currently provides testing, R&D, and quality control for Health Canada registered and approved industrial disinfectants and other consumer products on behalf of Micrylium.
Biolennia is in the process of applying for a Dealer’s License from Health Canada which would let the company process cannabis for R&D purposes. Receipt of this license would be a major fundamental accomplishment for the company. Biolennia has in-house expertise when it comes to the methods accepted by both Health Canada and the FDA for determining the purity and quality involved in validating cannabis and testing cannabis products.
State-of-the-Art Extraction System
Moving on to March, VNNYF reported the development of a disruptive solvent-based extraction system. The project is already underway and the company will be providing updates and more information soon. Positive results from this project could be another strong catalyst for VNNYF.
The extraction system’s proprietary technology utilizes a blend of ethanol and CO2 co-solvent and specialized equipment to shorten the processing cycle, and increase the average production yield while also improving product quality. MJ Biopharma’s CEO said the system has been tested to work with other solvent blends and may be able to produce end products like terpenes, which would add IMMEDIATE value to the company.
The Reality of It All
When we first initiated coverage on Vinergy Resources in December 2016, the market strongly agreed with us as we saw the stock gain nearly 200% in just over a month. Since then, Vinergy has begun trading in the U.S. through ticker symbol VNNYF and trading of the Canadian ticker VIN.CN has been halted pending a fundamental change in the company. And based on company announcements and pure logic, we believe this halt is for the completed acquisition of MJ Biopharma.
Following the rally we saw in Vinergy stock earlier this year, shares have pulled in in recent months. Whether the pull in is just profit taking from people who were already up +100% on their positions or for some other reason, the current market conditions could be presenting a unique opportunity for investors to capitalize on a company that has had its stock halted pending a fundamental development. It is very possible that once trading resumes on the Canadian stock exchange for Vinergy that we see an increase in investor interest with the acquisition finally being complete.
If the halt is indeed to allow for the completed acquisition of MJ Biopharma, what was once speculation and hype on possibility is now becoming reality. And if Vinergy stock soared nearly 200% just based on the potential ‘what ifs’ of an acquisition, what do you think will happen when ‘what if’ becomes ‘what’s next’?
Disclaimer: Pursuant to an agreement between MAPH and a non-affiliate third party, we were hired for a period of 1 month from 5/1/2017 – 6/1/2017 to publicly disseminate information about (VNNYF) including on the Website and other media including Facebook and Twitter. We are being paid $150,000 (CASH) for or “ZERO” shares of restricted or unrestricted common shares. We own zero shares of (VNNYF) which we purchased in the open market.We may buy or sell additional shares of (VNNYF) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.
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