CANL CannLabs, Inc Reverse Merger скачать в хорошем качестве

CANL CannLabs, Inc Reverse Merger

http://www.reverse-merger-shell..com Reverse merger attorney John E. Lux looks at the recent reverse merger CannLabs, Inc. -- CANL On Friday the 13th, CannLabs, Inc. announced its reverse merger with SpeedSport Branding. CannLabs will trade on the Over The Counter Bulletin Board (OTCQB) under the symbol SDSPD, until on or about July 10, 2014, at which time it will be quoted under the symbol CANL. In this deal Carbon Bond Holdings, Inc. became a wholly owned subsidiary of CannLabs. Carbon Bond is a cannabis testing facility. Immediately following the closing of the merger, CannLabs completed a private placement of 500,000 shares of its Series A Convertible Preferred Stock in a private offering, resulting in gross proceeds of $500,000 and issued five year warrants to purchase 20,000,000 of its common stock at $0.15. The investor entered into a note purchase agreement, pursuant to which the investor agreed to provide $750,000 in additional funding to CannLabs through November 15, 2014. CannLabs has agreed to file a registration statement with the Securities and Exchange Commission covering the resale of the shares of common stock underlying the Series A Convertible Preferred Stock and the warrants. CannLabs acquired Carbon Bond for 59,295,000 shares. It also swapped out SpeedSport Branding for 111,545,535 shares, leaving it with 65,520,000 shares outstanding. Of these, 87.8% where held by the new shareholders and 9.5% by the old pre-merger shareholders. 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. 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%. Following the closing of the Merger, the closing of the Private Placement, and the cancellation of an aggregate of 111,545,535 shares of the Company's common stock in connection with the Merger and sale of SpeedSport Branding Corp., there were 65,520,000 shares of CannLabs common stock issued and outstanding. (This excludes 30,048,077 shares of common stock issuable upon conversion of the Series A Preferred Shares, 20,000,000 shares of common stock issuable upon exercise of warrants and 4,000,000  shares of common stock reserved for issuance under the Company's equity incentive plan). Friday the stock traded at a high of $1.50, closing at $1.38, an increase of 369%. 110,585 shares were traded. OTCShortReport.com shows that 82,266 shares of this volume was sold short, or 74.39 %. Presumably much of this, if not all, was from market makers who were forced to meet the increase in demand after the news without much stock showing up from the limited float. SpeedSport Branding was a development stage company operating as a small motorsports organization to participate in road racing events. This company had some activity, showing almost $100,000 in shareholders equity, and a small loss on $22,000 in revenue for the last reported quarter. In connection with the reverse merger, it was split off in exchange for the cancellation of stock. Cannabis is a hot item in the OTC market, so much so that the SEC found it necessary to issue a warning in May. It appears that the warning did not crush expectations for CannLabs. Adding the stock from the warrants and the convertible preferred to the outstanding stock and valuing it all at $1.38, this amounts to a market cap of some $147 million. We note however that the warrants and the preferred can only be converted in limited quantities. The potential profit of the investor in the convertible preferred are substantial. Although this investor is bound to provide another $750,000 in debt, if it can convert the preferred into common and sell at $1.38, it turns its $500,000 into $41,446,346. Throw in a full conversion of the warrants at that price and you get a $24,600,000 kicker for total proceeds of $66,066,346 on the $500,000 investment, a slightly better return than putting the money into a bank certificate of deposit, but with more risk. The risk is lessened by the fact that the investor will have a $750,000 note with a lien on all the assets. If things crash and there is a default, which seems highly unlikely, the investor has put up $1,250,000 and owns it all. The deal also has the potential of giving the investor who facilitated it a huge profit. If it can liquidate at the closing price Friday, it gets 132 times its investment. In order to break even on its $500,000 investment, it has to convert and sell at less than two cents and it gets 8% on the preferred while it waits.