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In early August, we highlighted CNRP Mining (CND.CN) (CRPGF) as an undervalued and attractive investment opportunity after it announced the acquisition of X-Sprays.
If you acted on this development, you are feeling pretty good about your decision as the shares are up 90% following the acquisition announcement.
An Execution Story
We are favorable on this acquisition and expect to see the company continue to execute and deliver value to shareholders.
X-Sprays is a very attractive company due to its product portfolio, its management team, and its track record. The company develops and sells a life-enhancement product line that is administered through an optimal oral spray delivery system.
X-Sprays’ proprietary product line is comprised of eight health care and life enhancement nutraceutical products that include both hemp CBD and nutraceutical ingredients (4 with CBD and 4 nutraceutical).
Issues Acquisition and Financing Update
Today, CNRP provided an update on its acquisition of X-Sprays and reported to have completed its due diligence process and is ready to move forward with the transaction. The company is drafting a definitive acquisition agreement and expects to have it completed within the next two weeks.
CNRP reported that it intends to close its previously announced non-brokered private placement offering of up to 10 million common shares at $0.30 each for $3 million in gross proceeds.
The company also received approval from The Depository Trust Company (DTC) and is now DTC eligible. After this move, the U.S. symbol, CRPGF up-listed onto the OTCQB exchange.
Targeting a Multi-Billion-Dollar Opportunity
The company is targeting indications with a massive addressable market and has focused its efforts on creating a natural product line of oral sprays to deliver medicines, nutrients and vitamins.
X-Sprays’ product provides a precise dose and each one contains a 30-day supply when used as suggested (8 sprays every day). The company’s products include:
- Pain relief – Fast acting and non-addictive
- Awareness – Increases focus naturally
- Sleep – Improves sleep without addictive additives
- Libido – Enhances your libido naturally
- Energy – Caffeine free and quick acting formula
- Recovery – A dose of natural ingredients to help you get through any day
X-Sprays plans to expand its product line to include THC based products and expects to see the products generate significant demand with consumers. The product line is unique when compared to other products on the market and we believe this offers the company a competitive advantage.
A Low-Cost Expansion and Growth Opportunity
X-Sprays is poised to benefit from a very significant trend within the cannabis industry, smokeless products.
One of the reasons why we expect X-Sprays to see continued growth is due to a growing trend toward smokeless products. Cannabis based products have also been found to possess tremendous health benefits and this has made the products very attractive to consumers, especially the elderly.
One of the attractive aspects of X-Sprays’ fundamental story relates to the minimal capital and resources needed to enter new markets. X-Sprays is implementing a multi-faceted distribution strategy and will use traditional retail outlets, its e-commerce outlet, and non-traditional retail outlets such as spas, bars, and hotels.
Keep an Eye on this Emerging Opportunity
While marijuana cultivation and retail operations continue to attract the most investor interest, companies like X-Sprays have flown under the radar. Cannabis based products and extracts are a burgeoning vertical within the legal cannabis industry and we expect this segment to continue to experience above average growth for years to come.
When it comes to cannabis investments, it always starts with the management team and we are favorable on X-Sprays leadership. X-Sprays is led by a management team that has more than 20 years of relevant experience and has demonstrated an ability to create value for its shareholders. The management team has worked hard to get the product to where it is today and they have been seeing strong re-order numbers from its e-commerce store.
We are favorable on X-Sprays’ ability to capitalize on a unique and massive opportunity within the cannabis industry. The company is still flying somewhat under the radar and we continue to view this as a stock investors need to watch.
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