Ayurcann stock (AYUR.CN), a Canadian cannabis extraction company specializing in the processing and co-manufacturing of pharma-grade cannabis and hemp to produce various derivative cannabis 2.0 and 3.0 products in the medical and recreational market, has recently provided an update on its growth in production and market share in recreational cannabis in Canada. The company also announced it would do a buyback share program.
In the detailed corporate update, the company shared several highlights:
Ayurcann announced it would acquire up to 6,085,890 common shares in the capital of the Corporation, representing approximately 5% of its issued and outstanding Common Shares. As of February 28, 2022, there were 121,717,818 Common Shares issued and outstanding. On any given day during the NCIB, the Corporation may only purchase up to 15,000 Common Shares, which is equivalent to 25% of the average daily trading volume of 60,000 calculated based on the trading volumes on the CSE over the past 12 months and may purchase once per calendar week.
The company’s board of directors believes that the market price of the Common Shares may from time to time not reflect the underlying value of the Corporation, specifically its growth opportunities and that the proposed purchasing of its Common Shares is in the best interests of the Corporation and represents an appropriate use of corporate funds.
It is positive as it will reduce the number of shares and the float. Businesses carrying out this type of program show that they are confident in their company and their growth forecast. In addition, it augments the trust of current and potential investors in the business.
According to their last financial statement, Ayurcann has $1,886,817 in cash for $9,839,096M in total assets, for only $3M in liabilities.
If we dive deeper into revenue analysis, their B2C brought to the company $599,426, $1,597,925 for the B2B, and $1,022,057 for services. Their most significant expenses are salaries and wages, office and general, and marketing ($214,427, $231,608, $202,365).
Regarding the total number of shares, there currently are 118,769,391 shares outstanding, 3,113,835 options with an exercise price of $0.17, and 24,918,465 warrants with an exercise price of $0.18. The current stock price does not enable the company to exercise these additional assets to leverage more cash.
The company currently has a market cap of $20 and is traded at $0.17.
The volume has increased steadily over the last 50 days. The steady positive amount of news shared by the company will attract new investors. The buyback program will also augment the average.
For now, we have several walls centered around $0.18 (exercise price for the warrants). There are 139k shares included in selling orders. It might lead to a halt in the increase of stock price. Besides, there are no big selling orders beyond these walls, meaning it will be easier for the stock price to get more value with the increased volume combined. So far, the Bollinger bands indicate daily fluctuations between $0.16 to $0.17, but with the increasing volume, positive data, and the walls being cleared soon, we should not see this price for long.
Ayurcann is moving toward the right way. Quants Report defines the stock as very undervalued and gives them a fair valuation of $0.31 (100% upside compared to the current SP). More will come as the company expects further sales with its exclusive partnership brands such as; Innocan Pharma, Her Highness, Joints, Hustle & Shake, Bravo6, Lucky Dragon. They are also creating products to meet the demand of Canadian consumers. The company’s undervalued position grants investors an excellent opportunity to either invest in the company or add more to their portfolio.