GRAPEFRUIT USA INC.
0.0004+0.00 (+33.3%)
Oct 27, 8:00:00 PM EDT · OTC Markets OTCPK · GPFT · USD
Key Stats
Market Cap
442.68KP/E (TTM)
-Basic EPS (TTM)
0.00Dividend Yield
0%Recent Filings
8-K
Auditor resigns, no issues
Grapefruit USA's independent auditor, L&L CPAs, resigned on November 22, 2022, after ceasing public company audit services amid its PCAOB withdrawal—unrelated to any enforcement actions. No disagreements arose over accounting principles, disclosures, or audit procedures in the prior two fiscal years or through resignation. The company is now seeking a new auditor. This shift demands swift replacement to maintain reporting compliance.
10-Q
Q3 FY2022 results
Grapefruit USA's Q3 revenue plunged 98.1% y/y to $3K from $153K, with retail now dominating at 70.5% versus wholesale's prior 97.6% share, as the firm pivots from bulk cannabis distribution amid oversupply. Gross loss narrowed 69.0% y/y to $60K, yet operating loss held at $403K after trimming G&A 34.8% y/y; net loss improved 22.8% y/y to $758K, driven by lower interest expense, though net trailed operating by over 20% due to $370K interest and derivative shifts. Cash edged up to $24K, but $8.8M liabilities dwarf $2.7M assets, with $2.8M convertible notes (net) and $1.5M related-party payables fueling a $6.1M deficit. A binding LOI eyes acquiring Diagnostic Lab assets for $12.5M recap to build a cGMP facility and fund Hourglass studies. Exclusive licensing with wrestler Rob Van Dam bolsters California rollout. Still, regulatory hurdles under Section 280E cap tax deductions, squeezing margins.
8-K
Preferred stock issuance approved
Grapefruit USA approved a Certificate of Designation on September 21, 2022, creating 1,000,000 Preferred Series A shares with zero conversion rights, no liquidation preference, and a seven-year expiration, granting voting power equivalent to 67% of outstanding common shares. Bradley J. Yourist and Daniel J. Yourist each received 250,000 shares, each block voting at 16.75% of common shares. On October 11, 2022, the company amended its Articles of Incorporation, boosting authorized common shares to 2 billion and preferred to 2 million. This entrenches insider control while expanding share capacity.
10-Q
Q2 FY2022 results
Grapefruit USA's Q2 revenue slid to $24K from $82K a year earlier, a 70.8% y/y drop (derived), as wholesale distribution buckled under California's cannabis oversupply, while retail sales of Summit Boys extracts and Hourglass topicals climbed to 94% of the mix. Gross losses widened to $138K from $75K y/y (derived), squeezed by fixed facility costs and a $69K inventory write-down for damaged goods, most salvageable by August. Operating losses deepened to $866K from $602K y/y (derived), fueled by a $250K bad debt provision, yet net losses narrowed slightly to $1.4M from $1.3M, thanks to a $6K derivative gain offsetting hefty interest on $2.7M convertible notes (net of $90K discount). Cash dwindled to $5K amid $281K operating burn, but a binding LOI eyes DLC assets for $12.5M recap to fund the 30,000 sq ft Mothership facility and osteoarthritis studies. Debt covenants loom tight. Health Canada now greenlights Hourglass sales nationwide. Still, federal cannabis bans hobble expansion.
8-K
Acquisition and recapitalization LOI
Grapefruit USA inked a binding LOI on June 30, 2022, to acquire Diagnostic Lab Corporation, its IP, and affiliates for cash plus undetermined common stock shares. The deal pairs with a $12.5 million recapitalization—including a committed $5.5 million debt facility—to build a cGMP-certified cultivation and manufacturing facility in Desert Hot Springs, CA, fund the Hourglass 510K Project and Hyer Medical Study on osteoarthritis, and secure working capital for positive cash flow. This positions the post-acquisition entity for operational scale-up.
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