Friday Night Inc.

Highly Experienced and Nationally Regarded

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Volume | Market Cap | Shares | PEG Ratio | EPS

Fundamentals.

Overview:
HQ: Chilliwack, British Columbia
Incorporated: In 2008 as QuikFlo Health Inc.
Facilities: Nevada
Symbol: TGIFF, TGIF, 1QF
Exchanges: OTC, CSE
Licenses: Cultivation and production.
CEO: Brayden Sutton

Focus: Neutral
Primary: Growing, production, and distribution of medical and recreational marijuana in the United States, through its subsidiaries AMA and Infused. These co’s produce cannabis, edibles and infused products, including hemp-based. It also has a Canadian subsidiary, Spire, in the online cannabis sales security business.
Secondary: Commercialization of automated triage diagnostic imaging tool for the triage of stroke patients.

Size:
Market Cap: $57 mil
Enterprise Value: $74 mil
Size within cannabis industry: About 80 of 200+ (public co’s)
Size among cultivators: About 25th of 40   (public co’s)
# of employees: NA

Markets: Neutral
Primary: Las Vegas, Nevada, where recreational cannabis has been legal since July 2017. Las Vegas has a population of 2 million, with 45 million visitors per year. First year statewide sales will be close to $400 million with about $60 million in tax revenue. About 50 of the state’s 60 dispensaries are in Las Vegas, selling medical and recreational. Dispensaries can get cultivation licenses, which means cultivators without retail locations may get put out of business.
Secondary: Colorado (through a licensing agreement with Denver Dab Company)

Subsidiaries, Interests: Strong
Subsidiaries:
– Spire: In February 2018, it acquired 100% of Spire, a Canadian consulting company specializing in online security in the cannabis and mining industries. Spire has a contract with a provincial government to develop online cannabis sales protocols that prevent black market infiltration.
– AMA: It owns 91% of Alternative Medicine Association (AMA), a licensed medical and adult-use cannabis cultivation and production facility producing a proprietary line of cannabis-based products and third-party brands. AMA currently generates about 61% of Friday Night profits ($1.6 mil of $2.6 mil total).
– Infused MFG: Also owns 91% of this firm which produces hemp-based, organic CBD products.
– Grizzly Griptape, LLC, a subsidiary.
Agreements:
In June, 2018, Friday Night’s subsidiary, Infused, announced a one-year licensing agreement with Denver Dab Company (DDC) to produce Friday Night’s products in Colorado. DDC will produce Canna Hemp™ products: CBD Relief Cream, body lotions, lip balms, disposable Vape Pens, Vape Cartridges, Elixirs and Capsules, and Paws pet products.

Operations: Neutral
Cultivation: N/A
Current production: N/A
Future production: 1,500+ kgs from AMAs’ 12,000sf facility. 5,000 sf Infused facility will also produce
Distribution: N/A
Direct sales: No, it does not appear to sell retail or have a retail sales license
Store networks: It appears to currently sell all its goods wholesale

Integration/Diversification:
Vertically integrated: It grows, and produces brands, but does not appear to sell retail.
Horizontally diversified: Yes. In addition to cannabis production and wholesales, it is involved in cannabis security consulting, and hemp production (15%), which is smart. If there is ever a crackdown on cannabis, hemp is legal.

Financials: Strong

Management: Neutral
CEO: Brayden Robert Sutton
CFO: Michael Hopkinson
COO: Ben Horner

Branding: Strong

Valuation: Neutral
Current share price: $0.29
EV to Sales: 7.4  (Tobacco industry = 5)
Price to Book: 2.24
EV / sales rank in industry: N/A

Risks:
Friday Night is currently focused on the Nevada market. While cannabis is legal in Nevada, it is still illegal federally, so a federal crackdown could seriously damage Friday Night. Due to the US federal laws, Friday Night cannot access the public capital markets in the US. However, it is HQ’d in Canada, so it could access the capital markets in Canada.

Recommendation: Neutral

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Technicals.

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