Greenfern

[Lion_graf]

Minimum investment 500. BTW you are buying at $2 a share. Cannasouth is around $1 a share as of late with plenty of sharesies investors propping it up. Plus they're listed on the NZX.

I do like the straight forward guidance of what Greenfeen are trying to achieve. But how do these two companies, cannasouth and greenfern compare?

Greenfern aims to raise $4million in second equity crowdfunding round

Dan Casey
Medicinal cannabis company Greenfern Industries has today launched its second equity crowdfunding campaign.
It’s hoping to raise up to $4million which will enable the company to purchase the hydroelectric power station as a strategic asset next to its state-of-the-art medical cannabis research and extraction facility in Taranaki. It has already raised over $500,000.
From the outset, Greenfern has been striving to be New Zealand’s most sustainable and environmentally friendly medical cannabis company.

Director Dan Casey said purchasing the power station outright would enable the company to fast track its growth ahead of a planned IPO next year.
“We have been leading the way in the industry since initial legislation passed in December 2018, and now with the new Medicinal Cannabis Scheme that recently came into effect allowing the commercial cultivation, manufacture and distribution of medicinal cannabis in New Zealand we are ready to grow even bigger and better than before,” Casey said.
Greenfern first ran an equity crowdfunding campaign in December 2018 when they raised $1.8million that was used to develop the company’s research facility. Since then they have also partnered with several reputable organisations to distribute medicinal cannabis products, and to undertake research and development of cannabis-based products including a hemp meat substitute and snacks. They’ve also added cultivation licences and launched hemp oil and manuka honey wash bars.
While the company has an agreement with the power station operator that means Greenfern’s power usage is billed at a significantly reduced commercial rate, owning it outright would mean its power costs – one of the largest overheads for a medical cannabis operation – would be even lower. Greenfern is also looking at upgrading the power station’s generation capacity so it could also sell the additional power produced to the national grid.
“By reducing our cost of production, we’ll be able to offer products that are exceptionally high quality at an affordable price for the New Zealand market. That’s an enormous competitive advantage,” Casey said.
“With the global cannabis industry expected to be worth in excess of $70 billion by 2025, we believe we are well positioned to take advantage of both national and international market opportunities.”
Greenfern, which was founded by five school friends with a passion for innovation, has partnered with Australasian company Equitise for the equity crowdfunding campaign.
Greenfern recently signed an exclusive distribution agreement with UK company Brains Bioceutical Corp (Brains) to sell their pharmaceutical grade cannabidiol (CBD) products in New Zealand, giving Kiwi patients access one of the world’s best pharmaceutical-grade cannabinoid products.
“We expect to have our own medicinal cannabis finished products ready for the market in about 12-24 months, but even then, we’ll continue to distribute Brains’ products due to their sustainable quality and EU good manufacturing process accreditation,” Casey said.
The minimum investment is $500.
“We have chosen this form of capital raising to make it easy and accessible for everyday Kiwis to invest and join us on our journey to make sustainable, world-class medical and therapeutic cannabis products available to those who need it.

[MarineSalvage]

great, another cannabis company...

[thegreatestben]

We chucked $500 into this in the first crowd funding. Will be interesting to see whether it was worth it in the years to come.

[Lion_graf]

We chucked $500 into this in the first crowd funding. Will be interesting to see whether it was worth it in the years to come.

What was the SP for the first crowd fund?

[thegreatestben]

What was the SP for the first crowd fund?

$1 per share.

Unsure if it was the first or not, but it was March 2019.

[Lion_graf]

I would consider it at $1 but I dont believe $2 a share is justifiable for a company who is currently unprofitable with a very long road ahead. I dont know how much revenue that hydro station would produce on its own or what state it is in with needing maintenance etc.

Does anyone else think similar thoughts?

I mean reputable businesses like OCA and KMD are sitting just over a dollar. :/

Interested to know if anyone can share some thought why it would be a good idea to invest?

[Cricketfan]

I mean reputable businesses like OCA and KMD are sitting just over a dollar. :/

Does comparing $ value of the share price between these companies make sense?

[Lion_graf]

Does comparing $ value of the share price between these companies make sense?

Not really, but taking into consideration NTA/market cap would. Surely at $2 a share they are getting ahead of themselves with prospects growth in a market that become saturated very quickly as seen happen in other countries.

[Joshuatree]

yes $2 meaningless without the facts.Heres another potential listing which is of more int to me atpit

Rua Bioscience | Homewww.ruabio.com (https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwjXmPCayPvrAhWO4jgGHVYoD1UQFjAAegQIARAD&url=https%3A%2F%2Fwww.ruabio.com%2F&usg=AOvVaw32zJhnBZ8tj5J500LgyRJS)

[kiwical]

They seem to be inching closer to listing on NZX. Have completed the first round of questions required for listing and amended their constitution. Company-wise their mini hydro power station is up and running. They are applying for council consents for stage two of construction for the grow area. Their hemp meat substitute product seems to be doing well and is on the market. I like this company for the diversity even if the medicinal cannabis doesn't quite get off the ground, or ends up operating in a saturated market. Their little hydro power plant seems a real point of difference and lends itself to a range of uses.

[Snow Leopard]

https://www.nzx.com/announcements/380882

Due to commence trading on the NZX on Thursday 21st Oct 2021.

'Reference price' $0.25

Disc: not interested

[carrom74]

Shareholders have purchased shares worth $1 in the first round and $2 from the second round onwards. 25cents listing means a straightforward loss to them .. or am I missing something here…

[nztx]

https://www.nzx.com/announcements/380882

Due to commence trading on the NZX on Thursday 21st Oct 2021.

'Reference price' $0.25

Disc: not interested


Nor me - not interested either

[Dlownz]

They probably need more cash.
Wait a month or two. Then there will be a cap raise for 15cents. Feel sorry for the people that Brought in on this so early

[nztx]

https://www.stuff.co.nz/business/300430177/taranakibased-medicinal-cannabis-company-to-list-on-nzx-at-25c-a-share

Taranaki-based medicinal cannabis company to list on NZX at 25c a share

[kiwical]

Shareholders have purchased shares worth $1 in the first round and $2 from the second round onwards. 25cents listing means a straightforward loss to them .. or am I missing something here…Does it have to mean it's a straight 1 for 1 deal? I mean if the initial shares were $1 each can that mean instead 4 shares are issued to that holder for each 1 of the original shares held when they are listed on NZX?

[kiwical]

Email from greenfern "One question we have been asked is around the 25c share price which will be quoted upon listing. Essentially our current share capital was based on a $2 per share price. We have increased the number of shares in the company by 8 fold by doing a 1:8 share split. An example of this is if you previously had 1000 shares held with GFI, after the split you will now own 8000 shares at a value of 25c per share."

[Baaarney]

Today’s email from Greenfern said the listing involves a share split due to more shares being

One question we have been asked is around the 25c share price which will be quoted upon listing. Essentially our current share capital was based on a $2 per share price. We have increased the number of shares in the company by 8 fold by doing a 1:8 share split. An example of this is if you previously had 1000 shares held with GFI, after the split you will now own 8000 shares at a value of 25c per share.

[whatsup]

Today’s email from Greenfern said the listing involves a share split due to more shares being

One question we have been asked is around the 25c share price which will be quoted upon listing. Essentially our current share capital was based on a $2 per share price. We have increased the number of shares in the company by 8 fold by doing a 1:8 share split. An example of this is if you previously had 1000 shares held with GFI, after the split you will now own 8000 shares at a value of 25c per share.

Although not interested in this share, too many coming on to the market now, I wonder if there is an embargo for the current S Hers ?

[Sideshow Bob]

Although not interested in this share, too many coming on to the market now, I wonder if there is an embargo for the current S Hers ?

Proposed listing date is Thursday. NZX, New Zealand’s Exchange (https://www.nzx.com/companies/GFI/upcoming_listings)

[Muzz1234]

See they have a hydro dam be interesting to see what the savings are from not having to buy power off the grid if anyone knows what power consumption to grow Marijuana guessing be high

[Muzz1234]

Seems to be a successful first day for them up 66percent I took part in crowd funding at one point very small holding I bailed today took my money to put somewhere little more proven and established

[carrom74]

Seems to be a successful first day for them up 66percent I took part in crowd funding at one point very small holding I bailed today took my money to put somewhere little more proven and established

Well done on selling up . The train wreck has just begun . Down 20%.. wonder how it opened 66% up at the first place..

[Muzz1234]

I have no idea few over optimistic souls I was pleased to be out was going to sell around 25cent listing price be happy get money back got nice wee bonus I went through stage putting money into odd crowd funding company here and there

[shareman]

12345678910

[kiwical]

Well none of the cannabis companies you could say are performing exceptionally well. RUA and CBD have similar looking downward graphs. I think it's just a matter of getting product out there. Most are still at the testing/compliance stages. 3 of these type of companies might be a bit much in NZ? I think all were formed before the NO vote around cannabis reform. If that had gone the other way they might be looking better. I don't know much about salaries and what is excessive, but I'll email to join anyway.

[Sideshow Bob]

https://www.nzx.com/announcements/412218

Revenue up 368%!!

[winner69]

https://www.nzx.com/announcements/412218

Revenue up 368%!!

SailorRob won’t believe that

[Sideshow Bob]

SailorRob won’t believe that

Well, it was off a very, very low base......;)

[whatsup]

Having a quick look at their todays ann, if their losses continue this year IMHO the company will need a large share issue, who will front up if this is the case ?

[percy]

Having a quick look at their todays ann, if their losses continue this year IMHO the company will need a large share issue, who will front up if this is the case ?

SailorRob..????????????//

[ValueNZ]

Says alot about a company when the first thing they write on their highlights is achieving B-Corp certification... net loss of $2 million what a terrible result

[SailorRob]

SailorRob..????????????//

Yep going through document to make sure nothing defamatory then will post.

There are lots of people involved including the CEO of the NZX and sharsies etc.

Gotta look after myself first.

[percy]

Yep going through document to make sure nothing defamatory then will post.

There are lots of people involved including the CEO of the NZX and sharsies etc.

Gotta look after myself first.

Stay busy......

[shareman]

Greenfern lurch from one disaster to the next, their CEO is deluded, sell your shares while you still can and if you were ever stupid enough to pay for these

[SailorRob]

Greenfern lurch from one disaster to the next, their CEO is deluded, sell your shares while you still can and if you were ever stupid enough to pay for these


Exactly right, I have a lot of information on the whole debacle that I'll try post ASAP.

It's essentially a fraud.

[shareman]

Why is there no mention of their "power station" in their recent results, I thought that was the big thing that was going to make all the money

[RTM]

I received a bunch of information on this as I was interested. The documentation made it pretty clear it was risky.

"This is a higher risk investment and only suitable for eligible investors. To participate in this offer you have to sign and get your accountant or solicitor to witness that you are an eligible investor.

Below is a declaration you can complete and your accountant or solicitor can witness that they consider you an eligible investor.

Once you send this completed declaration back to me, then I will send you more documentation and information about this offer. Please click on the link below.

The shares are being sold at $2 per share with a minimum value investment of $25,000 or 12,500 shares."

Didn't buy.
Yes...there was a small power station associated with it. One of the reasons I was somewhat interested.

And yes....Brent King was well and truely engaged with this.

"Please note that Brent King, the CEO of Equity Investment Advisers Ltd is a shareholder and chairman of Greenfern Industries. Further, the sponsoring company for the proposed listing is Investment Research Group, which is also a shareholder and Brent king is a director of the latter."

[SailorRob]

Why is there no mention of their "power station" in their recent results, I thought that was the big thing that was going to make all the money

It was a fraud, bought from one of the directors in a undisclosed related party transaction at far above market value and it wasn't in operation as shut down by environment court.

The FMA investigated more than once.

[shareman]

Sharesies are absolutely implicated in this being the facilitator of the last rights issue

[Fortunecookie]

Isn't one of the directors the ex SFO boss. It's a big call.

Anyway I here with my popcorn.

[SailorRob]

Sharesies are absolutely implicated in this being the facilitator of the last rights issue

Man you wait till you read what I've dug up.

[thegreatestben]

Looking forward to reading it :)
I had some of these before being listed and sold for a decent profit - sounds like I got lucky

[SailorRob]

Looking forward to reading it :)
I had some of these before being listed and sold for a decent profit - sounds like I got lucky

Sweet, yeah there's a bunch of links to other articles within it that I need to make sure work when I post it etc will try get it up this evening.

[SailorRob]

After a friend mentioned to me that they had been offered a ‘Shortfall’ through Sharesies to invest in a company called Greenfern Industries Limited, I decided to take a closer look and was so disgusted with what I found, I wrote up a small report.


While reading through this please remember that when this company was desperately seeking money after having taken so much money out for themselves and the conventional route failed, it was pushed on Sharesies’ clients via their app, email list, website and Facebook page. Sharesies say that their aim is to democratise investing and before we were graced with their presence, they say that ‘investing was too hard, too complex, and too damned scary for too many’ They are supposed to champion the rights of the small retail investor and state ‘Our investing experience works towards giving people the confidence and control to invest. We believe that by giving someone the opportunity to invest—while supporting them to learn—we’ll create a community of financially empowered people’ The reality is that they at a minimum have broken their fiduciary obligation to their clients and are complicit in what ultimately could be viewed as fraud - but you can judge for yourselves.

Also remember this company was not only allowed to list on the New Zealand Stock Exchange, the CEO of the exchange, Mark Petersen sings the company's praises in a youtube video https://www.youtube.com/watch?v=dM-DifKZdns&t=71s Think of all the compliance officers, all the fancy suits in their offices, the regulators and the regulations that this abomination slipped through. The Financial Markets Authority investigated the company but as far as I’m aware did nothing.

There is nobody that is going to protect you but yourself, even though it is their job to do so. Everything in this report I have sourced from public information, mostly through Greenferns own filings and some from various media reports. Lots of people get rich in the same manner as I will highlight in this report and nobody cares.




While not the intent of the report to delve into the NZ cannabis industry or lack thereof, note that there are many NZ Cannabis startups that rely on hype and investor naivety to raise capital and this area is the real wild west of capital markets. There have already been bankruptcies such as Medican, who said they were going to ‘build an industry to rival NZ’s Kiwifruit’. Some of the biggest names in the Bay of Plenty's business world got sucked in.

I strongly recommend reading this Stuff article https://www.stuff.co.nz/business/300084754/the-wolf-of-weed-and-the-bitter-collapse-of-a-medical-marijuana-venture before reading my report and I think Greenfern is a bigger scam in terms of the money involved. Note the Serious Fraud Office's lack of interest.


A RNZ article https://www.rnz.co.nz/news/national/427029/thai-cannabis-company-says-projected-economic-benefits-won-t-materialise also gives a good summary of the industry, here’s a quote from the article ‘And in fact, almost all the money poured into the New Zealand cannabis industry is likely to go right down the gurgler’. I strongly disagree, it won't be almost all, it will be ALL.




In 2018 The company presently known as Greenfern Industries (GFI) was incorporated as Greenfern Medicinal Marijuana. It had no assets and was merely an idea or a ‘business plan’. The founders collectively put into the company $36,167 as ‘establishment income’ and recorded it as revenue in the 2019 financial statements. This money was used for the purposes of establishing the Company and for day-to-day operations of the Company after its inception. As far as I can tell this was the only money ever put into this company by the founders. It was all expensed (gone) that year.

So at the beginning of 2019 we had an incorporated company that owned nothing, (had zero assets) that was owned by 13 shareholders in proportions from 20.9% down to 0.1%. The top 5 owned 88.11% of the company. It is critical to understand at this point that 88.11% of nothing is nothing. So although the 13 shareholders owned 100% of the company, that amounted to zero. There was nothing. We will later see that at this stage of nothingness the company was valued by themselves at $6,666,667 as they ‘forecast’ revenue and then applied a multiple to that forecast. Cannabis entrepreneur Ross Smith, from the linked article above, known as the ‘wolf of weed’ heavily criticised Greenfern at the time over what I have just raised.If you read the article you will know that really is something special.

It is here that the first Greenfern scandal (that I know of) broke out when Director and 18.81% shareholder Tim Mark Johnson had part of an online conversation leaked. The conversation was between nine "Greenfern strictly confidential" group members and the leaked conversation involved Mr Johnson discussing ‘grower strains’ and telling its other directors to “pump up” Greenfern’s Intellectual Property books and “make investors feel better – like a company of substance” - this was all to try and create an illusion of value for the upcoming crowdfunding raise. To try and turn nothing into something by saying that their Intellectual Property (of which there wasn’t any) was worth something.

This scandal was reported on by the NBR https://www.nbr.co.nz/business/medicinal-marijuana-company-director-steps-down-after-online-comments/ at the time and led to Mr Johnson stepping down from his role as director. Or so he said. At the time of publishing which was after the crowdfunding raise, his role had not been removed from Greenferns website or the Companies Office (a government agency).

In a written statement Mr Johnson said ‘It was an over-exuberance on my part and there was no intention to mislead investors. I appreciate my comment would concern potential investors. However, Greenfern has been nothing but scrupulous in the financial information that we have provided to our investors’

Well as we are about to see, stating that ‘Greenfern has been nothing but scrupulous in the financial information that we have provided to our investors’ is misleading enough as it is.

The first (of many) magic tricks courtesy of Collision Crowdfunding.

The founders of Greenfern managed to sell 30% of nothing at the bargain price of 1.8 million dollars. And guess who now owned the other 70% of the new 1.8 million in cash from unsuspecting crowdfund investors. Yes, the founders.

So before the crowdfunding, the founders had collectively parted with $36,167 and immediately afterwards they had collective ownership of over around $1.2 Million in cash (70% of the new shareholders money they had just put in through the crowdfunding). Or a 3,300% instant return. But we cannot be too sure about the exact numbers as the;



Collective crowdfunding website says that $1,818,482 was raised




The NZX listing profile says $1,963,204 gross or $1,733,926 net http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/GFI/381334/357436.pdf




The audited 2019 financial statement says $1,620,626 came in with $86,000 in associated costs - so $1,534,626 net.


So what actually happened is that $1,963,204 was put in by the crowdfunders, Collision crowdfunding took $229,278 or 11.7% of the money for the raise which is fair enough… BUT then Greenfern spent another $199,300 or another 11.5% of what was left for what they say were ‘costs related to the shares issued’. After reading this report, you will be under no illusion as to where most of that $199,300 ended up.

Only $1,524,626 was leftover for the company.

Well, was it for the company? We see net assets listed at $1,458,648 in the same financial statement which was 31 March 2019 only a Month or so after investors put in who knows exactly how much. At this time, John Hussey had already extracted $40,671 out for himself in ‘contractor payments’ and Fluidity had extracted $12,046 for advertising services. Fluidity is owned and directed by… John Hussey. Now maybe these payments are all above board and at a competitive price for the benefit of the company and thus all shareholders. And maybe they are not, why should these related party transactions exist and have no detail or explanations, surely if they were beneficial to the company the related party transactions would be justified?

Well folks, grab some popcorn because we are only just getting warmed up. So as of the 31st March 2019, of the $1.8 million put in by the investors (or gross $1,963,204), John Hussey had already got his hands on $271,500 that we know about, in equity ownership of the crowdfunders cash within the company and from payments made back to him.

For the next section - on the valuation of the company that was presented to prospective shareholders during the original Collision Crowdfunding round, it’s important to note that I only have the current document and as we will see later, the second crowdfunding round was investigated by the Financial Markets Authority for an absolutely disgusting and illegal act that beggars belief. Subsequently they (Greenfern Directors) went back and changed the offer document so that the original fraudulent document doesn’t exist. The point being the first crowdfunding document that I'm about to review may not be the original, but the misleading information still remains in it so it will suit our purposes.

The company's valuation, we are told, was undertaken by the founding shareholders. They used something called the ‘multiple of projected revenue method’ Which means make up a guess as to what future revenue will be for a company that only exists as an idea and then multiply that by some number. And this is what Tim Johnson was trying to ‘pump up’ in the leaked online conversation.

The listing document states the valuation to be $6,666,667. No I am not making this up. But the document also states that $2,000,000 is equal to exactly 30% of the company, so by my calculation the ‘valuation’ is $6,666,666.66. I think they threw the 7 on the end to take the Devil out of it.

So all you need to do is invent an idea, then invent how much revenue your idea will make and then invent a number to multiply this by to arrive at your company's valuation. We can all do this, but of course another name for this is Bul$*^t. In most cases this is harmless childish fun, but when you use this make-believe to scam real people out of real money using dubious Crowdfunding facilities then it becomes very, very real.

What comes next?

Well, if you have managed to take a $36,000 dollar ‘investment’ and turn it instantly into $1.25 million while also funnelling another $58,000 back to yourselves (total related party transactions) The answer is pretty damn obvious.

Do it again, but do it better.

The second Crowdfunding round, colloquially known as the Great Hydro Heist., The directors of Greenfern decided they were going to buy a Taranaki Hydroelectric power plant. Now any image this has conjured up in your head, just hold on a minute.

In the glossy prospectus (the one later changed after the Financial Markets Authority probe AND after the money had gone) They told investors that this acquisition was critical in ensuring a competitive advantage in the NZ cannabis growing industry and of course all the guff about renewable power as you can imagine. Before moving onto the actual fraud I’d like to briefly point out a couple of other issues. They state that the purchase of this ‘landmark asset’ will ensure that ‘Greenfern’s electricity costs will be capped at the price of operating the power station, equivalent to approximately one full time employee’. Really? So there are no capital costs involved with operating the power station and the cost of the capital used to buy it is free as well? There are many things glaringly obviously wrong with this plan but they take a back seat for reasons we are about to see.

The Hydro plant was owned (prior to being bought by Greenfern) by a company called Renewable Power Limited which appears to purchase decrepit small old river hydro stations that are a relic of our small towns pasts (think of the tiny old dairy factories scattered across the country) and then do who knows what with them. This particular plant which investors were told was the key to the company's future, was in all kinds of trouble.

So just to be clear, Greenfern was raising funds through Crowdfunding to buy some decrepit old hydro plant from Renewable Power Limited.

And who owned Renewable Power Limited?

Tim Johnson, the Greenfern director and shareholder owns 90% of the power station AND Kevin Chong another Greenfern Shareholder who was also in from the beginning owns 5% of the power station. Greenfern co-founder and managing director Dan Casey was also listed among the shareholders of Renewable Power until September 29, 2019.

Casey and Johnson have known each other since their high school days in Dunedin.

The Crowdfunding document (which has now been changed) was 38 pages long. The Power Plant was one of the biggest things discussed in the document and in all of the 38 pages they did not see fit to mention this massive conflict of interest. As reported by the NZ Herald - The documents left an impression the deal for the hydroelectric plant was being made with an unassociated third party, simply saying: "Greenfern has a binding right of refusal in place to acquire the facility".
The whole sordid affair is reported here (https://www.nzherald.co.nz/business/cannabis-concerns-greenfern-industries-2m-plus-capital-raise-throws-up-disclosure-issues/FRL6K5XO5S34VDT6CCYMLME6DI/) by the Herald.

You can see for yourselves by reading this article that Dan Casey the director of Greenfern is a pretty interesting individual.. His comments are stunning in their lack of comprehension about what he has done.
"Some people could look at that one way or the other, but we are totally transparent about what we're doing."

Pressed on whether investors deserved to know about the close ties between the two companies, Casey acknowledged he may have done things differently if he had to do it again
.
"Look, hindsight is a wonderful thing," he said. "Would we do it differently next time? Potentially. But we can't take that back now."

So he is stating in the national media that they are totally transparent about what they are doing and that he would only potentially do things differently if he had to do it again.

But there is more, much more. They haven't even listed on the stock exchange yet!

This is from their own 2021 NZX listing document about the changes that were made to the crowdfunding document -
The Information Memorandum for the 2020 crowdfunding round was updated on two occasions to address concerns raised by the Financial Markets Authority: (a) on 7 October 2020 further information was included on page 18 regarding what was then the potential purchase of the Hydropower Station; (b) on 19 October 2020 further information was included on page 7 to clarify the status of all prior, current and future licences, particularly the medicinal cannabis research licence held by the Company at that time.

Now we discover that this piece of worthless junk they call a power station isn’t even operable and has been shut down since the Environment Court issued an enforcement order in 2017. The link to the court order is here (https://www.justice.govt.nz/assets/Documents/Publications/2017-NZEnvC-192-Taranaki-Regional-Council-v-Renewable-Power-Limited.pdf). There were 8 infringement notices and two abatement notices between 2015 and 2019. As reported by the Herald there are all kinds of maintenance and environmental problems and an ongoing battle between the owners and the Council.
This (https://www.stuff.co.nz/business/88931544/hypropower-company-submits-false-water-data--taranaki-regional-council-claims) 2017 piece by Stuff is a great insight into the dysfunction of the power station and the relationship between the former director of Greenfern, Tim Johnson and the Taranaki Council.

Mr Johnson stated that "The TRC recently attacking Renewable Power Ltd's environmental performance is like God attacking Jesus for being unholy," As we have discovered so far, there is nothing holy about these individuals involved in Greenfern.

It turns out that Tim Jhonson then had a falling out with Greenfern and after leaving the business formed a shareholder activist group called ‘Greenfern Watch’. Newsroom reported (https://www.newsroom.co.nz/a-lack-of-love-and-peace-in-the-cannabis-biz) in November 2022 that ‘The crux of the two-member shareholder activist group’s claims is that Greenfern’s small hydropower plant, which it uses to generate electricity for its growing operation, isn’t actually working’. This led to Casey having to engage once again with the NZX regulators.
Whilst on the topic of the second crowdfunding raise that they did in order to purchase a decrepit broken old hydro station from themselves and didn’t disclose it, let's take a look at the numbers and financial information provided by Greenfern to prospective investors, bearing in mind that earlier, a director (Tim Johnson) had provided a written statement that

‘Greenfern has been nothing but scrupulous in the financial information that we have provided to our investors’.

Please also bear in mind that this prospectus document that I have viewed has been retrospectively changed (as reported by the NBR) to add in the previously undisclosed ownership of the power station. It’s a wonder they have not gone back and changed these numbers. Let us remember that the original valuation done by themselves was based on made up revenue projections and a made up multiple, so the forecast revenues are immensely important information and must be based on something real in order to comply with New Zealand Financial Markets Conduct Act 2013.

[SailorRob]

As stated in the second crowdfunding document (https://equitise-v3.cdn.prismic.io/equitise-v3/32bdb512-3339-4c06-bbdb-4ca3d9301f04_GFI-InfoMemo-19Oct2020.pdf) the revenue for 2020 was a grand total of $22,676. That’s the total amount of money that came into the Business. Meanwhile $241,649 went out to the founders in related party transactions alone that year. More than 10 x the incoming revenue went out back to themselves. There was a bunch of money going out to them in 2019 as well.

So the forecast revenue is the most important number for this company at this stage and the most important information contained in the Crowdfunding document (the power station being bought off themselves would have been more important, but it wasn’t there). We can see the forecast revenue for 2021 was $223,560, for 2022 it was $7,918,513 and for 2023 it was $28,847,059.

This is a forecast rise in revenue of One Hundred and Twenty Eight THOUSAND percent in 3 years.


In an article titled ‘Cannabis Bubble Set to Burst? (https://www.nbr.co.nz/investment/cannabis-bubble-set-to-burst/)’ by the NBR,13th October 2020, this very set of numbers is highlighted very sceptically. Have a look at the end of page 9 of this report to see how the actual 2022 Revenue stacked up against this forecast.

Now look at the EBITDA figures and the Gross margin for 2023. A forecast 73% Gross margin. 73% wow, that’s 30% higher than Google. How many up and running successful medical cannabis companies anywhere in the world have gross margins of 73% let alone after 4 years of operation?
Why did nobody question these numbers, the Equities Crowdfunding company, the FMA, the NZX when they went to list, the Directors themselves and Sharsies who we will get to in good time. In the Herald article linked above, they state;

‘Following Herald inquiries, the Financial Markets Authority (FMA) said it was looking into the information provided to investors and had made contact with crowd-funding platform Equitise. "All equity crowdfunding offers are subject to 'fair dealing' requirements in the Financial Markets Conduct Act and issuers using a crowdfunding service must ensure that offer documentation is not misleading or deceptive including by omission," a spokesman from the FMA said.
How could any rational person claim that these numbers are not grossly misleading?

We have covered quite some ground so far but we still haven’t even got to the NZX stock exchange listing where all kinds of complex regulatory compliance must be met that is required by law. It’s probably worth posting this link (https://www.youtube.com/watch?v=dM-DifKZdns&t=71s) to the video of Mark Peterson the CEO of the New Zealand Stock Exchange singing Greenferns praises as they list.

Think about how many compliance officers and legal staff the NZX employs that are supposed to screen this rubbish from being listed on the nation's premiere exchange. It is mind blowing. Mark, this is a disgrace. How many failures within the NZX exchange alone had to occur in order for them to let their top man shill this in a public video?

[SailorRob]

So onto the second Crowdfunding round,

This time they raised, according to the NZX listing document (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/GFI/381334/357436.pdf) $2,883,000 gross or $2,673,334 net. This raise broke the Equitise record for the highest NZ crowdfunding raise and sucked in 1,268 individual ‘investors’. Remember this raise was based on a forecast 128,000% revenue increase in 3 years, gross margins 30% higher than Google and was actually to purchase a derelict Power station from themselves.

The 2021 audited financial statements for the year ended 31 March 2020 show $2,905,337 coming in from total share issues and $300,000 going out as share issue costs leaving net $2,605,337.

Looking further through the 2021 financial statements leaves me wondering how deep into this pestiferous quagmire I really want to wade, but let’s keep going for now.
The $2,605,337 came in the front door in November 2020 and by March 31st 2021 a mere 4 Months later, $2,067,403 had gone out to related parties.A small portion of this was in share based payments but the cash reconciliation shows that at the beginning of the year there was $991,937 and by year end only an increase of $305,117 but a net $2,605,337 had come in from investors. So $2,300,220 had gone out in hard cash and a bunch more in share based payments. Let’s dig in.
First of all we have the power station, $32,895 went out to renewable power in lease payments before the $700,000 in cash and the $50,000 in shares for a total of $782,895, this went to shareholder and former director Tim Johnson, shareholder Kevin Chong and we don’t know Casey's involvement, we just know he used to be involved.

Next John Hussey and his contractor payments this time of $260,069. What is he doing? Hussey has also landed another Greenfern contract, would you believe for $16,000 per Month as well as a 4% bonus on funds received from wholesale investors. This will show up in the next year.

Phillip Brown was given $250,000 worth of shares for ‘consulting services’ and this guy is actually now the chairman and owns nearly 4% of the company, from what I can gather he actually bought the shares which is in stark contrast to everyone else. I can’t be sure, a lot of filings to trawl through. If anyone knows please let me know as it’s pretty bizarre that anyone with any sense whatsoever would put a dime into this trainwreck but it looks like he has a history of selling companies to private equity.
A company called ‘Investment Research Group’ was given $80,000 worth of shares in exchange for consulting services. Guess who is the director and 80% owner of Investment Research Group? Brent King, one of the Greenfern Directors.

Next we have John Hussey stepping back up to receive anotherl quarter million ($260,000) in share based payments and not to be left out Casey grabbed $230,000. So just to be clear for those that aren’t familiar with these things, these two gave themselves a combined $490,000 worth of the company - the company at this stage being a shell that crowdfunders are pouring their money into. So in a slightly roundabout way they took a $490,000 share of the money put in by the ‘investors’.
They also decided to ‘pay a debt on behalf of a shareholder’ And then incurred legal fees in order to recover this money. All of which they assure us was recovered including the legal fees. I have never ever heard of any company in the world paying a debt for a shareholder. I would not find it difficult to believe that this ‘shareholder’ was in fact one of their mates.

At the end of the section disclosing all of this astounding and disgraceful conduct we are told that ‘All transactions with related parties were at arms length’
All of this stuff was disclosed in the 2021 financial statements and so only catches the cash going out to the insiders up until March 31 2021 which is a snapshot. From the NZX listing document (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/GFI/381334/357436.pdf) 31st October 2021 we can get some more detail.

The efforts so far to rip off unsuspecting Crowdfunding investors are just warming up at this point, let’s have a look at the plans from 2021 forward.

The Full Feathering of the Nest

In July 2021 Crooked Casey was lucky enough to be considered by himself for the Managing Directors job for the 5 years following the listing at the bargain basement salary of $155,000 per year that is fixed for the first 3 years and then will no doubt be looking for a lot lot more. Now check out the conditions he’s attached. Greenfern can sack him, but to do so they have to pay him $310,000 if this occurs within the first 3 years of his term and after the three years he’e entitled himself to get paid right through until the end of the 5 years no matter what. These conditions also apply if he is made redundant or if Greenfern is sold.

Now as luck would have it Mr John Hussey was also given a job at the same time as ‘Head of Growth’ (I have no idea if the pun was intended), another great bargain for $155,000 and carries the same provisions as above for Casey.

Well these two are sorted no matter what happens, but don’t worry their nest is not fully feathered yet!

The ‘Shadow Share Scheme’ another Million dollar hussle. Yes don’t worry it’s just as dodgy as it sounds, so the insiders had built in provisions to be able to grab more of the pie in the event of the company being listed or sold. Upon the listing being confirmed they got a further $933,500 worth of shares. John Hussey got $453,700 worth, Andrew Jeffery got $220,000 worth, Crooked Casey $148,800 and a few others some smaller amounts. Again to be clear the only thing this company has is the cash put in by the crowdfunding investors and then the ‘assets’ bought with that cash and now the insiders have taken another near $1 million worth.
Let’s take a look at the total amount of cash put into this ‘company’ up until 31 March 2022 and what has been claimed or taken out by the insiders.

Money In

2019 - $1,963,204 From collision Crowdfunding. Only $1,534,626 actually made it through to the company. $428,527 or 21.8% of the money was already gone. $200,000 of that was gone after being taken in by Greenfern.
2020 - $245,903 from investors with $17,391 in costs for issuing those shares or 7% of the total raised.
2021 - Crowdfunding raise $2,905,337 with $300,000 going out as associated costs.
2021 - Wholesale raise $2,155,400

So we have a cumulative total of $7,269,844 being put in by investors. Only $6,109,406 was left for the company.
Of the $6,109,406leftover after the costs of getting the money and listing on the NZX let's tally up how much the insiders have got their hands on so far.
If we look at the net assets from 31 March 2022 of $3,564,096 The insiders own collectively around 47% of the company having put nothing in themselves, this amounts to $1,675,000

Looking at cash based related party transactions there was $1,420,037 up to March 31st 2021. In 2022 there was $935,044 going out in cash to related parties and directors fees of $120,000. Casey and Hussey salaires amount to a further $310,000.
Another $1,1604,38 went to people associated with raising the money and listing on the NZX - A huge portion of the $414,000 that it cost for the NZX listing went to ‘The Investment research Group’ owned by Greenfern Director Brent King.
So as of 31 March 2022 the insiders have got their hands on $4,460,081 of the original $7.2 million put in and another ≅ 1.2 million went out in fees for raising the money.

Not bad going and it’s worth noting that *some* of this money will be legitimate business transactions, it’s up to you to decide how much.
Now that we’re up to the end of the 2022 financial year it’s worth comparing the revenue generated against what was forecast in the crowdfunding document (https://equitise-v3.cdn.prismic.io/equitise-v3/32bdb512-3339-4c06-bbdb-4ca3d9301f04_GFI-InfoMemo-19Oct2020.pdf) of August of 2020. The forecast was $7,918,513, remember this is only 7 Months before the year being forecast began.
The actual revenue? Well… $213,354. So they only missed the forecast they made a mere 7 Months before the year began by 3,611%. Or another way to look at it would be that 2022 revenues were 97.3% below forecast.

The real swindle

It’s pretty obvious what comes next isn’t it. More ‘investors' money is needed! This is where the real scandal begins and what led me to get involved. After losing $2 million in 2022 and taking money out of the company for themselves as described above, they desperately needed more cash.

On the 7th September 2022 Greenfern announced on the NZX that they intended to open a ‘wholesale’ offer through the Equities platform and other private avenues. They were after $1.2 million and offered the shares at a 30% discount to the average share price over the last 30 days. Sounds like a deal. The Wholesale investors are supposed to be more sophisticated investors and high net worth individuals. Of the $1.2 million Greenfern were after, they raised a total of $64,374 or only 5.3% of the total they asked for, these wholesale investors paid 11.5c per share. The game was up, or at least to anyone who had half a clue about how this stuff works.
Fast running out of money, they turned to their own shareholders and through the NZX began a ‘rights issue’ to raise $5 million dollars. On the 30th September 2022 they issued the notice of the rights issue, the share price being around 12.5c at that time. The rights issue allowed any existing shareholder to purchase further shares for a price of 8 cents each or a discount of around 35% to what they were trading for on the day of the announcement and a 48% discount to the prior 30 day average share price as of the 27th September.

They wanted 5 million and they got $757,000 instead. They were rejected by their own shareholders for shares at a 35% discount to market prices.
So they were rejected by Wholesale investors, rejected by their own shareholders, and knowing this would be the case, they then went to Sharesies to target the most vulnerable and unsophisticated of retail investors.

Sharesies sent out the offer through their app to all of their clients, by email and pushed it through their website and Facebook page. They were paid a fee for distributing the offer through their platform and I imagine in addition they would have been paid a fee for every share sold in the issue as well. Now when you go to their page that was dedicated to the offer you get a ‘page not found’ message that includes ‘Aw, Gutted, We slipped up, thanks for your patience while we suss it out’ Probably the most accurate statement they have made regarding this abomination.

So through Sharesies they managed to get their hands on an additional $984,000 all of which was from ‘shortfall’ or in other words, not from their existing shareholders.
All told this is another $1.8 million raised to provide more feathers for their own nests but they are short by $3.2 million.
At this point the Chairman of the Board resigns - Brent King. Smart move. Remember he’s the owner of The Investment Research Group that has taken a lot of cash out of Greenfern as detailed above.

With this fresh injection of money in late 2022, the filings at the beginning of 2023 detail how the insiders start issuing themselves more shares which is in essence grabbing more of the money that the investors have just put in.

Also worth noting that in the Rights offer documentation they state that some of the cash is to be used in fitting out their ‘Phase 2’ plant. The one that was supposed to be completed by 31st Dec 2022.

So by the end of 2022 all they have achieved is massive losses, even bigger revenue misses and all they own is a decrepit old hydro station and a very small R&D phase one growing facility. As detailed above they have achieved far greater things for themselves.

As of the last update on 30th September 2022 they have lost a further $850,000 and the total net assets within the company are now $2,630,000. As there are around 110,000,000 shares now, that’s 2.4 cents per share. But remember that’s how they value the ‘assets’ in the company, the reality is they are worth far less.
This company is going bust, it’s just a matter of when. We’ve already seen the reluctance of ‘investors’ to stump up more cash and with the share price declining the game is up. The lower the share price goes the less money they can raise and they are a long way short already. The money is still flying out and nothing is coming in. At this stage there is usually some kind of announcement that will try to boost the shares and a final ditch effort to raise more money before taking all they can out before filing for bankruptcy.

[SailorRob]

Sorry if editing wasn't great, hard to paste in from original document and the some links wont work, I can sort them out if people want them.

[shareman]

It's a conjob

[ralph]

Sorry if editing wasn't great, hard to paste in from original document and the some links wont work, I can sort them out if people want them.
Bloody well researched Sailor Rob

[percy]

Sorry if editing wasn't great, hard to paste in from original document and the some links wont work, I can sort them out if people want them.

You did well..

[Fortunecookie]

Sorry if editing wasn't great, hard to paste in from original document and the some links wont work, I can sort them out if people want them.

Well done Sir.

I see can why you had concerns for another listed company. I also see another listed company as well with links. Geez scary stuff.

You make an excellent point, do DD and don't believe the hype.

[SailorRob]

Cheers guys, appreciate the feedback.

It is really sad that this stuff is happening, particularly the shilling by Sharesies. They pushed out the glossy info through their platform and a bubbly young friend of mine who is super keen on getting into investing, was telling me about her investment in Greenfern with passion and hope for an amazing outcome.

The result of these situations just means more people disengaged with the capital markets and skeptical of the whole system.

[ValueNZ]

Cheers guys, appreciate the feedback.

It is really sad that this stuff is happening, particularly the shilling by Sharesies. They pushed out the glossy info through their platform and a bubbly young friend of mine who is super keen on getting into investing, was telling me about her investment in Greenfern with passion and hope for an amazing outcome.

The result of these situations just means more people disengaged with the capital markets and skeptical of the whole system.
I enjoyed reading your post, it is excellently researched. I tried giving you reputation for it but for whatever reason the site wouldn't let me. I remember receiving a couple emails from Sharesies about Greenfern and seeing popups on the website, which I didn't give much thought at the time.

I hope you were able to convince your friend to sell her shares in Greenfern before she lost too much money.

[SailorRob]

I enjoyed reading your post, it is excellently researched. I tried giving you reputation for it but for whatever reason the site wouldn't let me. I remember receiving a couple emails from Sharesies about Greenfern and seeing popups on the website, which I didn't give much thought at the time.

I hope you were able to convince your friend to sell her shares in Greenfern before she lost too much money.


Cheers, yes she actually made a little money...

But thinking through how she made money, it would have been by selling to another person like herself. Zero sum game, where people are all just making money off other people with the insiders taking most of it.

Unlike a company creating a product or service that creates real new value to the economy and many people can benefit without it being at the expense of others.

[Cottagestyles]

Quite the research and write-up! Great effort.
All of it feels so depressingly predatory, yet somehow "legal"... vehicles created to feed on each other, all the while sucking in the unwary.

[shareman]

While reading through this please remember that when this company was desperately seeking money after having taken so much money out for themselves and the conventional route failed, it was pushed on Sharesies’ clients via their app, email list, website and Facebook page. Sharesies say that their aim is to democratise investing and before we were graced with their presence, they say that ‘investing was too hard, too complex, and too damned scary for too many’ They are supposed to champion the rights of the small retail investor and state ‘Our investing experience works towards giving people the confidence and control to invest. We believe that by giving someone the opportunity to invest—while supporting them to learn—we’ll create a community of financially empowered people’ The reality is that they at a minimum have broken their fiduciary obligation to their clients and are complicit in what ultimately could be viewed as fraud - but you can judge for yourselves.


Yes, I think Sharesies absolutely betrayed small investors and were absolutely negligent on their part (at a minimum) to make money for themselves and I hate that company because they did this

[Cabinet]

Excellent read, thank you for posting.

[RTM]

Fascinating. Thanks. Pity it has not been picked up by the media.
Pleased I didn't pursue the GreenFern "opportunity"...declined without knowing all of this, that's for sure.

[percy]

https://www.nzx.com/announcements/380882

Due to commence trading on the NZX on Thursday 21st Oct 2021.

'Reference price' $0.25

Disc: not interested

Posted 13-10-2021.
You were right not to be interested.
I must have read your post and flagged it too.
Pity others did not know your excellent investment reputation.

[SailorRob]

Fascinating. Thanks. Pity it has not been picked up by the media.
Pleased I didn't pursue the GreenFern "opportunity"...declined without knowing all of this, that's for sure.


It has, there are loads of linked articles in the text to various media reports (that wont work from sharetrader) but the NBR did some great work as well (paywalled)

Basically it was picked up by the media in small pieces in real time, but the big picture in one story as I have tried to put together, that's not in the media.

Nor is Sharsies shilling to unsuspecting bright eyed young retail.

It would make a great expose for a story, I will send it out to a few outlets and see if they can do something. Good thing is it's all easy to source information from public documents.

Imagine what some experienced investigative journo with contacts could pull up!

[GTM 3442]

Out of idle curiosity, who were the auditors? The same firm all the way through the saga?

[blackcap]

Out of idle curiosity, who were the auditors? The same firm all the way through the saga?

Crowe were the auditors last year.

[Airw0lf]

It has, there are loads of linked articles in the text to various media reports (that wont work from sharetrader) but the NBR did some great work as well (paywalled)Basically it was picked up by the media in small pieces in real time, but the big picture in one story as I have tried to put together, that's not in the media.Nor is Sharsies shilling to unsuspecting bright eyed young retail. It would make a great expose for a story, I will send it out to a few outlets and see if they can do something. Good thing is it's all easy to source information from public documents.Imagine what some experienced investigative journo with contacts could pull up!Thanks for all your hard work. I saw bits and bobs about the various crowdfunding rounds and smelled a rat and stayed away. I never thought the rort was this disgusting.

[SailorRob]

Thanks for all your hard work. I saw bits and bobs about the various crowdfunding rounds and smelled a rat and stayed away. I never thought the rort was this disgusting.


Cheers, appreciate it.

Regarding the auditors, I guess nothing they (Greenfern) were doing was illegal or breaching accounting rules (apart from not disclosing the related party transactions). Just massively immoral.

No auditor worth their salt would be involved in this though as it would be obvious to them what was going on.

[Dlownz]

They probably need more cash.
Wait a month or two. Then there will be a cap raise for 15cents. Feel sorry for the people that Brought in on this so early

Forgot I wrote this back in October 2021
Thought I'd go back and read earlier comments on this and saw myself 😂😂

[SailorRob]

Forgot I wrote this back in October 2021
Thought I'd go back and read earlier comments on this and saw myself 😂😂


You were onto them early!

[Airw0lf]

Cheers, appreciate it.Regarding the auditors, I guess nothing they (Greenfern) were doing was illegal or breaching accounting rules (apart from not disclosing the related party transactions). Just massively immoral. No auditor worth their salt would be involved in this though as it would be obvious to them what was going on.I am far from an accountant but I am the Chair of a tiny not for profit and our auditors ask us every year "Did you have any related party transactions - if so, what were they and please explain." I assume they also look at our accounts for evidence of undeclared related party transactions. My understanding was that if there were related party transactions then at a minimum the auditors would want that made explicit in the accounting notes so that the Charities Commission and whoever else cared to look would know. If the transactions seemed really material and/or inappropriate they would presumably refuse to sign off? Based on my experience it seems the auditors weren't doing their jobs with Greenfern...

[SailorRob]

I am far from an accountant but I am the Chair of a tiny not for profit and our auditors ask us every year "Did you have any related party transactions - if so, what were they and please explain." I assume they also look at our accounts for evidence of undeclared related party transactions. My understanding was that if there were related party transactions then at a minimum the auditors would want that made explicit in the accounting notes so that the Charities Commission and whoever else cared to look would know. If the transactions seemed really material and/or inappropriate they would presumably refuse to sign off? Based on my experience it seems the auditors weren't doing their jobs with Greenfern...


Great point, not my area of expertise but what you have highlighted makes sense.

So both Greenfern and the Auditors were complicit in fraudulent behavior.

[Airw0lf]

Great point, not my area of expertise but what you have highlighted makes sense.So both Greenfern and the Auditors were complicit in fraudulent behavior.The ability for auditors to miss blindingly obvious fraud never ceases to amaze me - FTX, Wirecard, Enron to name a few famous cases.

[Dlownz]

You were onto them early!
I read your whole breakdown of greanfern last night and it's incredible how bad all of this is. I never could have comprehended how bad it actually was.
Well done with all the work that went into that.

[shareman]

Sharesies and the NZX are as involved as well, they should be held to account

[SailorRob]

Sharesies and the NZX are as involved as well, they should be held to account


I agree and I want to do something about it but unsure what. Really needs a media story.

[justakiwi]

Maybe talk to the FMA? Would this not be the kind of thing they would look into?


I agree and I want to do something about it but unsure what. Really needs a media story.

[SailorRob]

Maybe talk to the FMA? Would this not be the kind of thing they would look into?


They have already investigated them, perhaps more than once. This was mainly around related party disclosures.

Trouble is that most of the things I have highlighted are not illegal...

[blackcap]

They have already investigated them, perhaps more than once. This was mainly around related party disclosures.

Trouble is that most of the things I have highlighted are not illegal...

So really it is not a fraud in the strictest sense of the word.

As much as I have sympathy with your position an old phrase from my high school economics teacher comes to mind. Caveat Emptor.
Another phrase is "A fool and his money are easily parted".

I know sharesies et al have been spruiking Greenfern, however it remains the duty of the investor to do their due diligence. If you get talked into investing into something and it goes tits up, fool you once. Hopefully lesson learnt.

(p.s) to add, I am not saying the decisions and methods are in any way ethical or above board or something to be aspired to. Just that people need to do their research. Like you managed to get all the info, it was all there to read and see. Nothing was hidden. Disclosure was good.

The other company I think is in this boat is NZL. Great disclosure, but I feel the company was set up for the benefit of the manager more than the shareholders. Nothing illegal there, in fact, they have pretty good governance. Just need to have done your homework and know what the deal is before getting involved.

[Airw0lf]

I agree and I want to do something about it but unsure what. Really needs a media story.NZSA I reckon - they should be up for protecting investors from dodgy directors and management. They may also be able to bend the ear of media, FMA, etc.

[SailorRob]

So really it is not a fraud in the strictest sense of the word.

As much as I have sympathy with your position an old phrase from my high school economics teacher comes to mind. Caveat Emptor.
Another phrase is "A fool and his money are easily parted".

I know sharesies et al have been spruiking Greenfern, however it remains the duty of the investor to do their due diligence. If you get talked into investing into something and it goes tits up, fool you once. Hopefully lesson learnt.

(p.s) to add, I am not saying the decisions and methods are in any way ethical or above board or something to be aspired to. Just that people need to do their research. Like you managed to get all the info, it was all there to read and see. Nothing was hidden. Disclosure was good.

The other company I think is in this boat is NZL. Great disclosure, but I feel the company was set up for the benefit of the manager more than the shareholders. Nothing illegal there, in fact, they have pretty good governance. Just need to have done your homework and know what the deal is before getting involved.


It's funny you say that, as the title of my report was 'Caveat Emptor' I took it out when I posted here.

Yes you are quite right with what you say, but the non disclosure of the related party transaction was fraudulent and was investigated at the time.

The revenue forecasts were pretty close too but nowhere near as black and white as the non disclosure.

[GTM 3442]

I appreciate all the time and effort that's gone into this, I really do. It's a great read, and a good piece of work to pull it all together. Well done.

However - and it's a big however, I am disappointed to read it here, and not in the New Zealand business and/or financial media.

[SailorRob]

I appreciate all the time and effort that's gone into this, I really do. It's a great read, and a good piece of work to pull it all together. Well done.

However - and it's a big however, I am disappointed to read it here, and not in the New Zealand business and/or financial media.

Thanks. To be fair there was a lot of reporting on it, specially by the National Business Review, lots of linked articles there, but the links won't work and some are pay walled.

Also some articles on the whole industry and how shady it is...

But they all pulled their punches and didn't report on the whole affair, just on individual bits as they transpired...

[RTM]

Yes..it’s the complete story (to date) as you have laid out that makes it a lot more interesting, rather than a bit here and there separated by time that one then has to recall and piece together.

SailorRob, with respect to fraudulence, one of the bits that interested me initially was the “free/cheap power” from their own power station. Was laid out in an email I received. Did they ever disclose to the market that this was never achieved ? If not, could this not also be a major issue ?


Thanks. To be fair there was a lot of reporting on it, specially by the National Business Review, lots of linked articles there, but the links won't work and some are pay walled.

Also some articles on the whole industry and how shady it is...

But they all pulled their punches and didn't report on the whole affair, just on individual bits as they transpired...

[shareman]

I appreciate all the time and effort that's gone into this, I really do. It's a great read, and a good piece of work to pull it all together. Well done.

However - and it's a big however, I am disappointed to read it here, and not in the New Zealand business and/or financial media.

I know, I was thinking the same, Brian Gaynor used to do these sorts of stories but he has sadly died.

NZ financial media just do not have the strength of days of old

[shareman]

John Hussey was the mastermind behind Greenfern (just your atypical narcissistic psychopath) and he positioned himself to benefit the most from things like the IPO, and he scarpered like a rat earlier this year by resiging when he realised there was no more easy money to be made from Greenfern

[shareman]

There's a shareholder activist group called Greenfern Watch who may take legal action against Directors and Management on behalf of shareholders, their email is: greenfernwatch@yahoo.com

[SailorRob]

There's a shareholder activist group called Greenfern Watch who may take legal action against Directors and Management on behalf of shareholders, their email is: greenfernwatch@yahoo.com


Yeah I mentioned that in the report. It's actually one of the former directors, Tim Johnson.

Article about it here https://www.newsroom.co.nz/a-lack-of-love-and-peace-in-the-cannabis-biz

[shareman]

It gets better SailorRob:

Greenferns investment in Sustainable Foods is going broke:

https://www.newsroom.co.nz/taxpayer-loan-at-heightened-risk-in-rosa-foods-collapse

Honestly, Greenfern come across as if they're trying to lose money, they couldn't cock it up better if they tried

[SailorRob]

It gets better SailorRob:

Greenferns investment in Sustainable Foods is going broke:

https://www.newsroom.co.nz/taxpayer-loan-at-heightened-risk-in-rosa-foods-collapse

Honestly, Greenfern come across as if they're trying to lose money, they couldn't cock it up better if they tried


The company yes, but the insiders are making money hand over fist!

The entire thing is created for them to enrich themselves.

Only a matter of time before it blows up.

[ValueNZ]

The company yes, but the insiders are making money hand over fist!

The entire thing is created for them to enrich themselves.

Only a matter of time before it blows up.
Do you have a short position?

[SailorRob]

Do you have a short position?


No, and that is a question I always ask anyone who states categorically that a share price is going to go down.

I am very confident that this thing will blow up but I am not confident in the course it will take and if I took a short position it could be me that blows up first.

I have never shorted anything in my life and don't intend to start. I'm not sure how anyone even could do it with this small company in NZ and not sure the borrow cost or mechanism etc.

Now if someone offered to lend me their shares at say 7% for 5 years and I wasn't subject to margin and could pay back their shares anytime then I would do it.

I know of so many formerly great investors who have blown themselves up trying to short and many more who have been unsuccessful that it hold no appeal to me, one of Einhorn's recent letters highlighting their short struggles over the last few years is key reading. The best in the world with massive resources still can't make money.

Look at the Gamestop saga... Shorting is a lot about Ego as well and SailorRob on Sharetrader has a lot of Ego, but when it comes to investing he has none at all. As that is what will kill you.

So if you take a short position in Greenfern and they announce a new contract and strategic offshore investor or any manner of other things that could happen and suddenly you are up for potentially unlimited losses. Over time I would have full confidence I am right but over the short term I could blow up.

As Buffett constantly hammers home, you have to be able to handle the events that have never happened before or the 1/100 year events with ease and stay in the game.

I will never expose myself to potentially unlimited losses and while the chances are so remote it's virtually impossible, technically Greenfern can go to $1 a share or more overnight.

A great case study is to look at what happened to Daniel Gladis in the GFC and how it happened.

[shareman]

And another thing SailorRob, NZME will not be interested in your story, it's cos Greenfern is a customer of theirs, I've already tried

[ValueNZ]

No, and that is a question I always ask anyone who states categorically that a share price is going to go down.

I am very confident that this thing will blow up but I am not confident in the course it will take and if I took a short position it could be me that blows up first.

I have never shorted anything in my life and don't intend to start. I'm not sure how anyone even could do it with this small company in NZ and not sure the borrow cost or mechanism etc.

Now if someone offered to lend me their shares at say 7% for 5 years and I wasn't subject to margin and could pay back their shares anytime then I would do it.

I know of so many formerly great investors who have blown themselves up trying to short and many more who have been unsuccessful that it hold no appeal to me, one of Einhorn's recent letters highlighting their short struggles over the last few years is key reading. The best in the world with massive resources still can't make money.

Look at the Gamestop saga... Shorting is a lot about Ego as well and SailorRob on Sharetrader has a lot of Ego, but when it comes to investing he has none at all. As that is what will kill you.

So if you take a short position in Greenfern and they announce a new contract and strategic offshore investor or any manner of other things that could happen and suddenly you are up for potentially unlimited losses. Over time I would have full confidence I am right but over the short term I could blow up.

As Buffett constantly hammers home, you have to be able to handle the events that have never happened before or the 1/100 year events with ease and stay in the game.

I will never expose myself to potentially unlimited losses and while the chances are so remote it's virtually impossible, technically Greenfern can go to $1 a share or more overnight.

A great case study is to look at what happened to Daniel Gladis in the GFC and how it happened.
Thanks, I knew this was quite likely to be your answer. I feel similarly about shorting and option contracts in general. What happened with Gamestop was certainly crazy and even today it trades 24x higher than it did in 2020.

I'll take a look into what happened to Daniel Gladis during the GFC since I'm unaware of what happened there.

[shareman]

And another one SailorRob, Greenfern has this division called "GFI Thailand", basically one of the managers just went on a piss trip to Thailand to see his mate (paid for by shareholders of course)!

They blamed a halt of progress on the NZ Govt, whatever happened to the Thailand division ! Like most things with Greenfern, tumbleweed,

Greenfern is littered with stories like this

[Airw0lf]

No, and that is a question I always ask anyone who states categorically that a share price is going to go down.I am very confident that this thing will blow up but I am not confident in the course it will take and if I took a short position it could be me that blows up first. I have never shorted anything in my life and don't intend to start. I'm not sure how anyone even could do it with this small company in NZ and not sure the borrow cost or mechanism etc.Now if someone offered to lend me their shares at say 7% for 5 years and I wasn't subject to margin and could pay back their shares anytime then I would do it.I know of so many formerly great investors who have blown themselves up trying to short and many more who have been unsuccessful that it hold no appeal to me, one of Einhorn's recent letters highlighting their short struggles over the last few years is key reading. The best in the world with massive resources still can't make money.Look at the Gamestop saga... Shorting is a lot about Ego as well and SailorRob on Sharetrader has a lot of Ego, but when it comes to investing he has none at all. As that is what will kill you. So if you take a short position in Greenfern and they announce a new contract and strategic offshore investor or any manner of other things that could happen and suddenly you are up for potentially unlimited losses. Over time I would have full confidence I am right but over the short term I could blow up.As Buffett constantly hammers home, you have to be able to handle the events that have never happened before or the 1/100 year events with ease and stay in the game.I will never expose myself to potentially unlimited losses and while the chances are so remote it's virtually impossible, technically Greenfern can go to $1 a share or more overnight.A great case study is to look at what happened to Daniel Gladis in the GFC and how it happened.Another case study is Herbalife - it's basically a terrible pyramid scheme and Pershing Square took a massive short position against it and provided a lot of evidence as to how Herbalife was a pyramid scheme. They expected regulators to rub out the company. Instead they just settled in cash and kept on going. Share price kept going up.

[SailorRob]

Another case study is Herbalife - it's basically a terrible pyramid scheme and Pershing Square took a massive short position against it and provided a lot of evidence as to how Herbalife was a pyramid scheme. They expected regulators to rub out the company. Instead they just settled in cash and kept on going. Share price kept going up.


Exactly and only today I was listening to Drukenmiller, he's never had a down year in 30 years and is truly a world class legend. Said he thinks he may have lost money shorting in total.

[Baa_Baa]

Exactly and only today I was listening to Drukenmiller, he's never had a down year in 30 years and is truly a world class legend. Said he thinks he may have lost money shorting in total.

He's certainly a legend but, do you think it's actually a question that he "may have lost money"? Surely he would know, being a legend. Legends know when they make or lose money, so for sure, he lost on some of his short bets.

This stuff is for traders, only focused on market sentiment, it works when it does, and doesn't work when it goes bad. Your stops get hit or a margin call comes in, boom, your trade is defunct, same as going long a trade. This is not 'investing', it is trading, which is a whole different thing, and shorting is not very familiar to NZ traders as placing a short is not easy, or readily accessible.

Shorting companies shares though, can be very profitable and adds to market liquidity, but it's understandable that many don't 'get it' or want to take the risk of a short trade, especially on leverage, but bascially it's just betting on the bear side of an investment rather than the bull side.

It has nothing to do with investing, it's just playing the market.

[SailorRob]

He's certainly a legend but, do you think it's actually a question that he "may have lost money"? Surely he would know, being a legend. Legends know when they make or lose money, so for sure, he lost on some of his short bets.

This stuff is for traders, only focused on market sentiment, it works when it does, and doesn't work when it goes bad. Your stops get hit or a margin call comes in, boom, your trade is defunct, same as going long a trade. This is not 'investing', it is trading, which is a whole different thing, and shorting is not very familiar to NZ traders as placing a short is not easy, or readily accessible.

Shorting companies shares though, can be very profitable and adds to market liquidity, but it's understandable that many don't 'get it' or want to take the risk of a short trade, especially on leverage, but bascially it's just betting on the bear side of an investment rather than the bull side.

It has nothing to do with investing, it's just playing the market.


Yeah, I believe the intent of what he said as he always seems honest about when he loses (same convo talked about blowing up billions in 3 weeks in dotcom)

And one of few who says he doesn't know whats going to happen, always points out when he was wrong etc..

So I put it down to him knowing his exact returns yes, but maybe not each year exactly what they were made up of and so in aggregate gun to his head he cant say if he's net made or lost shorting.

He absolutely has lost on some of them, he said so, but what he meant is that he's lost overall (over 30 years).

[shareman]

When assessing Greenfern, these are the most important numbers, net operating cashflow:

2019 ($74,000)
2020 ($350,000)
2021 ($1,020,000)
2022 ($2,078,193)
2023 ($1,379,698)

So every year they lose shareholders cash and are actually getting better at it, Greenfern is a shocker

[winner69]

When assessing Greenfern, these are the most important numbers, net operating cashflow:

2019 ($74,000)
2020 ($350,000)
2021 ($1,020,000)
2022 ($2,078,193)
2023 ($1,379,698)

So every year they lose shareholders cash and are actually getting better at it, Greenfern is a shocker

And spend just as much again on capex (investments)

[winner69]

I note they use Bartercard …….how cute

[Dlownz]

I saw a post come up on the sharesies site about greenfern. Someone calling sharesies out for promoting a scam. It was gone the next day 🤔

[SailorRob]

I saw a post come up on the sharesies site about greenfern. Someone calling sharesies out for promoting a scam. It was gone the next day 🤔

Was that on their Facebook account?

[shareman]

I saw it too, I think Sharesies took it down, it was on their facebook site

[Dlownz]

Was that on their Facebook account?
Yeah
Was it you 😂

[SailorRob]

Yeah
Was it you 😂

No, but I will do something more formal once I get off the water. Been gone a Month...

[shareman]

SailorRob, your prediction of an implosion is becoming reality,

As I say, lurching from one disaster to the next

Restated accounts and director resignations yesterday:

"GFI advises that since the release of its unaudited full year results to 31
March 2023 on 30 May 2023, in the course of the audit process it received a
suggestion from its Auditors that it reconsider the accounting treatment of
payments and receipts in relation to its contract with Cannvalate Pty Ltd.
This relates to a change in GFI's application of the agent/principal
judgement policies under NZIFRS 15.

This change will have a material impact on the revenue results as previously
announced. However there is no material change in the overall result for the year."

[shareman]

Here is the reply from the NZXs Head of Market Conduct after I raised concerns about the retrospective accounts:

"Thank you for your email.



I have reviewed the announcement that you have referred to. By way of background, I note that a change of accounting policy does not trigger an express reporting requirement under the NZX Listing Rules, and the apparent effect of the changed policy does not appear to have had a material effect on GFI’s restated earnings for the year ended 31 March 2022 or the unaudited results for the year ended 31 March 2023.



On this basis it does not appear that there is an issue under the NZX Listing Rules to take forward, but we thank you for bringing this matter to our attention."

The NZX is a part of this fraud

[SailorRob]

Here is the reply from the NZXs Head of Market Conduct after I raised concerns about the retrospective accounts:

"Thank you for your email.



I have reviewed the announcement that you have referred to. By way of background, I note that a change of accounting policy does not trigger an express reporting requirement under the NZX Listing Rules, and the apparent effect of the changed policy does not appear to have had a material effect on GFI’s restated earnings for the year ended 31 March 2022 or the unaudited results for the year ended 31 March 2023.



On this basis it does not appear that there is an issue under the NZX Listing Rules to take forward, but we thank you for bringing this matter to our attention."

The NZX is a part of this fraud


Yeah that's nuts.

All these companies have is revenue and only a tiny bit at that. So a material change in revenue is a very big deal.

Of course it wont affect earnings when there are none.

Just watch the video of the NZX CEO shilling it and you will know all you need to know.

[shareman]

Yes SailorRob, as I suspected, the investment in Sustainable Foods has been written off:

"Shares - Sustainable Foods Limited
The Group owns 1.87% in Sustainable Foods Limited, an unlisted related party company. The GFI Management considered the
fair value of the underlying assets and liabilities of Sustainable Foods Limited and estimated that the fair value of the investment
diminished to $0 as at 31 March 2023"

They couldn't have stuffed it up better if they tried

[shareman]

One disaster to another, now the "power station" has broken down again:

https://announcements.nzx.com/detail/415533

[SailorRob]

One disaster to another:

https://announcements.nzx.com/detail/415533


I'm currently in discussion with a major Business publisher to expose them, hopefully will have something together soon.

[Sideshow Bob]

Here you go SR.....

https://www.nzx.com/announcements/416469

n its 24 July 2023 and 31 July 2023 updates, GFI noted the position regarding its hydro power station and the proposed upgrade to that facility.

GFI now advise that while negotiations with Vortex Group are ongoing, the window of opportunity to complete the upgrade work during summer 23/24 is closing. It is now likely that on-site work would not be able to be commenced until summer 24/25.

As a result of this, GFI have commenced repairs to the existing equipment and have been advised by its electrical contractors that these should be completed before the end of August. GFI will update the market when the facility is returned to operational status.

GFI remains hopeful that the final contract for completion of the upgrade work will be finalised this financial year.
ENDS

[shareman]

One disaster to the next, Greenfern is simply a stupid company run by stupid people

[shareman]

One disaster to the next.......

https://announcements.nzx.com/detail/417623

[shareman]

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[shareman]

One disaster to the next:

https://announcements.nzx.com/detail/422133