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We are beginning to move into a new era: The Post-Pandemic Era.
There are naysayers and worry warts everywhere because it has paid to be a pessimist over the past 16 months. But the market for pessimism is drying up at a rapid pace in 2021 as we see best-case-scenario data paths for vaccinations, vaccine efficacy, hospitalization rates, and fiscal support.
All of those factors have pushed the BofA Fund Manager Survey to an all-time high for economic expectations for the months ahead as the service economy begins to reopen in earnest.
For many small and mid-sized businesses that depend on foot traffic and a gathering of people in volume in indoor public spaces, this is extremely hopeful. Consumers have savings and are ready to unleash an historic wave of pent-up demand having fun out-and-about in their local markets.
One company positioned about as well as any for this coming rush of demand is Amfil Technologies, Inc. (OTCMKTS:FUNN). The company has operations in the entertainment/restaurant space, the cannabis space, and the landscaping space. However, according to a recent shareholder letter, the landscaping subsidiary is a long-term spin-off target, so the real strategic direction is a diversified model with operations in the entertainment/restaurant space and the cannabis dispensary market.
Of these two, the company’s main asset is its family fun board-game-themed café business operating under the brand, “Snakes and Lattes” – which is a play on words from the legendary classic game, Snakes and Ladders. You may have known it as Chutes and Ladders as a kid in the US, but it is far more established around the world as Snakes and Ladders.
Any way you slice it, the market for table-top gaming had been roaring as a very healthy, trendy niche market up until the Covid-19 pandemic health crisis. However, an entertainment restaurant and bar filled with happy people crowded over board games is a concept incompatible with a pandemic.
With the advent of the reopening phase over coming weeks and months, FUNN may be a perfect stock to have on the radar.
We would also note that FUNN shares were 8x more valuable 4 years ago. The company has seen a 10x growth in revenues with limited shifts in share structure in the meantime (ahead of the pandemic), suggesting there’s a relatively easy operational value argument to make here as well as the big near-term growth story described above.
Symbol: FUNN
Company: Amfil Technologies, Inc.
Quote: http://finance.yahoo.com/q?s=FUNN
Latest News: http://finance.yahoo.com/q/h?s=FUNN+Headlines
Company Website: www.amfiltech.com
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Who is FUNN
Amfil Technologies, Inc. (OTCMKTS:FUNN) engages in the acquisition and creation of income generating private companies and optimizing operations under the Amfil Technologies umbrella. It also seeks to achieve long-term financial returns consisting of regular dividend income, benefiting from preferential tax treatment, and expecting modest mid-to-long term capital growth. The company was founded on June 14, 1985 and is headquartered in Markham, Canada.
Amfil Technologies Inc. is the parent company to three wholly owned subsidiaries:
1) Snakes & Lagers Inc. holds the trade name and is the owner of Snakes & Lattes Inc. which currently operates 3 tabletop gaming bars and cafes located in Toronto, Ontario, 2 in Arizona (Tempe, Tucson) and 1 in Chicago, Illinois. The company is in the process of expanding throughout North America. Snakes & Lattes Inc. was the first board game bar and cafe in North America, is believed to be the largest in the world and has the largest circulating public library of board games in North America for customers to choose from. For more information on Snakes & Lattes Inc. feel free to visit the website at www.snakesandlattes.com.
2) FUNN Dispensaries, Inc. was incorporated as a Canadian Federal Corporation in January 2021. FUNN dispensaries is entering the Canadian cannabis dispensary market with its first dispensary expected to open by summer of 2021 and a goal of significant expansion throughout Canada.
3) Interloc-Kings Inc. is a hardscape construction company servicing the Greater Toronto Area. This subsidiary is an authorized Unilock installer. Unilock is North America’s premier manufacturer of concrete interlocking paving stones and segmental wall products. Interloc-Kings Inc. has an A+ Rating with the Better Business Bureau (BBB) and a 10/10 rating on homestars.com. Specializing in stone and wood installations between $5,000 and $150,000 per project, Interloc-Kings Inc. has become a top, high quality installation company of outdoor living areas in the GTA.
Catalysts
Snakes and Lattes. The most recent key catalyst was the opening of the company’s 6th Snakes and Lattes location.
CEO, Rogen K. Chhabra, visited Snakes & Lattes ‘Tucson’ the weekend before soft opening. Final preparations were made to get all systems and equipment ready and complete staff training.
The CEO visited again for the Grand Opening on Friday, April 30th, 2021.
“They have worked selflessly and tirelessly these past several months to make Snakes & Lattes Tucson not only a reality, but a showpiece for our brand. Our company is our people, and I am honored to lead such a dedicated staff,” said CEO Chhabra. “This 6th location marks a new milestone in our expansion efforts. It will be the tip of the iceberg for expansion as the world returns to normal post-pandemic times. We continue to learn with every new location, and work towards identifying, procuring, constructing, hiring and opening locations in a more efficient and less resource restricted process.”
Spin-off. Per the previous report: It was stated Amfil plans to spin off the Cannabis and Hardscaping sectors while Board Game Cafes and the board game manufacturing and distribution sectors stay together. Current strategy has altered this plan. The Snakes & Lattes brand has major synergistic opportunities with the new FUNN Dispensaries brand.
Interloc-Kings would be spun-off with all other subsidiaries and joint ventures. We have completed a review of a spin-off with legal counsel. At this time, the costs significantly outweigh the benefits. Once up-listed to the OTCQB and resources are available to allocate, the plan to execute will be revisited. Completion of a spin-off will absolutely remain on the roadmap to scale, it is simply a matter of priority at this time.
Audit/Uplist. Wipfli has been hired to audit FY19, FY20, and to review subsequent quarters for FY21 as necessary to apply for OTCQB uplist. Uplist can be processed by OTC Markets without an audit of FY21 so long as the FYE 2019 and FYE 2020 audits are completed and uplist applied for and approved before the end of September. The auditors have not yet provided a projected completion date. Our collective goal is to beat the FY21 deadline with the help of KSMB who is assisting as a liaison for submissions to Wipfli. Either way, FY21 will be immediately audited after FY19/20 along with all future years as required by OTCQB.
CEO extension. “My initial agreement to be CEO was through the end of FY21. Now that I have had an opportunity to examine the company in all aspects, I am even more invigorated about the potential for success; especially in the entertainment/restaurant and cannabis sectors. Accordingly, I have begun having productive discussions with the board of directors to extend my contract beyond FY21 in a manner that will benefit the company and shareholders the most. My intent is to ask for no cash and no new allocation of shares beyond the incentives for benchmarks that are already being accomplished.”
Dispensaries. On August 31, 2020, Tokin Dispensaries Inc. and David Berkovits entered into an assignment agreement with FUNN whereby Tokin assigned assets to FUNN. Tokin was and is a licensed cannabis retail operator in Ontario. Tokin initially secured a lease for one dispensary location at 10 Dunlop Drive, St. Catharines in the Greater Toronto area. All rights and responsibilities regarding that location were assigned to FUNN through the assignment agreement. FUNN also has space for a suitable location near one of the Snakes & Lattes venues in Toronto. Berkovits has additional locations to be considered, and has taken responsibility for obtaining dispensary licenses for FUNN in existing and future locations.
FUNN will own 100% of the dispensaries opened under the agreement subject to Canadian government approval for its dispensary operator’s license.
Berkovits will be paid a service fee for each location he provides assistance in: Securing funding, Securing location, Completing buildout, Obtaining necessary permits and licenses, Stocking location with product, Hiring and training staff, and Successfully opening.
FUNN Dispensaries, Inc. has been approved for incorporation in Canada. Federal Corporation Information – 1264130-5 – Online Filing Centre – Corporations Canada – Corporations – Innovation, Science and Economic Development Canada. Amfil Technologies Inc. owns 100% of this corporation.
FUNN Dispensaries, Inc. has begun the process of acquiring the necessary dispensary operator’s license.
FUNN Dispensaries, Inc. has signed an agreement with the landlord to immediately take over the lease for 10 Dunlop.
Bids have already been approved and contractors have been hired to build out the first location at 10 Dunlop.
Funds have been appropriated for FUNN Dispensaries, Inc. to complete the buildout.
Projected timeline to open the first location is approximately 3 months pending buildout and transfer of the operator’s license and location permit. A firm opening date will be announced at the appropriate time.
FUNN Dispensaries, Inc. and its parent company, Amfil Technologies Inc. (FUNN) will retain all profits from this initiative. Success of this new business model will add significant value to the company and to the benefit of Amfil (FUNN) shareholders.
Technical Analysis
As growth catalysts mount for FUNN and the macro context improves due to reopening tailwinds, shares of the stock appear to be potentially technically poised for further upside:
About FUNN
FUNN (Amfil Technologies Inc) engages in the acquisition of income generating private companies and optimizing operations under the Amfil Technologies umbrella. It also seeks to achieve long-term financial returns consisting of regular dividend income, benefiting from preferential tax treatment, and expecting modest mid-to-long term capital growth.
The company was founded on June 14, 1985 and is headquartered in Markham, Canada.
Key Points:
- FUNN has operations in the cannabis and entertainment/restaurant markets, where Reopening presents major tailwinds
- FUNN is making real money, with trailing revs already coming in at $3M.
- FUNN is also angling for a significant uplist of shares
- FUNN is coming off an RSI trough under 40, pointing to a massively oversold stock now heading back the other way.
- FUNN just recorded a MACD Bullish reversal, suggesting a technical change in trend.
Conclusion
The reopening theme is huge for certain sectors, with entertainment/restaurant names at the top of the list. FUNN can be thought of in the Dave and Busters ilk, with huge dormant revenue potential ready to be unlocked as people prepare to resume normal social activity in public spaces with family and friends.
The level of pent-up demand out there for this type of activity shouldn’t be underestimated.
We believe Snakes and Lattes has the potential to see explosive growth over coming months as a result. The fact that the company also has growing potential as a cannabis play gives this name powerful diversification in multiple growth markets.
We would also point out the potential synergies in the mix between these two models.
Technically, the stock appears potentially poised for big things ahead given its recent upside violation of the prior bear trendline. That normally carries implications. We also like the fact that the same trendline has already been successfully tested as key support.
Given the reopening theme in play across the market, FUNN is a potential mover in the making.
Recent Chart Activity
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FEATURED NEWS
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