Pineapple Express Cannabis Company (PNXP) 10-K Review

In this in-depth review of Pineapple Express Cannabis Company’s (PNXP) fiscal year 2025 Form 10-K, we’ll examine their business model, financial performance, strategic moves, and risk factors. We’ll also assign an investment score on a scale of 1–10 and provide key takeaways for investors.

Warren.AI 💰 2.1 / 10

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1. Business Overview (Item 1)

Corporate History • Incorporated in Nevada in 2017 as Minaro Corp. and renamed Pineapple Express Cannabis Company in January 2023 after a share exchange with Pineapple Consolidated, Inc. (PCI).

Operating Model • Historically, PNXP’s principal asset was a 50% stake in PCI, a California-based cannabis retail operator. In January 2025, they sold that interest and recorded a small loss ($14,296).

New Strategic Focus • In March 2025, PNXP acquired a majority stake in GROOVY Company, Inc., a blockchain-based Platform as a Service (PaaS) for cannabis supply-chain transparency. Key features:

• NFT-based QR code authentication
• Geno-NFT genetic library for IP protection & royalties
• Provenance and lab result tracking
• Consumer mobile app with rewards
• Inventory/compliance integrations
• Data analytics marketplace

The move marks a pivot from operating dispensaries to offering compliance and anti-counterfeiting tech at the intersection of cannabis and Web3.

Locations • HQ in Atlanta, GA (leased through March 2026) and small operational office in Bogotá, Colombia.

Employees • No full-time employees; the CEO provides management services. Future hires depend on capital and revenue.

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2. Financial Analysis (Items 7, 7A & 8)

Revenue & Profitability • Minimal revenue of $16,168 in FY 2025, offset by $14,204 in bad-debt expense. Net loss reached $31,153 (vs. $59,497 loss in FY 2024). Accumulated deficit stands at $673,646.

Balance Sheet & Cash Flow • Cash on hand is virtually zero. Operating activities used $45,031 in cash. Financing from share issuances generated $45,001 in proceeds. They have a working-capital deficit ($2,079) and limited liquidity.

Capital Structure • 19.8 million common shares outstanding. No preferred shares issued as of January 31, 2025.

Going Concern • Management discloses substantial doubt about its ability to continue as a going concern. Plans include leveraging the GROOVY acquisition, raising equity or debt, and aligning expenses with revenue.

Tax Position • Net operating loss carryforwards of ~$390,000. Deferred tax assets fully reserved due to uncertainty of future profits.

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3. Risk Factors (Item 1A)

1. Regulatory Uncertainty: Cannabis remains Schedule I federally. Federal enforcement policy may change, exposing operators to crackdowns.
2. Industry Maturity: Still early-stage with few best practices. PNXP has no track record beyond the small PCI stake.
3. Liquidity & Funding: Very limited cash, no consistent revenue, and reliance on equity raises. High dilution risk.
4. Competitive & Pharma Pressure: Large incumbents and pharma lobbying could restrict cannabis growth.
5. Banking & Insurance: Difficulty accessing banking and insurance services due to federal prohibition.
6. Internal Controls: Material weaknesses in financial controls, lack of an audit committee, and IT disaster recovery gaps.
7. Tax Burden: Section 280E disallows ordinary business deductions for cannabis-related income, raising effective tax rates.
8. IP Protection: Federal patent/trademark remedies may be unavailable while cannabis remains federally illegal.

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4. Recent Transactions

Disposal of PCI Interest • January 31, 2025: Sold remaining 25% stake in PCI to then-CEO Feinstein for cancellation of a $3 million note. Resulted in a $14,296 loss.

Leadership Change • February 12, 2025: Feinstein resigns; Frank Yglesias appointed CEO, President, Director & Chairman.

Acquisition of GROOVY • March 5, 2025: Closed a share-exchange to become majority owner of GROOVY. Issued 5 million PNXP shares for 350 million GROOVY preferred. PNXP also assumed $3.68 million in GROOVY convertible notes.

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5. Investment Score: 2.1/10

Rationale:

• High regulatory risk: Federal illegality of cannabis persists.
• Weak financials: Minimal revenue, recurring losses, zero cash.
• Liquidity squeeze: No internal cash flow, heavy reliance on share issuances.
• Execution uncertainty: Pivot to blockchain tech in cannabis is unproven and competitive.

Positives:

• Entry into blockchain supply-chain compliance could capture niche demand.
• Low base valuation may attract speculative investors.

Verdict: Very high risk with limited near-term upside. Only aggressive risk-tolerant speculative buyers should consider a small position.

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6. Key Takeaways for Investors

1. Business Pivot • From direct retail to blockchain-based services. Success hinges on rapid adoption by cultivators, distributors, and regulators.

2. Cash Crunch • No runway. Must secure capital soon or scale operations to match zero cash inflows.

3. Regulatory Watch • Any shift in federal enforcement could derail partnerships or stall sales.

4. Watch GROOVY Integration • The acquisition could underpin a new licensing model or failed integration could sink the company.

5. Very Speculative • Only include PNXP in a tiny, high-risk slice of a diversified speculative portfolio.

Net Loss: $(31,153)

Investment Score: 2.1 /10

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Disclosure: This blog post is for informational purposes only and does not constitute financial advice. Always consult a licensed advisor.