[[tagnumber 0]][[tagnumber 1]]Lately we have seen quite a lot of volatility from Rainbow Coral Corp (OTCMKTS:RBCC)’s stock that has been going up and down the charts in increased volumes. After climbing above the $6 per share mark in the second half of last month we saw the ticker crash violently before embarking on another climb in mid–August.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Unfortunately, the upward run was halted at $2.5 per share and we saw [[tagnumber 6]]RBCC[[tagnumber 7]] crash down the charts once again. This was expected due to the overly inflated market cap of the company stock and the horrible numbers that we got to see in the financial report covering the second quarter of the year.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 11]] [[tagnumber 12]]cash: $2,740[[tagnumber 13]] [[tagnumber 12]]current assets: $4,524[[tagnumber 13]] [[tagnumber 12]]current liabilities: $517,798[[tagnumber 13]] [[tagnumber 12]]quarterly revenues: $27,683[[tagnumber 13]] [[tagnumber 12]]quarterly net loss: $136,929[[tagnumber 13]] [[tagnumber 22]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Despite the fact that the company kept on issuing fluff PR releases suggesting that the company is involved in the pharmaceutical industry, while its revenues are solely generated by an aquarium supplies retail store, we saw the ticker lose altitude very fast with the beginning of this week.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]After recording a 11.33% loss in Monday we saw [[tagnumber 6]]RBCC[[tagnumber 7]] drop a further 17.85% in yesterday’s session, closing at $1.47. A total of 154 thousand traded shares generated $253 thousand in daily dollar volume at those prices and the intense trading shows that more and more people were eager to get out before incurring further losses.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Today’s session is a bit more stable and [[tagnumber 6]]RBCC[[tagnumber 7]] has nested at the $1.60 per share mark, but the market cap remains quite big when you take the fundamentals of the company into account.[[tagnumber 2]]
[[tagnumber 0]][[tagnumber 1]]SolarWindow Technologies Inc (OTCMKTS:WNDW) made an impressive run earlier this month which led the ticker to impressive heights of around $3.80 per share. This was all in anticipation of a “webcast” that was supposed to show the company’s solar power–generating window technology in action.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]We aren’t certainly sure that the person who wrote the press release is aware of what a webcast is, but that is certainly something that investors didn’t get. Instead of an “Internet broadcast of a live event” we got a 2:40 minute video full of generic images, soothing music and some solar panels that were generating electricity for a couple of LED lights.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]The result was a 40% drop in the company stock value over the course of just 2 days and a massive volume that indicated a lot of people were trying to minimize their losses. Meanwhile, the terrible financial results that were recorded for the quarterly period ended May 31, 2015 also contributed to the loss.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 13]] [[tagnumber 14]]cash: $69 thousand[[tagnumber 15]] [[tagnumber 14]]current assets: $247 thousand[[tagnumber 15]] [[tagnumber 14]]current liabilities: $2.4 million[[tagnumber 15]] [[tagnumber 14]]revenues: ZERO[[tagnumber 15]] [[tagnumber 14]]net loss: $1.5 million[[tagnumber 15]] [[tagnumber 24]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]In the same time, the company stock was commanding a market value of more than $100 million, which is quite a lot when you look at these numbers. Still, it did manage to recover in the first sessions of this week, adding 14.35% and 10.27% in Monday’s and Tuesday’s sessions. The volumes decreased somewhat and the 352 thousand traded shares yesterday generated $988 thousand in daily trade value.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]The recovery, however, might be short–lived as we see that [[tagnumber 32]]WNDW[[tagnumber 33]] gapped down in today’s session and opened at $2.72 per share. The ticker is sitting 12.07% down from yesterday’s close at $2.55 as of the writing of this article, but there is the possibility that we can see it slide further due to the fact that even at the current market cap of $76 million [[tagnumber 32]]WNDW[[tagnumber 33]] is considered overvalued.[[tagnumber 2]]
[[tagnumber 0]][[tagnumber 1]]For the most part of the year Avra Inc (OTCMKTS:AVRN) has been hovering between the $0.30 and $0.40 per share mark with very small volumes. Lately, however, the illiquid stock has gained quite a lot of attention for all the wrong reasons.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]][[tagnumber 6]]AVRN[[tagnumber 7]] was the target of a paid promotion that managed to briefly push it above the $1 per share mark in the final session of last week. The pumpers used an interesting method this time. They went on promoting [[tagnumber 6]]AVRN[[tagnumber 7]] through WhatsApp, which created quite the backlash and the price quickly deflated, leading the company stock to a close of the week at $0.19.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Meanwhile, the company financials show that [[tagnumber 6]]AVRN[[tagnumber 7]] is in a dire situation. Here are just some of the numbers contained in their quarterly report for the period ended April 30, 2015.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 19]] [[tagnumber 20]]cash: $25 thousand[[tagnumber 21]] [[tagnumber 20]]current assets: $26 thousand[[tagnumber 21]] [[tagnumber 20]]current liabilities: $245 thousand[[tagnumber 21]] [[tagnumber 20]]revenues: ZERO (since inception)[[tagnumber 21]] [[tagnumber 20]]quarterly net loss: $118 thousand[[tagnumber 21]] [[tagnumber 30]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Still, despite all this, the paid promotion seems to be paying off. The volumes have significantly increased and we have seen [[tagnumber 6]]AVRN[[tagnumber 7]] close the past 4 sessions in the green. This week started quite well, with a 23.68% gain and we saw the ticker add another 14.89% to its value in yesterday’s session. The volumes have dropped since the start of the pump, however, and the 845 thousand shares that were traded yesterday generated $222 thousand in daily dollar volume.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Today we see the first signs of hesitation, as [[tagnumber 6]]AVRN[[tagnumber 7]] is 2.59% in the red as of the writing of this article. Considering the horrible financial situation of the company, the overly inflated market cap and the fact that the current run relied only on paid promoters we might see a serious correction, so be sure to do your due diligence and weigh out the risks before putting any money on the line.[[tagnumber 2]]
Is there anything that could even remotely suggest that Eco Depot Inc (OTCMKTS:ECDP) is a viable investment opportunity? This is the question we’re going to answer in the next few paragraphs. Straight away, we can point out that there are more daunting tasks out there.
Things start to look shady from the very moment you open the company’s profile on the OTC Markets and look at the address of ECDP‘s headquarters. Thanks to the magic of Google Maps, you’re just a couple of clicks away from seeing that it’s actually a residential house.
Google is also helpful when it comes to researching the background of the people in charge of ECDP. Once again, mere minutes worth of due diligence reveal that James Scheltema, the company CEO is also at the helm of Greenscape Laboratories Inc (OTCMKTS:MJLB), and he’s the legal council of Revenge Designs Inc (OTCMKTS:RVGD). Both of these companies have issued some pretty bombastic press releases in the past, but neither of them seems to be in a hurry to take Wall Street by storm.
Speaking of press releases, ECDP has also issued some positive announcements over the years. Unfortunately, once you check out the financial reports, you’ll see that they haven’t really had any effect on the company’s strength.
Here’s where doing research on ECDP requires a bit more effort. The company uses OTC’s alternative reporting standards and the management team have decided to upload their statements as unsearchable PDF files. Nevertheless, if you’re persistent enough, you’ll see that at the end of June, ECDP had:
- cash: $1,405
- total assets: $112,925
- total liabilities: $117,881
- NO revenue since inception
- quarterly net loss: $6,584
Clearly, the optimistic press releases from years gone by has materialized which is probably why, about nine months ago, the company simply decided to stop issuing them. The latest announcement was made on November 24, 2014 and we haven’t heard from ECDP ever since.
So, there you have it – there’s no news, the financial statement is a mess, and the company’s credibility is completely shattered by its headquarters and its CEO.
Despite this, people are jumping in. The ticker exited the dreaded triple-zero levels last week and yesterday, after logging a volume of nearly 40 million shares, it reached a close of over $0.002 per share for the first time in just over five months.
Finding the reason for ECDP‘s run is also a bit of a challenge. As we mentioned already, there are no news that could spark any sort of interest, there are no filings, and there are no promotional emails. That doesn’t mean, however, that there’s no promotion. The discussion boards, have been quite active over the last few days. Most of the people who post there don’t shy away from using emboldened capital letters and an excessive amount of exclamation marks in order to express their optimism about ECDP and its products which, as we established already, failed to generate any sort of revenues. Thanks to the hype and enthusiasm, about an hour into today’s session ECDP is another 28% up which goes to show that even more investors are jumping in.
Those investors should probably have another look at the latest financial report. Once they do, they’ll see that during the first six months of 2015, ECDP issued 117 million shares as a conversion of $40 thousand worth of debt. In other words, they’ll realize that one in every three ECDP shares that they’re buying has been issued at a rate of $0.00035 per share.
In yesterday’s market session Terra Tech Corp (OTCMKTS:TRTC) managed to put on 3.99% and climb up to $0.12 per share once more. The stock caught a nice little boost from a press release it put up in the morning hours.
Terra Tech informed shareholders that yet another bunch of California retailers now carry and sell IVXX products. This time it was seven new dispensaries and cannabis collectives that joined the growing list of locations where customers can buy IVXX.
The company put up many similar news updates in the past and their positive effect on the stock’s price ranged from very modest to none. This time it can be assumed that the green close was in part due to the news, because the other recent events over at TRTC have not been so rosy.
On Friday and Monday there came two separate Form 4 filings submitted by TRTC secretary and treasurer, Mrs. Amy Almeister, who is also the spouse of CEO Derek Peterson. Mrs. Almeister sold a total of 600,000 TRTC shares on the open market. Before the transactions she had 2.29 million TRTC shares and 1.84 million after them.
Insider selling is never a good thing, especially when an insider cashes out nearly a quarter of the common stock they hold. The market did not react too violently to the two Form 4 filings, with TRTC dropping 4% and 7% as the reports went up.
The latest IVXX-related PR informs that there has been a “significant increase” in the number of retailers who sell IVXX in Q3. This is indeed good news, as even though IVXX was introduced in a large number of dispensaries in Q2 as well, the total revenue generated by TRTC‘s cannabis division amounted to $432 thousand for the first six months of 2015.
Calissio Resources Group Inc. (OTCMKTS:CRGP) started yesterday’s session on a positive note, but quickly lost its edge, and then turned downright ugly at the end of the trading day.
Once more, enthusiasts flocked towards the ticker, empowered by CRGP‘s recent announcements, but this time nothing went their way. A wave of selling swept the ticker below its opening position mere minutes after the session’s opening, followed by a relative calm. Everything would have been fine if that had been the end of it, but the same thing happened once more at 15:24, and this time the ticker did not even have time to recover.
The result is that CRGP ended up losing a third of its market value over the span of half an hour of trading. How could such a thing happen?
Even just studying the company’s charts, a perceptive investor would have been hard pressed to admit that something is very wrong in CRGP‘s recent movements. The ticker’s jumps are decisive, but almost every time the company revs its engines, sooner or later it gets slapped with a wave of selling that crushes its momentum.
It is easy to discern the cause behind the investors’ excitement about CRGP stock. After all, the company is far from idle and looks more financially stable than most of its competitors on the OTC Markets. Additionally, it keeps pumping out announcements that claim that it is trying to fix its share structure situation.
However, things being as they are, there is no real way to know how bad said situation actually is. All we know is that as of June 30 CRGP reported having 130 million shares outstanding, between then and now it claims to have retired 158 million shares, and yet somehow it still manages to trade as many as 400 MILLION shares per day!
This hints at an appalling level of investor value-crushing dilution. Of course, there’s no real way to know whether or not said dilution is really happening and what its extent is, since the company does not seem inclined to shed light on the matter. However, this hypothesis certainly appears plausible, especially in light of the facts given above and CRGP‘s most recent movements.
Investors should really consider that distinct possibility and act accordingly.
For the past four sessions the stock of Cannabis Science Inc (OTCMKTS:CBIS) has been going nowhere but down. Yesterday it dropped by another 8.6% and closed at $0.0265. For now at least the ticker is still holding on to a significant portion of the gains it made during the August 18 and 19 sessions. For how much longer though?
The August 18 PR really got investors excited by announcing several encouraging things one of which was the company’s intention to finally, after four years of waiting, distribute the promised dividend to shareholders as of the record date of December 31, 2010. No matter what the company promises for the future the current state of CBIS is extremely depressing and the positive momentum disappeared completely after just two days.
Currently the company’s OTCMarkets profile page is marked with the OTC PINK limited information sign due to the still missing financial report for the second quarter of the year. The report was supposed to be filed by the middle of the month but CBIS received a 5-day extension through a notification of late filing. Well, that period ended on August 22 and as we said even now there is still no trace of the report. This turn of events shouldn’t have come as a surprise, after all the quarterly covering the first three months of 2015 was filed with a delay of over two months.
In addition the company is still trading at over-inflated prices that simply cannot be justified by their financials. At the end of March CBIS had:
• $37,524 cash
• $186 thousand total current assets
• $3.8 million total liabilities
• ZERO revenues
• $4.2 million net loss
The company finished 2014 with $1031 in revenues and a net loss of $16.8 million. But let’s move on to the continued dilution – for the first seven months of the year 250 million shares have seen saw the light of day. This brought the O/S count to 1.28 BILLION as of July 27. A significant portion of the newly issued shares came into existence as a settlement of debt at $0.001.
If this wasn’t enough you can check our past articles about the multiple equity compensation plans approved in 2015, a new Equity Award plan was registered on August 18, and the millions of shares that the directors of the company have received as bonuses.
Even if the stock bounces without showing some concrete results CBIS will remain an extremely dangerous choice. Any trades involving the ticker must be preceded by extensive research.
America Resources Exploration Inc. (OTCBB:AREN)’s volatility took it 15.26% down yesterday, pushing the ticker as low as the $0.76 mark before the final bell finally arrested its descent.
AREN has certainly seen a lot of action these last few sessions, the ticker bouncing up and down as opposing forces vie for dominance over its course on the charts.
On one hand, there’s a massed paid pump campaign that is still pushing the ticker forward and upward – and with each day, the pumpers find new and inventive ways to present the company in a favorable way. Every piece of positive news that they can get their hands on gets blown out of proportion, and even negatives are twisted and presented in a positive light.
The tout named “Breaking News: AREN hits almost $100m worth of oil in Utah” is a perfect example of the former, while the other one proclaiming “AREN down temporarily Time to buy!” is a perfect example of the latter. But, at the end of the day, that’s how paid pumps work.
Or how said paid pumps fail to work, judging by yesterday’s session showed. After all, it is a well known fact that even massed touting campaigns lose their efficacy over time, and that’s usually the moment when the company’s shortcomings catch up with it and cut its market cap down to size.
And AREN has a long list of shortcomings, any one of which is very capable of toppling it from its high perch. Like the fact that its latest financial report can be called mediocre at best, and that the only way it could have possibly paid for its most recent acquisitions is through the issuance of millions of shares of common stock, which may be dumped on the market at any given time, crashing the ticker in the process.
In short – AREN stock is still actively traded, however, opportunistic traders that wish to make money out of trading said stock had best be on their toes.
Lexaria Corp (OTCMKTS:LXRP) issued a press release on Monday and thus, it guaranteed itself an interesting start of the week. Investors (who, by the looks of things, had forgotten about the stock) traded around 550 thousand shares, or about four and a half times the 30-day average, and their pushed the ticker to a close of over $0.20 for the first time in more than two months.
Sadly, staying above this psychological barrier is proving to be a tall order. Yesterday, after an even more impressive volume of 600 thousand shares, LXRP dropped by about 11% and it closed the session with a price of $0.19 per share.
Clearly, investors aren’t so sure about LXRP. Let’s find out why.
The truth is, LXRP is just one of the many OTC companies that rode the wave of excitement last year and changed their business focus from the oil and gas industry to the medical cannabis business. We probably don’t need to tell you that most of these companies failed to make any sort of impact on the marijuana industry and they are now approached with caution by OTC investors.
Unlike the majority of its pot stock counterparts, LXRP actually managed to release some products and generate some revenues, but even so, the management team tend to do things in an interesting way sometimes. On August 12, for example, they announced the launch of some new ViPova products, but it wasn’t until Monday, a full two weeks later, that they told us that the products in question actually work.
The press release that sparked the sudden increase in volume talked about some laboratory tests that the ViPova teas have gone through. The results show that thanks to LXRP‘s technology, the CBD absorption rate is 499% greater than the baseline products.
While the news sounds good, it’s still way too early to say whether LXRP can really turn the ViPova CBD products into a household name. A point hammered home by the 10-Q for the period ended May 31:
- cash: $832,101
- current assets: $1,157,896
- current liabilities: $62,604
- quarterly revenues: $7,187
- quarterly net loss: $511,008
Indeed, the company is still in the process of launching its products and drawing conclusions from the first months of sales probably won’t be that fair. Then again, there can be no guarantees that the revenue figures will ever be greater than the ones you see above.
To top it all off, there seems to be some promotional activity around LXRP. Yesterday, for example, about twenty-four hours after the company released the aforementioned test results, an entity called Emerging Growth LLC republished the positive news and said that Lexaria could be a game changer in the cannabis industry. According to the disclaimer, over the last twelve months, Emerging Growth has received a total of $53 thousand from LXRP for investor awareness services.
We’re not sure if the stock needs the additional promotion. Especially in light of the volatility it’s demonstrating.
At the end of July the stock of TRUE DRINKS HOLDINGS (OTCMKTS:TRUU) had its highest close in quite a while of $0.28 per share. Since then, however, the chart performance of the ticker has been nothing short of disastrous as TRUU formed a prolonged downtrend that saw them sink to a close at less than 16 cents this Monday.
With the stock wiping such a huge portion of its value a bounce was definitely possible and indeed yesterday TRUU jumped upwards by nearly 12% and returned to $0.179. Is this a one-day spike though?
Well, last week TRUU submitted their financial report for the quarter ending June 30 and although it showed that their revenues are continuing to grow the balance sheet of the company remains rather bleak:
• $54,284 cash
• $4.2 million total current assets
• $7 million total current liabilities
• $2.08 million net sales
• $2.4 million net loss
As we said the revenues for the period were nearly three times bigger than the ones for the previous quarter and almost twice the amount for the same period last year. There is one huge problem though – in order to generate the $2.08 million in net sales TRUU incurred cost of goods sold of $2.14 million. This means that at the end of the quarter the company reported a gross loss of $58 thousand.
At the same time their cash reserves dwindled to critical levels. In order to remedy the situation TRUU decided to increase their authorized amount of Series C preferred convertible stock allowing them to sell more of the shares. As the August 18 8-K filing states TRUU plan to sell 17,648 shares of the Series C stock over the course of three separate closings the last of which will take place on September 15. The company expects to receive total proceed of around $2 million.
The issuance of more convertible preferred stock is something that investors must not underestimate. Exactly as we warned you in our previous article the resulting dulution fo the common stock has been massive – in a little over a month the outstanding shares of the company doubled from 53.7 million as of July 6 to 106.3 million as of August 13. With a lot more series C preferred shares and warrants outstanding the dilution could continue.
Even if you believe in the potential of TRUU’s AquaBall Naturally Flavored Water the red flags around the company remain far too serious to be taken lightly. Do extensive due diligence before putting any money on the line.