Golden Grail Technology Corp (OTCMKTS:GOGY) Strikes Out
The people behind Stellar Media Group LLC received $21 thousand and shortly after the end of Tuesday’s session, they used Damn Good Penny Picks as well as the rest of their newsletters to tell their subscribers that if you invest in Golden Grail Technology Corp (OTCMKTS:GOGY), you could “double your money”. We’ll see whether the pump worked in a minute, but first, let’s check out what the promoters advertised.
GOGY has been around for a while and it has gone through a few business plans over the years. In the second half of 2014, the management team decided that their best bet will be to venture into the e-commerce industry and they set up a total of three online shops – one for selling commemorative jewelry, the second one dedicated to air fresheners, and the third one offering women’s swimwear. Sadly, this failed to get investors excited and despite several promotional campaigns during Q1 and Q2, the stock remained quite illiquid.
Truth be told, this isn’t much of a shock considering the disappointing results GOGY recorded during the first three months of 2015. Here’s a brief run-down of the figures:
- total assets: $11,191 in cash
- current liabilities: $956,724
- quarterly revenues: $29,336
- quarterly net loss: $259,913
It must be said that the results, as underwhelming as they are, seem to be improving. GOGY registered a significant jump in revenues during Q1 and they recently informed us that they have set record sales during the month of May. Yesterday, several hours after the pumpers sent out their alerts, the management team announced that in addition to their custom designed rings and charms, their commemorative jewelry website will soon offer pendants for police and fire departments throughout the country.
Sadly, neither the good news, nor the pumpers seem to be able to convince investors that putting your money on the line is worth the risk. Rather surprisingly, Damn Good Penny Picks actually turned out to be right and during the first few minutes of yesterday’s session, GOGY surged in the right direction. At one point, it managed to reach $0.11 per share which means that a few lucky investors actually had the chance to double their money. The peak didn’t last, though, and GOGY soon found itself falling towards the ground. The closing bell stopped it at $0.05 – exactly the same price as the one recorded at the end of Tuesday’s session.
Obviously, the ticker experienced some pressure after the initial surge, and we, as well as the people who lost money during the drop, can do little more than speculate on the reason. It should be noted, however, that a closer look into the financial statement could reveal a prime suspect.
GOGY issued its first convertible note way back in 2013. It was purchased by IBC Funds LLC and it was initially convertible at $0.10 per share, but when the company failed to repay the note on time, the terms were amended which means that IBC can now turn the debt into stock at a 50% discount to the market price. During Q4 of 2014 and in May 2015, GOGY issued some more notes to IBC and these ones carry an even more scary conversion rate – 40% of the lowest closing bid price during the twenty days prior to conversion.
Did IBC convert their debt? And did they throw their discounted shares in the hands of overly hopeful investors? We’ve no way of knowing, but we do reckon that the threat of a large number of discounted stock hitting the open market is worth considering.
