A Distribution Agreement Sends DNA Brands, Inc. (OTCMKTS:DNAX) Flying
We last wrote about DNA Brands, Inc. (OTCMKTS:DNAX) a couple of weeks ago when the ticker had just bounced unexpectedly. Naturally enough, we were wondering if it had what it takes to sustain the uptrend.
As it turns out, it didn’t. DNAX faltered on May 29 and in a matter of six sessions, it managed to wipe out around 60% of its market cap.
Yesterday, however, it made an even more astonishing jump. In a matter of just six and a half hours of trading, DNAX gained a whopping 525%. It smashed through the $0.01 barrier and closed the session at its high of the day of $0.015 per share. Needless to say, we’re now wondering if there’s anything to suggest that this run will be longer than the previous one.
There is one major difference between the two leaps – there is a clear reason for the current surge of interest. Around 12PM yesterday, DNAX issued a press release which informed us about a distribution agreement between them and a company called Trenton Coca-Cola. The announcement sent the ticker flying and it also brought in around $2.36 million in dollar volume.
Since there’s so much money at stake, we feel that it’s important to point out a fact that some of the investors might be overlooking.
“Trenton Coca-Cola Bottling Company LLC. is a separate legal entity and uses the trademarks of The Coca-Cola Company by written agreement.“
These are the words you’ll see if you open up Trenton Coca-Cola’s website and bearing them in mind when making your investment decision is, we reckon, extremely important. The majority of investors around the discussion boards seem to be aware of this, but there might be some other people out there who have let it slip unnoticed.
And since we mentioned the internet forums, we should note that one of the main points of discussion at the moment is a 20 for 1 forward split that, some people think, is going to happen really soon.
Indeed, if you have a quick look through a Schedule 14 form that DNAX published recently, you’ll see that there is indeed a 20 for 1 split mentioned in there. The thing is, it seems to concern another penny stock company called Oro East Mining Inc (OTCBB:OROE) which, as far as we can tell, has nothing to do with DNAX. If you go through OROE‘s filings, you’ll see that they too published a Schedule 14 form recently and it says that they are indeed about to split the stock.
That got us thinking: “Will there be a split at DNAX as well, or is this simply a case of sloppy copy/pasting?“.
Hopefully, the management team will soon shed some light on the matter. In the meantime, investors who are still thinking about putting their money in DNAX should be aware of one more thing – the heavy dilution which, by the way, seems to be picking up speed.
We touched upon the issue in our previous article and, thanks to the aforementioned Schedule 14 form, we now know that between May 18 and June 3 (a period of eighteen days), DNAX issued a whopping 78,544,429 shares of common stock.
If the information in the filing is accurate (which, as you can see, is not 100% certain), the O/S count at the moment should be standing at around 318 million and the number of authorized shares will soon be increased to 1 billion.
