American Green, Inc. (OTCMKTS:ERBB) Files Quarterly, ZaZZZ Fizzles
It has been a long wait but the results are finally out – American Green, Inc. (OTCMKTS:ERBB) put up its due quarterly, or at least one part of it. The company botched up on the technical side of things and put up its financial statement twice, missing the ‘information and disclosure’ portion of the quarterly. The report represents an improvement over the previous quarter but it fell short of the booming performance some probably expected in the wake of the ZaZZZ machine launch.
The short version of the quarterly’s balance sheet lists the following:
- $254 thousand in cash a/o March 31
- $7.2 million in current liabilities
- $257 thousand in quarterly revenues
- $1.23 million in quarterly net loss
So, what exactly changed from the previous quarter? Revenues went up 5% from the $243 thousand in the previous quarter. Net loss was also reined in from $2.28 million in the previous quarter, due to a dramatic decrease in ‘sales and marketing’ and ‘general and administrative’ expenses.
While this is all admirable, the new numbers mean that the launch of the ZaZZZ machines had barely any effect even on the company’s top line, as revenue shifted up by just $10 thousand. If ERBB‘s PR about OG Tea sales growing 300% YoY and Truth Lighting selling more each month is to be believed, this would mean that the 5% increase in revenues might have nothing to do with the ZaZZZ at all.
The missing “information and disclosure” portion of the report is far from the only problem. The new filing reveals that ERBB obviously forgot to report the issuance of $870,000 worth of new convertible debt between October and December 2014 in its previous report. The four separate debentures comprising comprising this debt only appeared in the latest quarterly for the three months ended March 2015 – a significant oversight and an example of sloppy pink reporting.
In addition to this older debt, the company issued another $803,000 in additional convertible debentures between January and March 2015. Naturally, all this debt converts under ERBB‘s usual conditions – at a 50% discount from the lowest closing bid price 12 months prior to conversion.
As for maxing out authorized shares, ERBB is not quite there yet. As of March 31 ERBB reported 4,435,140,215 outstanding shares – an increase of 87 million against December 31. The number of outstanding shares would have been much higher if certain debenture holders did not choose to return 216 million shares back to the company and increase their convertible debt “by the same amount which was when the shares were originally issued” – whatever that may mean. With no other details provided in the report, this makes it seems an awful lot as though someone converted too early and wanted to make use of the new lows the stock dropped to and get a further 50% discount from there, upon a new conversion of the debt. This all seems to be in stark contrast with COO Stephen Shearin describing ERBB debenture holders as “friendlies” and the financing – “the exact opposite of what you might call toxic” in a March interview for PotStockRadio dot com.
The company’s fiscal year ends in June. This means it will be at least another four months before ERBB puts up another report. By then, investors will be hoping that all ZaZZZ units listed on the ZaZZZ Network portal will go online and become fully activated, possibly even generate sizable revenues.
ERBB is currently 6.7% down in early trading.
