Aristocrat Group Corp (OTCMKTS:ASCC) Lands on the Radar Again
In July 2013, when we last wrote about Aristocrat Group Corp (OTCMKTS:ASCC), the stock was sitting at around $0.30 per share. Right now, it’s hovering just under $2.50. Based on this, you’d be forgiven for thinking that the company has experienced quite a lot of growth over the last two years. And in some aspects at least, it has.
Things weren’t off to the quickest of starts initially, but ASCC did generate their first revenues during the fourth calendar quarter of 2013, and the filings clearly show that the sales have been growing ever since. More recently, they announced that they will be offering their vodka in a brand new bag-in-box packaging and they also said that they’re concentrating on launching it in Canada. We’ll leave it up to you to decide whether the notions of “premium” vodka and bag-in-box packaging mix very well, but whatever your opinion, there’s no denying the fact that the press release paint a bright future for ASCC.
That, however, has nothing to do with the current share price. Three and a half months ago, the ticker was actually struggling to stay above the $0.03 per share mark. Then, on April 17, the management team decided to give it an artificial boost with the help of a 1 for 100 reverse split. This artificially pushed ASCC above the $1 mark and although the stock has been somewhat hesitant overall, it’s been moving up in the recent sessions thanks to the aforementioned press releases. You’re probably wondering if the uptrend is sustainable.
We’re not entirely convinced. The 10-Q, for example, is not what you’d call confidence inspiring:
- cash: $40,679
- current assets: $86,808
- current liabilities: $400,185
- quarterly revenues: $34,885
- quarterly net loss: $508,516
Sure, the sales are growing both on a year-over-year and on a quarter-over-quarter basis, but they’re still not that significant and they’re far from enough to offset the operating expenses. At the same time, the sorry-looking balance sheet raises some questions around ASCC‘s ability to make good on all of its promises.
So does the reputation of the person running the company. Mr. Robert Federowicz is still in charge and, as we have mentioned numerous times in our articles, he has been involved with many other OTC enterprises that have failed spectacularly in bringing any value to their tormented shareholders. Many people hold the opinion that doing any sort of business with Mr. Federowicz and the companies connected to him will eventually leave you in tears.
Even if you tend to disagree with those people, you should still be sure to take a closer look at the latest 10-Q. Once you do, you’ll see that between November 2013 and January 2015, ASCC picked up more than $1.2 million worth of debt, all of which can be converted into stock at a rate of $0.01 per share. There is also an older note which is convertible at $0.02.
Mr. Fedrowicz and his colleagues knew that the reverse split from April will give the note holder, an entity called Vista View Ventures Inc, a massive profit opportunity and they knew that the people behind it might be eager to convert the debt and offload a huge amount of discounted stock on the open market. Yet, they did absolutely nothing to renegotiate the terms of the notes.
As a result, between May 1 and June 22, when ASCC was flying well over the $1 per share mark, Vista View received 148,000 shares at just $0.02 apiece.
