Crown Marketing (PINK:CWNM) are on a Promotional Spree
We already lost count of the promotional emails touting Crown Marketing (PINK:CWNM). It all started around in mid-January and since then there have been dozens of pumpers and about as many forward-looking headlines hitting the inboxes once every couple of days. The problem with all this is that there is little ground to support the bold claims.
CWNM is still in the development stage and there is little to suggest that actual production will start anytime soon. In our previous articles we explained that they are a pharmaceutical company and they have devoted themselves to developing a ground-breaking technology for the way medicines are absorbed by the patient and it is supposed to turn the medication industry upside down.
Developing a new technology and especially in the field of health protection is painfully slow, though and, as you know, it requires countless hours, days, weeks and months of testing. You would also know that the tests cost money. So the most important question is: “Do CWNM have money?”. In a word, no. Here are the figures according to their latest quarterly report covering the period before December 31, 2012:
- current assets: $5,067 in cash
- current liabilities: $40 thousand
- revenue for the period: $0
- net loss for the period: $18 thousand
- net loss since inception: $110 thousand
In the same statement, they estimate that they will need additional $862 thousand in order to finance their operations until June 30, which marks the end of their fiscal year. The problem is, they reckon, because of the limited operations so far, banks won’t be too keen on lending them this sort of money, which it turn would mean that they will need to issue quite a lot of shares. The technical term for what will follow is “dilution of mammoth proportions”.
And you can’t say that CWNM shareholders are not familiar with the procedure. According to the financial report, when CWNM took on the pharmaceutical industry, they issued a total of 122,600,000 new shares to the current CEO of the company, Mr. Learned Hand. A few months later, a considerable amount of warrants were exercised at a fraction of the current price.
This sparks another problem: while Mr. Hand’s shares are restricted, as they should be with every self-respecting company, the people who converted the warrants are now absolutely free to trade them, which means that if they get tired of the lack of actual progress and revenue, they might decide to get rid of them. That will certainly mean a price drop and if you are one of the people who believed the newsletters, you could get seriously burned.
The amount third parties spent on the ongoing publicity campaign is truly staggering. Elite Penny Stock (EPS) is just one of the newsletters touting CWNM and the people standing behind it pocketed a whopping $20,000 for the promises of wealth and fortune. Just like CWNM and the share issuance, EPS are no strangers to the act of pumping companies in a dreadful financial state. One example is ANYTHING TECH MEDIA (PINK:EXMT) who got the promotional treatment back in May 2012. Since then, their price has gone from around $0.06 per share, to the sub-penny field as seen from the chart on the right.
