DC Brands International, Inc. (OTCMKTS:HRDN) Puts ‘Marijuana’ In PR, Jumps
Firmly stuck in triple-zero land and traded on very thin daily dollar volumes? No news releases for months on end? Cannot file annual report on time? Never fear, simply plonk a new bit of PR and make sure it has the word ‘marijuana’ in it, then just sit back and watch the fireworks! It’s what DC Brands International, Inc. (OTCMKTS:HRDN) did and so far it’s working out.
After months of complete radio silence the tea-making company published an announcement, stating HRDN ‘seeks to become’ a financial service provider for marijuana businesses in the state of Colorado. HRDN intends to completely switch its focus, abandoning its unsuccessful ‘functional beverages’ business and provide accounting, payroll and tax payment services to pot businesses. Big switch? Maybe, but this sort of announcement sure worked for other companies in recent months, who surged dramatically after announcing a new line of work involving marijuana in some way.
It would be easier for investors to get excited about HRDN if the company didn’t delay its 10-K filing that was due on March 31 and if its latest quarterly was not such a dreary sight:
- $487 in cash
- $9.2 million in total current liabilities
- ZERO revenues for Jul-Sep 2013
- $1.5 million net loss for Jul-Sep 2013
To calm any worried investors who actually read the company’s filings and saw the above figures, the new press announcement states that the company currently has a $1 million ‘commitment’ from a financing partner. With no new 8-K filings reflecting such a financing deal, it might be that this actually refers to the $1 million convertible note HRDN issued to its former CEO, Mr. Richard Pearce. Hopeful investors may want to know that this note actually converts into common shares ‘at a 60% discount to the current market rate’, as per the quarterly report.
Putting together the delay of HRDN‘s annual report, its sudden decision to hop on the lucrative pot train, the dreary financial situation last reported and its recent triple-zero share price despite the two 1:100 reverse splits that the company effected in 2013, the red flags start to pile up really fast. Investors would do well to do their own, extensive due diligence before making a decision. We have seen more than enough recent hopeful entrants into the hot field of legal pot. Most of those spiked briefly, then came crashing down as reality caught up with them.
