Dragon Capital Group Corp. (OTCMKTS:DRGV) Finds Itself in the Spotlight

Dragon Capital Group Corp. (OTCMKTS:DRGV) finally broke the chains that were keeping it anchored to the bottom of the charts for so long. Yesterday, it surged by 150% and, after logging a dollar volume of almost $180 thousand, it reached a close of $0.0005 for the first time in over seven months.

The massive jump was caused by the financial report for the second quarter. It actually came out on Friday which means that DRGV were a bit late with it. The figures in it, however, suggest that the extra waiting was worth it:

• cash: $852 thousand
• current assets: $11.6 million
• current liabilities: $2.4 million
• revenues for the first half of 2015: $10.5 million
• net income for the same period: $926 thousand

At this point some of you are probably thinking that there’s been some sort of massive misunderstanding in the first paragraph of our article. Some of you probably reckon that a company with eight figures under its revenue section can’t possibly cost just $0.0005 per share. There is no misunderstanding. DRGV really is a triple zero stock and before the report came out, it really was struggling to lift itself off the absolute bottom of the chart. There are a few potential reasons for this.

First of all, DRGV is one of the many Chinese companies on the OTC and, as many of you know, Chinese OTC companies don’t have much of a reputation. It might seem a bit wrong to drop all the Chinese companies under the same stereotype, especially in this day and age of political correctness, but penny stock investors have gotten burnt on so many shady enterprises from the world’s most populous country, that being a bit careful is only natural. And it’s not like you can simply pop round to the company headquarters and see what’s going on.

Theoretically speaking, however, this argument shouldn’t really work in DRGV‘s case because you simply can not argue with the figures. They’re pretty decent at the moment and they have been for quite some time. What’s wrong, then?

Although DRGV is just about managing to stay profitable, the management team have still had to resort to the issuance of convertible debt. The results are pretty terrible. Between August 19, 2014 and February 26, 2015, DRGV issued a grand total of 461,063,204 shares of common stock as a conversion of debt at rates ranging from $0.00038 to $0.00004 (that’s right, four zeros). In May, a further 100,000,000 shares saw the light of day at $0.00008 and in August, 175,107,795 were also issued at $0.00005.

The exuberant stock printing led to an O/S count of over 2 billion shares at the beginning of the month. With a significant portion of them issued at just a few thousands of a penny apiece, emerging out of the triple-zero ranges could be a tall order for DRGV.