Dutch Gold Resources, Inc. (OTCMKTS:DGRI) Tries to Resurface as a Marijuana Stock

The company last caught our attention nearly two years ago in May 2012. Back then, as their name shows, DGRI were trying to make it big by mining for gold and other precious metals. Well, just one look at their chart is enough to determine that things have certainly not gone as planned. For almost the whole of 2013 their stock saw trading only occasionally while at the same time was firmly rooted at the bottom of the chart at $0.0001.

All it took though was one brief PR from a month ago announcing that DGRI is switching to the medical marijuana industry and the company started climbing up once again. Yesterday they surged by more than 84% and returned to $0.0035, price ranges last visited two years ago as we already said. So, let’s see how prepared DGRI really is for this new endeavor.

In April 2013 they submitted a notification of late filing for the annual report for 2012 but sadly to this day there is no sign of that report. This leaves the quarterly report for the period ending September 30 2012 as the most current information we have for the company. But taking into account the lack of operations since then we doubt that the numbers have improved drastically: 

• $2212 cash
• $65 thousand total current assets
• $6.7 million total current liabilities
• ZERO sales 
• $366 thousand net loss

The accumulated deficit at the time had already surpassed $23 million while the outstanding shares were sitting at 2.4 billion out of the 2.75 billion authorized. That number is more than likely much larger now especially when back in July 2012 the authorized amount was increased to 4 billion. 

In the PR articles from last week the management team speaks about their intentions to file all the missing reports, to reduce all the debt on their balance sheet while at the same time focus their efforts on the financial side of the marijuana industry. Their website finance420.com is set to launch today which explains the extremely positive outcome of yesterday’s session.
DGRI has been making a lot of rather encouraging promises but for now they have nothing to offer. The depressing financials, lack of any current information and billions of issued shares should be enough to demand serious due diligence before any trades with their stock are attempted. 

Last Friday we saw an almost identical story – DC Brands International, Inc. (OTCMKTS:HRDN), a triple-zero tea-making pennystock, surged up the chart after they too decided to offer financial services to the marijuana industry. For now the general hype may push both stock even higher but it won’t last forever and anyone who stayed for too long stands to suffer massive losses.