Extreme Biodiesel Inc (OTCMKTS:XTRM) Resurfaces as a Pot Stock
A year ago, Extreme Biodiesel Inc (OTCMKTS:XTRM) was traded under the symbol BRKM and, as you can see from this coverage, not everything was going according to plan. So, apart from the ticker, is there anything else that has changed over the last twelve months?
For one, XTRM is no longer a SEC reporting company. Their latest 10-Q came out on November 19, 2012 and it covers the third calendar quarter of 2012. Since then, they filed a few 8-K’s informing us about the increase in the authorized capital and about changes in the management team after which the ticker was relegated to the Pink Tier.
Fortunately, they were kind enough to publish the unaudited financial statement for the third quarter of 2013 and we can see from it that during the fifteen months between September 2012 and January 2014, the number of outstanding shares has grown from around 125 million all the way to 717 million, which.
Stock wasn’t the only thing that got issued during that period. The management team also came up with some press releases in which they talked about acquisitions of oil recycling companies. The candidates were described as “established“, “profitable“, and “noteworthy“, but unfortunately, they failed to get through the negotiations stage which means that no mergers were actually closed. Somewhat predictably, investors didn’t seem impressed when they heard the news about an agreement signed with an unnamed Indian casino a couple of weeks ago.
And while XTRM were failing at finding suitable acquisition candidates, their existing business was withering. As you can see from our previous coverage, their financial situation at the end of Q3 of 2012 was not exactly perfect, but, if anything, the condition a year later was even worse. Here’s a summary of the most important figures:
- cash: $2 thousand
- current assets: $22 thousand
- current liabilities: $653 thousand
- quarterly revenue: $16 thousand
- quarterly net loss: $45 thousand
All things considered, XTRM looks like a sinking ship and yet, the ticker registered some intense sessions over the last two days. On Tuesday the price jumped up by as much as 225% while the dollar volume after six and a half hours of trading stood at $516 thousand. Yesterday, XTRM gained another 91%, logging a trade value of more than $854 thousand. This means that the ticker is currently standing at $0.0249 which commands a market cap of nearly $18 million. So, what’s the reason for all the commotion?
Apparently, like so many other penny stocks, XTRM are now looking at the marijuana industry. A press release hit the wire about twenty minutes before Tuesday’s opening bell and it announced that a new cannabis subsidiary has been formed. There are no details as to what the daughter company will do, but, apparently, investors are not that bothered and the hype is quite strong. Stock Goodies (who received $6 thousand in compensation) are also doing their best at keeping the fire going, but does that mean that XTRM is finally about to make a strong move in the right direction?
Currently, the odds seem against it. The two sessions were indeed impressive but they were caused by nothing more than hype. For all the enthusiasm, XTRM have nothing more to show us than a new website which doesn’t even appear to have functioning links.
At the same time, the people who received a huge number of shares during 2013, might decide to take advantage of the inflated price and unleash their holdings on the market. If that happens, XTRM is in for a drop which is why you should be careful to consider all the options before putting any money on the line.
United Treatment Centers Inc (OTCMKTS:UTRM) is also riding the wave of excitement around the marijuana industry. Predictably, it has registered some impressive sessions lately. At first, the run was fueled by nothing more than speculations and rumors, but, after the official announcement came out yesterday, the stock really flew. In just six and a half hours, UTRM added around 91% to its value while shifting nearly $1.7 million worth of shares.
