HSP Team Want to Catapult Converge Global, Inc.(PINK:CVRG)
It is always interesting when you see a company that has started out as, for example, a mining venture, a couple of years later they have decided that they are going to ditch the mining operations and take on something completely different like software development, or waste recycling, or bio-medical solutions. It’s even more interesting when the company is developing the two businesses side-by-side. This is the case with Converge Global, Inc. (PINK:CVRG).
Back in 1985 CVRG were established as a mining company and now they claim that they are continuing to develop in this sector. At the same time, through its subsidiary Majestic Menu, they say that they are in the process of developing a new major web portal that will immensely ease the way people shop for products and services in the food and hospitality industry. This, of course, is very nice. We wondered, how is it coming along?
It would be fair to say that they still have a long way to go. Recently they told us that they have signed a contract with the first distributor that is going to be featured on the aforementioned website. According to the press-release, they will be selling some top-quality cigars and other tobacco paraphernalia. Again, this is a start, but one distributor does not a massive e-commerce website make, as they say. In addition to this, the portal isn’t even ready yet.
Nevertheless, HSP Team sent out some emails, telling us that CVRG is a great company and that the new internet platform will turn them into a gold mine. These claims are not convincing enough for us, though, so we started digging around, trying to find if there is actually any truth behind them.
We grew more and more dubious when we looked at the financial statement. It’s somewhat weird for a mining company to have no mining interests or properties whatsoever. In much the same way it’s rather strange for the same company to claim that they are developing a website when they also say in the financial report that depreciation has rendered all their computer equipment worthless. As for the rest of the financials, they don’t look terribly convincing either:
- cash: $296
- total assets: $206 thousand
- current liabilities: $693 thousand
- net loss since inception: $3.1 million
On a brighter note, they have already obtained the license to use the name Majestic Menu and the domain name is already registered which means that when the website is ready, there won’t be any paperwork to fill out. They say that the license cost them $200,000, and at this point, you might be wondering: “How did they pay for the license?”. We are here to tell you. The license apparently belonged to one of CVRG‘s officers and he/she gave it to them in exchange for 200 million shares. You can imagine, what sort of profit could be made from this stock should he/she decides to sell them.
Since our attention was drawn to CVRG by a promotional email, we decided to see who the sender is. HSP Team have a number of paid promotions under their belt and the outcome of these advertisements is pretty much the same every time: tiny margins for profit, followed by, in some cases quite catastrophic, downfalls. EMERGING WORLD PHARMA INC (PINK:EWPI) illustrates this trend quite clearly.
The decrepit financial state along with the fact that they are being advertised by a promoter with a shady history are good enough reasons, we think, to be very careful when making your decision on CVRG.
