Marijuana Hype Digs Rapid Fire Marketing Inc (OTCMKTS:RFMK) Out of the Ground
We probably don’t need to tell you that the cannabis industry has been scorching hot over the last couple of days. Even CNN Money, whose primary focus isn’t the OTC Markets, noticed that the so-called “pot stocks” are off to an explosive start of 2014. As you probably know, Rapid Fire Marketing Inc (OTCMKTS:RFMK) want to make a name for themselves by selling electronic cigarettes and vaporizers which would allow you to smoke weed without bothering everyone around you with the nasty fumes and, predictably, their stock has also been on the move.
In fact, yesterday marked the fifth consecutive green session with cumulative gains since the start of the new year of around 566%. RFMK reached levels above $0.002 per share for the first time since March 2013 and also registered a daily dollar volume of nearly $730 thousand which is astonishing for a ticker that, just a couple of days ago, was deep in triple zero territory. But how long will the whole thing last?
If you ask Mr. Tom Allinder, RFMK‘s CEO, he’ll probably say that the future is bright. He updated the shareholders on the developments around the company three weeks ago and if you base your investment decision on the press release alone, you’ll assume that things are indeed looking good. He said that the first major step towards uplisting the stock to the OTCQB tier has been done, he announced that he wants to turn RFMK into a holding company and invited the shareholders to share their ideas about the future well-being with him.
If everything goes according to plan RFMK might be in for an interesting ride. Unfortunately, the chances of fair wind are somewhat questionable.
As Mr. Allinder admits, he expected to have the clever new dry vaporizers on sale by August 2013. Right now, five months later, he still has no clue when they’ll be on the market.
And that’s not even the biggest problem. RFMK‘s latest financial report suggests that the company has some serious problems in terms of revenue generation. The sales for the quarter ended September 30, 2013 have plummeted to just $3,242 – a whopping 86% decrease year-over-year. The rest of the figures are not exactly confidence inspiring, either. Here’s a summary:
- cash: $1,812
- current assets: $362 thousand
- current liabilities: $176 thousand
- net loss: $85 thousand
When you go through the older reports, you’ll see that they have managed to significantly reduce the liabilities, but unfortunately, this came at a cost. During the nine months ended September 30, RFMK issued a mind-boggling 665 million shares to satisfy just $561 thousand worth of debt. This brings the conversion price down to $0.0008 per share and if the people currently holding the discounted stock time their trades well, they could be in for a healthy profit.
There are a few other disturbing things as well. RFMK seem to have relocated their corporate headquarters since we last wrote about them. Apparently, they have moved from one residential house to another. The new address, by the way, is also listed as the location of Vidable Inc (OTCMKTS:VIBE)’s principal office. VIBE is a company with a history of promotions and a Caveat Emptor badge on their OTC Markets profile. The red flags surrounding RFMK‘s CEO mentioned in one of our previous articles are also probably worth keeping in mind while making your decision.
And so is the fact that, like most of the marijuana stocks out there, RFMK is currently propelled by nothing more than hype and excitement. The enthusiasm will eventually die out and as soon as that happens, companies in this industry will have to be supported by the progress they’re making in terms of operations. It’s up to you to decide whether RFMK has the potential to do that.
