Monarch America Inc (OTCMKTS:BTFL) Tries to Get Out of Double Zeroes

After a stupefying crash that took place in late October and early November, Monarch America Inc (OTCMKTS:BTFL) is pushing to regain at least a fraction of lost ground. In yesterday’s session the stock put on 161% – an impressive move rendered less so by the fact that after this jump BTFL found itself at $0.008 per share.

BTFL was trading at over five cents per share just over a month ago. In late October the stock took a horrific dive. Within the span of only six market sessions BTFL‘s share price thundered downhill, from $0.067 per share all the way down to double zeroes. This was not even the end of if, as the stock slipped further, going as low as $0.0026 on Nov 19.

The only event in close proximity to the sudden drop from multiple cents to double zeroes is the filing of an 8-K, informing shareholders of the appointment of a Mr. Shaun Snowden as BTFL‘s CFO. There is nothing particularly outrageous about the $82,000 in annual salary or the 1 million common shares issued along with his appointment, as the shares are restricted for a full calendar year.

BTFL‘s latest quarterly is actually a more unpleasant sight. The company published the following figures in its Q3 report that went public on Nov 16:

• $151 thousand in cash
• $4.1 million in current liabilities
• $1.3 million in Q3 revenues
• $1.3 million in Q3 net loss

BTFL is a company focusing on “various opportunities” in the legal marijuana business. Sadly, that sector seems to be losing steam faster than a locomotive without a stoker. The company’s net loss has increased a fair bit over the previous quarter.

Among the parties that hold BTFL convertible notes is the name of notorious toxic OTC financier Redwood Management LLC. Redwood’s note converts into common BTFL stock as a 35% discount from the lowest trading price of common stock 20 days prior to conversion. In other words, the slumping price is an excellent opportunity for the noteholder to get boatloads of very cheap shares.

As a matter of fact Redwood has already taken advantage of this situation twice in late October, right after the big crash, and in early November, converting $45,800 of debt into 3,500,000 shares of BTFL stock, with an average conversion price of $0.01 per share.