Pleasant Kids Inc (OTCMKTS:PLKD) Decides to Battle the Devastating Dilution
Several months ago, Pleasant Kids Inc (OTCMKTS:PLKD) (then known as NYBD Holdings) was preparing itself for a name and a ticker symbol change. People were pretty excited about the new identity of the company and they managed to push the stock out of the triple zero levels for a while.
Unfortunately, the hype eventually subsided and PLKD crumbled back down. In a matter of a little over two months, it incinerated a whopping 80% of its market cap and settled down in the dreaded $0.0001 to $0.0002 range. The company tried to push it up by issuing several optimistic press releases, but it was to no avail, and slowly but surely, the stock disappeared from investors’ radars.
Time to ask the painful question: “Why did PLKD suffer such a devastating drop?”.
The latest 10-Q is here to provide the answer. Here’s what the company had on June 30:
- cash: $100
- current assets: $37 thousand
- current liabilities: $2.2 million
- NO quarterly revenues
- quarterly operating loss: $67 thousand
It’s safe to say that commenting on the figures above won’t really be necessary because they do speak pretty well for themselves.
PLKD‘s financial situation has never really been rosy, but believe it or not, this is not the biggest problem. The thing that has put the most pressure on the share price is the toxic debt and the dilution that it has caused.
The latest 10-Q tells us that during the nine months ended June 30, the company issued a total of 2,104,722,263 shares of common stock as a conversion of $455,367 worth of principal amount and interest. It also tells us that in July a further $94,540 worth of debt was turned into 516,233,333 shares of common stock.
All these shares have had a truly catastrophic effect on PLKD‘s chart, and many of the people who jumped in while the price was still hovering above the $0.001 mark are now probably pretty angry about the company’s dilutive actions. It would appear, however, that the management team wants to make amends.
First, on November 28, PLKD announced that they have put together a share buy-back program and on December 4, they also said that they will reduce the A/S count. They even posted a scanned copy of the Amendment of the Articles of Incorporation on their Facebook profile, and it does show that they are changing the number of authorized shares from 10 billion to 5 billion.
Curiously enough, the document is still not available on the company’s profile at Florida’s Secretary of State’s website. Nevertheless, the fact that PLKD finished Friday’s session at $0.0006 per share for the first time since September shows that investors truly believe that something is done about the dilution.
But here comes another painful question: “Isn’t it all too little too late?”.
It’s up to you to decide. You must bear in mind, however, that at the end of July, there were around 2.77 billion PLKD shares issued and outstanding. As we’ve established already, about 2.62 billion of them saw the light of day as a conversion of debt at an average conversion rate of $0.0002 per share.
About thirty-five minutes after the opening bell, PLKD is sitting at $0.0007.
