Premier Brands, Inc. f/k/a Tracksoft Systems Inc (OTCMKTS:BRND) Still Sliding

On July 11 a press release issued by George Sharp came online informing us that Premier Brands, Inc. f/k/a Tracksoft Systems Inc (OTCMKTS:BRND) have been found guilty of participating in a spam pump campaign. Blue Horseshoe Stocks (BHS) apparently decided that this should be celebrated… with another promotion.

In the interest of fairness, we should point out that BHS did their campaign for free and they didn’t really focus on the lawsuit against BRND, preferring instead, to talk about the new Bad Boy Vodka which is endorsed by basketball super star, Dennis Rodman. Indeed, although being found guilty of participating in a scheme was not BRND‘s finest hour, the commotion around the new brand of Russia’s national drink grabbed more attention from the investors and, as you can see from the chart, the ticker registered an astonishing run jumping from $0.0013 all the way up to $0.0155 in no more than two days. That’s a lot even in Pennyland and a correction was bound to occur sooner or later. It happened on July 12 when BRND slashed around a quarter of its value in a single day, and the sessions to follow saw so much fluctuation, that predicting what will happen next was nigh on impossible.

Ultimately, however, the lack of a new quarterly report and the eerie silence from the PR department scared some investors away which, in turn, put a lot of pressure on the price. Yesterday, BRND logged its fourth red session in a row which means that the ticker currently stands at around $0.005 and we’re pretty sure that a lot of people are wondering about the chances of recovery. Unfortunately, the odds seem to be against them.

If you check out our articles from July, you’ll see that we had doubts about BRND‘s share structure – some of the sessions ended with around 127 million shares changing hands while, according to their previous quarterly report (the one for the period before February 28), the total number of issued and outstanding shares was just under 53 million. We were eagerly awaiting the 10-Q for the quarter ended May 31 and, after some delays, it was published on August 8.

Unfortunately, the information contained in it is not too inspiring. The humongous trading volumes from July can now be easily explained. As of August 5 the total number of issued and outstanding BRND shares was 183,394,879 meaning that within just four months, more than 130 million new shares saw the light of day. That’s some heavy dilution, and the financial statement suggests that much more is to be expected. The liabilities have more than doubled since the previous quarter and the revenue seems to be shrinking. Here’s a summary of the most important figures as found in the 10-Q:

• cash: $4 thousand
• current assets: $72 thousand
• current liabilities: $10.5 million
• quarterly revenue: $98 thousand
• net loss: $6.5 million

With those things in mind, you’re probably thinking that the only thing that could possibly save BRND from oblivion is the Dennis Rodman vodka. Unfortunately, we’ve no idea where this one is going either. BRND said that sales were to start on July 27, and they were supposed to be done through their distribution network as well as through a special website dedicated to the brand. Unfortunately, the website in question seems to be down for maintenance at the moment and the domain name redirects us to AB Partners LLC – the entity that helped BRND put the brand on the market.

The company’s press releases are more preoccupied with the partnership that they established with DC Brands International, Inc. (OTCMKTS:HRDN) and, quite frankly, we’re not sure why they seem so excited about it. HRDN is a publicly traded company and when you check out their filings, you’ll see that as of June 30 they had no more than $1,051 in cash and a quarterly net loss of $1.2 million. Sure, they could do with some marketing advice, but whether the contract between the two penny stocks will lead to a change in BRND‘s financial situation remains to be seen. Make sure you have this in mind before making any decisions that might prove costly.