Yesterday's market session saw Tranzbyte Corp. (PINK:ERBB
, ERBB message board
) slump a little over 15% to a close of $0.012 per share. The stock climbed up the charts over the last two weeks and its run was a little too fast for its own good.
ERBB is an enterprise that changes names every couple of years. Its latest iteration, Tranzbyte Corp., claims to acquire and spin off subsidiaries in what it calls "dividend farming". The company is an aspiring entrant into the marijuana stocks sector, through its Altitude Organic subsidiary. This could largely explain the chart movement of ERBB over the last few sessions. Several other companies piggy backed the momentum in the sector that was spearheaded perhaps most notably by Medical Marijuana, Inc. (PINK:MJNA).
Taking a step back from the seemingly enticing chart of ERBB and looking at their filings sheds a different light on matters. The latest available quarterly report for the period ended September 2012 contains the following sobering figures, among other things:
- under $2 thousand in cash
- $3.7 MILLION current liabilities
- ZERO revenue for the quarter ended September 2012
- $210 thousand net loss for the same quarter
ERBB's fiscal year ends in June and the last available yearly report lists over $1.1 million in net loss for 2011 and 2012. In addition to swimming neck-deep in debt, ERBB has been issuing some convertibles that may interest investors. In June of 2012 ERBB issued a $500 thousand convertible to one of the company's former presidents, to serve as release of another secured note and assets. The conversion rate for the note is set at 50% of the lowest trading price over 360 trading days before conversion. Additionally, in 2012 ERBB issued upward of 450 million shares to cover fees and settle debt and accrued interest.
The company is running out of time for its next quarterly filing for the period ended December 2012. So far investors have only got a notification of delay that extends the time frame until February 19. The stock had a nice run but traders had to rely on old data and optimistic news and not much else.
Penny stocks are highly volatile investment ground, even more so when the stock in question is a pink sheet providing sparse public filings that has a history of promotional pumps. Do your own due diligence and stay safe!