Borislav Tonev

CGrowth Capital Inc (OTCMKTS:CGRA) Doubles Its Value Again

by Borislav Tonev April 30, 2015

The first three months of 2015 were pretty uneventful for CGrowth Capital Inc (OTCMKTS:CGRA, CGRA message board). The volumes were all but non-existent and the stock was consistently failing in its attempts to break through the $0.002 per share mark.

Then, at the end of March, the company filed its financial report for last year and all of a sudden, investors started paying attention. The stock shot up on April 1 and after six and a half hours of intense trading, it reached $0.003 per share, effectively doubling its price.

Unfortunately, the spike proved to be short-lived. CGRA started sliding towards the bottom on the very next day and about two weeks later, it was pretty much back where it started. The volumes shrunk as well and it looked like the stock will be left dead in the water. Then, the management team decided to give it a second chance.

Last week, they announced that they have signed a letter of intent with a company called Wildfire Cannabis Company LLC. Wildfire is, apparently, a licensed marijuana producer and processor and it will use a portion of CGRA's properties under a lease agreement. Yesterday, the two companies issued another press release, saying that some of the regulatory organs in the State of Washington have given Wildfire the green light.

Investors are definitely reacting to the news. The volumes picked up immediately after the initial press release and the stock started going up. Yesterday, CGRA gained exactly 100% and reached $0.006 per share for the first time in over six months. All this on a dollar volume of about $390 thousand.

People clearly are excited about the new deal, but is this because of the fact that CGRA's press releases now contain the word 'marijuana' in them? Or is it because they reckon that the new agreement will have an impact on the future financial statements?

We certainly hope that the letter of intent will truly help the company prop up its financial situation. As we mentioned in our previous article, the annual report that got so many people fired up four weeks ago isn't really that impressive. Here's a summary of the figures once again:

  • cash: $1,227
  • current assets: $174 thousand
  • current liabilities: $1.7 million
  • yearly revenues: $486 thousand
  • yearly net loss: $561 thousand

The revenues don't look too bad for a sub-penny OTC stock and if you compare them to the results recorded a year ago, you'll see a 133% jump. Unfortunately, on a quarter-over-quarter basis, things are a little bit different. There was a spike during the second quarter of 2014 when CGRA's sales reached more than $182 thousand, but sadly, since then, the figures have been tumbling, and the Q4 revenue stands at just $114 thousand. As for the rest of the financials, we reckon that they speak pretty well for themselves.

The unimpressive figures are just a part of the story. CGRA has gone through quite a lot of dilution as well, and as we also mentioned in our previous article, a rather significant portion of the newly printed stock (more than 108 million shares) saw the light of day as a conversion of debt at a rate of just $0.0005 per share.

Will the new lease with the cannabis company be enough to offset all of these problems? It's up to you to decide.

Comments 1

1. Guest
July 18, 2016, 10:16AM

Quotes Looks like it is going up again

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