Georgi Kamburov

American Green Inc (OTCMKTS:ERBB) Falls Back Down

by Georgi Kamburov March 1, 2016

During yesterday's trading the stock of American Green Inc (OTCMKTS:ERBB, ERBB message board) failed to sustain its move in the right direction and instead tumbled downwards closing the session with a loss of over 10% at $0.0017. Throughout the session over 134 million shares changed hands, which is the biggest daily volume seen by the stock since August 2015.

Despite the steady influx of positive PRs ERBB hasn't been able to form a more consistent uptrend and their stock is still sitting precariously close to the 52-week low of $0.001 that was registered in January. In its February 17 press release ERBB stated that the American Green-branded Live Rosin is now available in eleven locations in Colorado while their premium joints can be found in five dispensaries in Oregon. Last Thursday the company also announced that it has created The American Green Xpress for the delivery of cannabis to approved recipients. It appears that ERBB are moving forwards with their plans but the company has to do a lot more if it wants to move to higher price ranges.

And there certainly isn't a shortage of reasons for investors to be skeptical about ERBB. For years the company was talking about their ZaZZZ machines, which were supposed to be the first consumer-operated, ID-verifying vending machines for pot. In December, however, the company announced that each machine will be returned to them for "re-tooling" and now, over two months later, there has been virtually no new information about the vending machines.

The development of the ZaZZZ machines did leave its mark on the financials of the company, though. Taking a single glance at the latest financial report filed by ERBB is enough to reveal the truly abysmal state of the company - as of December, 21, 2015, American Green had:

• $4888 cash
• $228 thousand total current assets
• $7.95 million total current liabilities
• $108 thousand revenue
• $732 thousand net loss

Unfortunately, the depressing balance sheet is just the start of the red flags surrounding the company. Out of the reported liabilities over $5.6 million consisted of outstanding debentures and accrued interest. The myriad outstanding convertible notes can be turned into shares at a 50% discount allowing their owners to reap significant gains regardless of the current market price of the stock. Not to mention the simply atrocious dilution that has been taking place - in second half of 2015 over a billion fresh shares saw the light of day. Out of them around 894 million were issued for debentures and accrued interest. As of December 31, 2015, ERBB have approximately 5.53 BILLION outstanding shares out of the 7.75 BILLION authorized.

While some investors might still be excited by ERBB's potential the risks around the company simply cannot be ignored. Any trades involving the stock must be preceded by extensive research and careful planning. Investors should also take into account that after the end of yesterday's session the pump newsletters owned by Stellar Media Group issued a round of email alerts touting the stock of ERBB. Naturally, they didn't do it for free disclosing a $10 thousand compensation. The CEO of the company will also hold a new conference call today and will be answering questions submitted by the shareholders. It remains to be seen if his answers coupled with the hype generated by the pump will be enough to stop the stock from losing even more of its value. 

Comments 3

1. Guest
March 01, 2016, 02:06PM


2. Guest
March 01, 2016, 02:03PM

Quotes ha ha ha FU

3. Guest
March 01, 2016, 09:43AM

Quotes Why are you wasting your time Todor? What- where is Todor-smoking a joint?

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