Borislav Tonev

Chron Organization Com (OTCMKTS:CHRO) Takes a Break

by Borislav Tonev March 29, 2016

About a month ago, Chron Organization Com (OTCMKTS:CHRO, CHRO message board) was barely keeping its head above the $0.01 mark. Yesterday, it closed the session at $0.038. That's actually 0.15% below the pre-Easter close, but it's fair to say that a small consolidation was to be expected considering the massive climb the stock has experienced over the last four weeks or so. In addition to this, CHRO also logged a new 52-week high yesterday which clearly shows that people are interested.

That's because the company is going through some changes. As you can see, there's a new name and trading symbol. A new business plan was also put in place at the end of last year and by the looks of things, the management team (also new) is on a mission to turn all the promises into a reality. On March 15, the company announced that it has signed a letter of intent for the acquisition of SafetyNet Security – a Texas-based alarm installation and monitoring service business.

So, in theory at least, CHRO is a completely new company. More importantly, it's one that people believe in. But does that mean that you should simply put your money on the line without any further due diligence?

We're not so sure. Letters of intent are all well and good, but when you have no stable financials to step on, things could turn tricky. And at the end of last year, CHRO's financials weren't stable at all. In fact, the company had:

  • NO assets or revenues whatsoever
  • $138 thousand in current liabilities
  • a quarterly net loss of $131 thousand

Still, it should be noted that this was CHRO's position almost three months ago and it might not correspond to what the company has at the moment. We should also point out that SafetyNet's acquisition may be completed with the issuance of stock.

While we're on the subject of stock printing, however, we should probably draw your attention to another thing you should consider while deciding whether to invest in CHRO or not. Last year, more than 116 million shares saw the light of day as a conversion of debt at a rate of $0.0001 apiece. At the end of 2015, there was a note with an outstanding principal balance of $25 thousand. Every single penny of that amount was convertible into 100 shares.

Will this note be converted? That's for time to tell, but we should probably point out that according to Nevada's Secretary of State, CHRO recently upped its authorized cap from 750 million to 1 billion.

Regardless of whether you truly believe in CHRO's brand new business plan, you should never underestimate the threat of a huge number of really cheap shares hitting the open market.

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