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Investing and DUE DILLIGENCE required before investing in OTC related stocks

G.O. Joe

Active member
Veteran
There are only 25 million shares in the float most of which is tightly held.
http://www.otcmarkets.com/stock/CGRW/profile

The market looks forward, not backwards, which is why the stock price has been in a steady uptrend for the past 3 months.

Float is the opposite of tightly held, I think you meant the majority of their stock is held by the company's principals. The market is full of small investors who believe press releases and internet posts, who think cannabiz stocks are the hot new thing they can't miss out on. For the short term, it's possible to make money by buying then selling. One dip and everyone is going to sell. No licensed financial advisor is going to recommend this stock.

A financial report for them is at that site.
https://www.otciq.com/otciq/ajax/showFinancialReportById.pdf?id=129769

Earnings per share is calculated by earnings divided by outstanding common shares - the 127 million - which may not include the 25 million shares that were withdrawn recently. How Reuters and the Financial Times got the -$0.89 isn't obvious to me, but a negative EPS that is 3 times the stock price is an obvious cause for concern. The stock would not be doing so well if it weren't for marijuana-themed boards to advertise on.

Total assets for their statement ending Sept. 30 are listed as $275,838, but $250,000 of this is a Candwich License which they don't have now - The Company, Mark Kirkland, and Mark One Foods agreed to rescind a Licensing Agreement on October 30, 2014 for the rights to utilize the Candwich-in-a-can patent process and the return of Twenty-five Million shares of restricted common stock to the Company’s treasury - leaving them with $25,838 in total assets. For that quarter they had $3,137,872 in total liabilities, a -$111,859 net income, and retained earnings of -$10,581,297.
 

Nugrogirl

New member
The float is tightly held. Again the market is forward looking, not backwards. Public releases and county docs are better sources for DD for current information. I mentioned a press release when the pps was a nickel, I followed up when it was a quarter. Wednesday the share price hit .40 and settled at .345. I am not a licensed financial advisor but if you want to wait for one to mention a buy on this particular stock I would imagine it would be when its no longer a microcap stock.
 

EclipseFour20

aka "Doc"
Veteran
Re: CGRW, here are few questions I would ask--
1. What are the management team's (particularly CEO Delmar A Janovec) past accomplishments?
2. How many shares were sold by insiders during the pasty year? (as of Sept 2014, 72% of the common stock was held by just 3 corporate officers).
3. How many shares will be issued to settle the $3 million in current liabilities...with only $38k in current assets? (Think shareholder dilution and Janavec's past business practices of issuing stock in lieu of paying "cash").
4. Affiliates...who are they, their expertise, and how much are they "promised" (cash & stock)?

IMHO...tooo many pigs and not enough tetes for investors to suckle on.
 

valueseeker

New member
Valid Questions

Valid Questions

been reading this thread for a while and because I am now a shareholder of CGRW I figured ... what the hell, I will join and throw in my $3.75 worth
 

valueseeker

New member
Re: CGRW, here are few questions I would ask--
1. What are the management team's (particularly CEO Delmar A Janovec) past accomplishments?

Janovec has been in the public arena for 2 decades and although he has never been able to sustain success he has had several endeavors that saw and held significant gains. From what I have found in researching this current project is that he has assembled a very experienced group of people (one of the things missing in the past)

2. How many shares were sold by insiders during the pasty year? (as of Sept 2014, 72% of the common stock was held by just 3 corporate officers).

The share structure and issuances are available for the public in the disclosure statements. From what I can see the 72% owned by officers is all restricted. It also looks like no free trading shares have been issued in the last 6 months (the year end will be an interesting read) if the 4th quarter comes and goes with no issuances I think that can lay to rest some to the past dilution fears.

3. How many shares will be issued to settle the $3 million in current liabilities...with only $38k in current assets? (Think shareholder dilution and Janavec's past business practices of issuing stock in lieu of paying "cash").

That is the 64 dollar question and if you are playing with your rent money you might want to find some other high risk speculation MJ Stock. Me I like what I see and the team that is working on this.

4. Affiliates...who are they, their expertise, and how much are they "promised" (cash & stock)?

I think this is the best question and the exact reason I decided to roll the dice

the right law firm
BizAuctions Executes Engagement Agreement With Hoban & Feola, LLC Law Firm in Denver, CO
http://finance.yahoo.com/news/bizauctions-executes-engagement-agreement-hoban-201500006.html

A real consultant with a PhD in Botany (not just some PhD in religious studies or something purchased on the internet)
BizAuctions-Hires Consultant to Assist in Exploring Opportunities in Colorado
http://finance.yahoo.com/news/bizauctions-hires-consultant-assist-exploring-111500006.html

An Addition Degreed Consultant
Biz-CannaGrow Hires Consultant to Assist Dr. John Janovec with Colorado Cannabis Project
http://finance.yahoo.com/news/biz-cannagrow-hires-consultant-assist-104500754.html

From what I see is Dr. Janovec received 5mm restricted shares and his assistant received 2.5mm restricted shares.

Highly speculative and risky but I love the home runs and hope to hit one here



IMHO...tooo many pigs and not enough tetes for investors to suckle on.

then it would be best to sit and watch from the sidelines that way if it fails you want have risked anything and if it continues the current trend you won't have to worry about paying taxes
 

EclipseFour20

aka "Doc"
Veteran
Not throwing mud, just saying when 3 people own 72% of the common stock...and when you add family and friends (add another 10 basis points or so) for a potential 82% stake--definitely not enough tetes for the remaining 18% (maybe half that are actually being true "investors"...like yourself?).

BTW...restricted stock (Rule 144) does not mean the shares are "locked up" or liquidation is bound 100% to the "dribble rule". Institutional investors routinely buy "restricted stock" (at deep discount to the market price) and entering a series of transactions that involve pledging the restricted stock in collateral/hedge transaction for "cash" (which you later "default") are two popular ways of exchanging "restricted shares" for "cash".

I know...I have been there and done that, it is easy to flip "restrictive legend stock certs" before their time.

BTW...I wonder if the two Janovec's are related? Delmar and "Dr John"?
 

valueseeker

New member
the restricted stock is not available for 1 year from issuance and anyone with over 10% is subject to the affiliate 1% rule. It sounds like you don't have much tolerance for risk and should probably pass on this one.

For me, I like what I am seeing on the box with none of the usual suspects. I will play and you can watch
 

valueseeker

New member

G.O. Joe

Active member
Veteran
What does anyone in CO need them for? The company can't supply facilities and cannabis experience which they don't have and can't afford. The company's history is failure, except in convincing those to whom they owe money to accept stock as payment - but there isn't any other compensation available. What to do with 90-day rising stock with book value of -$3.17, except not get involved? Get some, convince novices to buy for more, then sell fast?
 

valueseeker

New member
well let me see now, with a landlord that is building to suit what looks like about a 1 million dollar facility I think there's going to be a lot of people in Colorado that need them.

I guess like with anything else time will tell.I only bought 50,000 shares and I am more than willing to wait and see what they have on tap.

I would also say in your case, with everything you found negative about the stock I wouldn't touch it with a 10 foot pole if I was you. that is the beauty of the Public Market we all have the free will to pick and choose and trade as we like.

good luck to you sir.
 

EclipseFour20

aka "Doc"
Veteran
Value, allow me to help you on a few points:

First, I played the "big game" a few times during the last two decades (both pubic and private) and know exactly what the rules are how the game is played; both "on the field" and "off the field". I made my stack in stocks already....so you might say its your time. Been there and done that.

Second, we don't know each other--so to cast judgement my risk/tolerance is rather "pre-judgmental" on your part. I appreciate your youthful exuberance but if you look back, I just said these are a few questions I would ask and have no reflection on my personal/professional risk/tolerance.

Finally, having worked a few decades in the corporate finance arena (due diligence, governance, interim CFO, etc) part of my compensation included stock, options, warrants, etc--all restricted. I know first hand how to move restricted securities before its time; is not impossible--just pricey. And yes reporting is required, but let's just say sometimes the reporting is late....like months/years late (oops....we forgot, administrative mistake, we told the attorney...his fault, etc). So IMHO, restricted stock means exactly that: it is "restricted from free trading" and expect a hefty discount if the legend is not removed if you want to cash it in early.

BTW, when a "public shell company" enters virgin waters and "family" become the experts...I question their business judgement (not invalidating it--just challenging it). My life-time experience is--if I want to surround myself with experts of a particular field/science/knowledge/expertise...seldom will the short list contain names of "family and/or friends". Not saying that it does not happen, let's just say, "it is another thing that warrants further inquiry", besides, nepotism has a way clouding ones' mind--especially when important decisions are being contemplated.

Sorry if I sound cynical, but having participated in dozens of due diligence investigations and part of the team that put together dozens of successive deals...certain things become second nature and it is hard to explain it with great specificity, but in the world of "investment": seldom are things what they seem.

Friends/associates gave me the nickname "doc" years ago...seems I have a skill-set to sniff out and make sense of crazy technical shit better than most; one of my due-diligence assignments was to interview the eggheads/scientists of the target company and verify their claims. Yeah, "back in the day" my business cards had a collection of alphabet soup printed behind my name, but PhD (pile high degree) was not one of them....lol. It is one of those things where your reputation precedes you--and in my case, I'm stuck with the nickname "doc".
 

valueseeker

New member
Sounds as if you are very knowledgeable in the public arena and I can certainly appreciate your skepticism. I also understand a thing or two about this arena so you are "preaching" to the choir. There is for sure an Art to all of this so good luck to you in all of your endeavors
 

audiohi

Well-known member
Veteran
Well, I will say this... I've barely read this thread, but if you had the balls to play this stock from Nov. - now.... Very nice trade. Book those profits.

It's been tough out there lately in canna stock world.
 

RetroGrow

Active member
Veteran
The entire stock market is a fraud on the American public, especially these OTC penny stocks. Nothing but a license to steal. MOST trades are done by computers trading with each other,making thousands of trades per second, trying to make fractions of pennies on each trade. It's like a vast chess match played by bots with our money. Totally corrupt. This is not your father's or grandfathers stock market. Computerized high speed trading should be outlawed.
 

valueseeker

New member
The entire stock market is a fraud on the American public, especially these OTC penny stocks. Nothing but a license to steal. MOST trades are done by computers trading with each other,making thousands of trades per second, trying to make fractions of pennies on each trade. It's like a vast chess match played by bots with our money. Totally corrupt. This is not your father's or grandfathers stock market. Computerized high speed trading should be outlawed.
Well said!! I have been trading MicroCaps for years and actually make a very nice living at it but I have a really tough time trading Blue Chips or Options even. With the Pennies I have to deal with toxic financing and CEO's that are better dreamers or liars than anything else, but at least I know what I am dealing with. With Blue Chips I would have to deal with computerized high speed trading and a media that can change direction on a particular sector just about as fast as the computers can trade (about nano seconds)

I usually trade in and out of MicroCaps in the same day or at least the same week. When one of the axes shows up on the box I know he is selling for a funder with discounted shares so I trade accordingly. I purchased CGRW back in Sept below .05 when it came up on a volatility scanner on the 18th, took three days to fill 100k share below .05 but it was worth the wait. I first came to my attention back in June when it did a typical Pop and Drop (I call them gap and craps) I opted to not participate then because the story (press) was just not saying much that blew my skirt up.

I put the stock on a watch list and when it popped up again I decided to give it a shot. I sold half the first week of November and as the story comes out I like what I see. Doesn't mean I am getting married but they do have my interest. This sector could go nuts again and I would love to have a little piece of it.

BTW: my last grow was in "89" and there is so much new information and techniques that I get overwhelmed reading about it all. It has all peaked my interest and I keep thinking about checking into it a little closer. Looks like a lot of red tape but for a retired old guy it might be fun. Good luck to you sir!
 

wingdings

Member
Veteran
Stocks are a decent way to slowly gain capital. A better investment would be a well diversified commodity trading strategy as commodity futures are highly leveraged. I'd recommend at least 50k to start an account to be able to deal with an initial drawdown.
Cannabis will probably become a traded commodity within the next decade. No easier way to control 1,000 pounds at a time.
 
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Lefthand

Member
I threw $500 at FITX stock, I bought at .06 it went to .12 now its at .015.
They are a pump and dump stock, in the past year their biz partners have had their trading suspended, they have been unable to acquire their grow license and have had their CEO get rich dumping his stock and is being investigated. Today they announced a new CEO.. Let the shit show continue...
OTC=cheap potential buy in. I did it more as education because I do not know the stock market and am ok with cheap lessons..
 

Lefthand

Member
Real estate is where its at right now. Rents and home value are increasing faster than ever, at least here in Denver/Boulder area..
 

valueseeker

New member
I threw $500 at FITX stock, I bought at .06 it went to .12 now its at .015.
They are a pump and dump stock, in the past year their biz partners have had their trading suspended, they have been unable to acquire their grow license and have had their CEO get rich dumping his stock and is being investigated. Today they announced a new CEO.. Let the shit show continue...
OTC=cheap potential buy in. I did it more as education because I do not know the stock market and am ok with cheap lessons..

Sorry to hear about that loss. I looked at FITX just as it was turning into a cannabis sector stock and the dilution had already bloated the float to well over a billion shares and the price was in the triple zeros... it was a great trade for some, but I passed because I don't like to have to babysit stocks.

BTW: CGRW closed 2014 with a last print at .40 and a 52 week high. only 25 million shares in the float:tiphat:
 
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