Acology Inc (OTCMKTS:ACOL) Gets High
Like many other OTC companies, Acology Inc (OTCMKTS:ACOL) as we know it today is the result of a reverse merger deal. Prior to the transaction which was closed in March 2014, the company was known as Pinecrest Investment Group Inc, it was a shell, and it was headed by a certain Richard Astrom.
To say that Mr. Astrom has some experience with penny stocks would be the understatement of the century. He has been (or still is) involved with numerous OTC entities like Macau Capital Investments, Inc. (OTCMKTS:MCIM), A Clean Slate Inc (OTCMKTS:DRWN), and EV Charging USA Inc (OTCMKTS:EVUS). It’s fair to say that he is not that popular with investors. This post from five years ago will show you why.
Some of you, especially the ones who have invested in the stock, will be relieved to hear that he is no longer a part of ACOL‘s management team and Board of Directors. The shell status is gone as well. ACOL currently offer what they like to call Medtainers – a plastic container which can be used for storage and grinding of marijuana as well as other substances.
It doesn’t sound like the most revolutionary idea out there, but it does seem to work. The latest 10-Q, for example, sports the following figures:
- cash: $58 thousand
- current assets: $270 thousand
- current liabilities: $1.2 million
- quarterly revenue: $413 thousand
- quarterly net loss: $84 thousand
With the worrying working capital deficit and the negative bottom line, the statement is hardly perfect. The press releases suggest, however, that it’s about to be improved. The company recently announced that some revenue records have been broken and yesterday, the management team said that they have started the process of expanding their facilities in an attempt to meet the increasing demand.
So, ACOL is one of the many OTC companies that promised investors that it will be able to monetize on the booming marijuana industry last year. It’s also one of the few that might actually be able to do it. Yet, the chart isn’t what you’d call pretty.
In fact, ACOL was completely ignored during the first few months after the change in the business plan. In September 2014, active trading finally began, but the volume immediately started grinding away at the stock’s value at quite a rate. In a matter of a couple of weeks, the ticker dropped from $0.50 all the way to less than $0.20, but unfortunately, it had no intention of stopping there. The free fall continued until ACOL finally found a bottom at around $0.0002 back in July.
It’s now surging, though. The recent press releases sent the ticker on a green streak thanks to which ACOL closed yesterday’s session at more than $0.003 per share for the first time in about five and a half months. The volume is also pretty strong which means that there’s no shortage of people putting their money on the line. But what should they look out for?
As always, it’s all in the filings. The filings will tell you that last year, shortly after the merger was completed, ACOL sold 700,000,000 shares in a private placement at a price of $0.000057 per share (it’s not a typo, there really are four zeros). They’ll also tell you that none other than Richard Astrom and his wife Pamela took part in the placement and immediately after it was closed, they had control over 400,000,000 shares of ACOL common stock. Last but not least, the filings will tell you that Mr. Astrom also holds a convertible note with a principal amount of $400,000. It can be turned into stock at a 50% discount to the market price.