Golden Global Corp (OTCMKTS:GLDG) Is Warming Up
If you are the sort of person who would only invest in a stock based on fundamental factors, you’ll be hard-pressed to like Golden Global Corp (OTCMKTS:GLDG).
The stock performance, for example, is pretty appalling. In December 2014, the company effected a 1 for 100 reverse split and the ticker found itself sitting at $0.01 per share, but less than nine months later, it hit the rock bottom of just $0.0001. The woeful chart is due to a couple of things.
The first one concerns the financial statements. Some of them are quite dismal, but perhaps more worryingly, some of them are missing altogether. GLDG said that they will file the 10-K for the period ended June 30 within the extension period, but they failed to keep that promise, and they are also lagging behind with the filing of the report for the first quarter of the current fiscal year.
The Limited Information sign that has popped up on the company profile is certainly pushing the stock down, but its effects are nowhere near as significant as the pressure coming from the apocalyptic dilution. When the aforementioned split was effected eleven months ago, GLDG‘s O/S count dropped from around 1.49 billion to a little less than 15 million. Thanks to a horrific amount of toxic debt convertible at some truly absurd discounts (in some cases as much as 70%), by November 2 of this year, the number of issued and outstanding shares had grown to “approximately” 438 million. Chances are, it’s much bigger right now because yesterday, in a matter of six and a half hours, investors traded more than 564 million shares.
This, of course, brings us to GLDG‘s current state of affairs. The massive volume from yesterday and the fact that the ticker has managed to unstick itself from the absolute bottom of the chart means that despite all the problems we listed above, people are still interested in GLDG.
The reason for this is a recent acquisition of a company called Ciroaycar LLC – the maker of Combo Hitter. Combo Hitter, as you might imagine, is a fitness device which resembles a punching bag but offers much more flexibility. It’s been developed by Brad Kohler who, being a retired MMA champion, knows how to throw a punch.
GLDG has already closed the acquisition and the previous mining business plan has already been ditched which means that from now on, the company should rely on the sales of the Combo Hitter. The thing is, no matter how clever the product is, GLDG are still going to need money in order to market it. Luckily, they told us that they’ve thought of that as well.
When they closed the acquisition of Combo Hitter, they announced that they have also signed a $5 million securities purchase agreement with a hedge fund called Blackbridge Capital LLC. The management team decided not to put the details around the funding commitment in the press release, but fortunately, they disclosed them through an 8-K filing. Thanks to it, we learn that over the next 24 months, Blackridge will buy GLDG shares at a 16.5% discount to the market price.
The filing also says, however, that along with a securities purchase agreement, there was also a registration rights agreement which is dated October 16, and it obliges GLDG to file an S-1 form registering the Blackridge shares within 30 calendar days. 32 days after the signing of the registration rights agreement, the S-1 is still not out.
We don’t know whether that has anything to do with it, but in an update to the shareholders from yesterday, the management team told us that the funding will come in the form of convertible notes.
