The Pumpers Return To Definitive Rest Mattress Company (OTCMKTS:DMRC) f/k/a Crescent Hill Capital Corp
The stock of Definitive Rest Mattress Company (OTCMKTS:DRMC) f/k/a Crescent Hill Capital Corp has been touted by email alerts almost daily since the start of June. Most of the involved newsletters however disclosed no compensation for their services while those that did receive some money bagged between $1 thousand and $5 thousand. This could explain why the pump had almost no effect on the movement of the company’s stock, until yesterday that is.
After the end of Tuesday’s trading the affiliates of Stellar Media Group Ltd – Prepump Stocks, Penny Picks, Damn Good Penny Picks, joined the pump and issued a round of emails. This time the pump newsletters received the far more substantial compensation of $23 thousand. The attention towards the stock generated by the promoters was further boosted by a new PR published by DRMC before the start of yesterday’s session. In it the company announced that it will try to add Carbon Fiber Technology to their line of advanced manufacturing technology products. The PR also revealed that the new corporate website should be ready by the end of the month.
The pump emails and the PR put investors into a state of real buying frenzy. By the time the closing bell rang signaling the end of yesterday’s session the unprecedented amount of 126 million shares had changed hands. The increased trading didn’t translate into a massive price gain though and DRMC closed the day just 3.2% in the green at $0.0032, the lowest price for the stock during the session. In early trading DRMC did manage to climb to a high of $0.0079 but all the gains were quickly erased.
Such performance isn’t that surprising for a stock being targeted by a paid pump. The fact that the red flags around the company run far deeper than the promotion makes trading the ticker even riskier.
At the start of the year DRMC decided to abandon their previous business and instead venture into the Machine Tool and Metals Industry, Distributions and Sales. And the company’s financial results for the first quarter since the change in business plans did show a significant improvement over the same period last year. The quarterly report contained the following numbers:
- $35 590 cash
- $52 565 total current assets
- $6809 total current liabilities
- $63 379 revenues
- $12 469 net income
Despite the fact the fact that a net loss of over $44 thousand reported at the end of March 2014 was now turned into a net income of over $12 thousand as a whole the balance sheet remains rather underwhelming. DMRC has stated that they will need to find new sources of funds in order to progress with their operations.
And this leads us to the convertible debt of the company and the dilution of the common stock. Last year 21.5 million shares were issued as a conversion of debt at just $0.0001 each. As of September 30, 2014 DRMC had 288 million outstanding shares and the annual report for 2014 states that since then no new shares have seen the light of day. This, however, doesn’t seem to be true because as of December 31, 2014, DRMC reported 496 million outstanding shares. Apparently 100 million of the newly issued shares went to the insiders of the company but there is no information about the rest.
DRMC is an extremely risky choice. The stock has wiped a significant portion of its value since the highs of $0.018 posted in January and the ongoing pump and lackluster financials could continue to have a negative impact on its movement.
