American Green Inc (OTCMKTS:ERBB) Wipes a Third of Thursday’s Run

The monster run that pushed American Green Inc (OTCMKTS:ERBB) over 80% up in Thursday’s session ended as quickly as it came about. On Friday the stock dropped 15% and wiped exactly one third of the progress made in the previous session. ERBB ended the week at $0.0034 per share.

The jolt that helped ERBB shrug off the coma it was in came from a peculiar source. The company released another of its infamous press releases, informing ERBB ‘brand licensee’ Herbal Elements got clearance from Colorado authorities to function as a retail marijuana product manufacturer. This should increase the amount of goods Herbal can produce and was also reason enough for ERBB to put up new PR.

Hopefully, this one actually culminates into something meaningful that can be seen on the books and in the company’s balance sheet. ERBB is great at talking about know-how and knowledge and about its vast experience in the fledgling marijuana sector but its financial reports suggest the company, despite all this precious experience, is not doing too well.

The latest available report from ERBB contains information that is five months old now and lists the following:

  • $254 thousand in cash
  • $7.2 million in current liabilities
  • $257 thousand in quarterly revenues
  • $1.2 million in quarterly net loss

A lot can happen with a pink sheet penny stock in five months and it will be six before ERBB‘s annual report is out. Perhaps the most important thing that did happen since this quarterly is that ERBB increased its authorized shares by over 50%, upping the figure by 3 billion and landing at 7.75 billion AS. This was an inevitable event and the mounting dilution it foreshadows was visible on the company’s reports for months.

ERBB is up to its eyeballs in convertible debt, which noteholders can turn into common stock at a massive 50% discount from the lowest market price 12 months prior to conversion. It seems shareholders deliberately choose not to wrap their heads around this notion and wave it off as though this debt does not exist. In fact, it’s very likely just this debt and the millions of cheap shares it converts into on a continuing basis, as seen in the company’s previous reports, are the main reason for ERBB‘s tumble down the charts over the last 10 months.

The fact that the ZaZZZ machine failed to take off and is undergoing yet another redesign is not helping ERBB either. The mythical 18 new machines that were supposedly dispatched never showed up on the ZaZZZ network portal. In fact, the portal now lists less machines that it did a few months ago.

ERBB‘s annual report is due by the end of September. It will show just how much revenue ERBB‘s diversified business model managed to bring in and how many new shares saw the light of day in the wake of the July AS increase.

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