Urban Barns Foods Inc. (OTCMKTS:URBF) Crashes Horribly

Urban Barns Foods Inc. (OTCMKTS:URBF) had a disastrous plunge as soon as the market had time to react to its latest 10-K, and unfortunately, this reaction seems to have been well warranted.

Truth be told, one glance at the company’s latest financial report was enough to discern where the ticker would be headed as soon as the market opened on Monday. Said annual report contained some pretty horrible figures, including:

  • Cash – $7 thousand
  • Total current assets – $70 thousand
  • Current liabilities – $1.1 MILLION
  • Annual revenue – $101 thousand
  • Annual net loss – $1.6 MILLION

However, it probably isn’t the unimpressive financials that pushed investors away from URBF in droves. No, the more serious threat to investor value documented in the company’s filings can be found under section F-10 – where the accounts of its toxic funding deals are. Suffice it to say, that section contains some pretty grizzly discount provisions, such as:

“at a conversion rate of 70% of the average of the three lowest closing bid prices of the Company’s Class A common stock for the 12 trading days ending one trading day prior to the date a notice of conversion”


“at a price of $0.021 per share or 65% of the lowest closing bid price of the Company’s Class A common stock for the 20 trading days ending one day prior to the date a notice of conversion is sent by the holder to the Company”

And if you think even for a moment that URBF‘s noteholders are not making the most of the situation, you’d better think again.

Of course, there’s no way to be absolutely sure who converted what when until said noteholders file a report on the matter. Then again, investors already have the raw dilution figures to work with:

  • As of June 15, 2015 URBF had 289 million shares of common stock outstanding
  • As of October 28, 2015 URBF had 429 million shares of common stock outstanding

Long story short – it’s no wonder that URBF crashed as hard as it did, and seeing as how the company’s achievements are mediocre and investor value is being poisoned by toxic debt, it wouldn’t be surprising to see it drop even further down.

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