Why the Playboy Energy Drink will never make Cirtran shares go up
There are several reasons the energy drink, no matter how popular it becomes, will never have a real impact on the price of Cirtran's stock:
1. Cirtran owns only 14%: Cirtran has given away 86% of the profits and losses from the sale of the energy drink to investors for very small amounts of money. As a result, Cirtran retains only 14% as of the most-recent Q. (Page 11).
2. They lose money on every can sold: to date, Cirtran has lost money on every can sold. They have reported negative gross margins, negative operating margins, and losses from operations related to the beverage sales. Cirtran loses money on each sale. Then, above and beyond that, they have to pay royalties to Playboy.
3. Cirtran has a huge debt obligation, no cash, and it's coming due: Cirtran has already defaulted on several obligations, and is trying to extend the maturity to August 2011. Even if they do so, they have no means by which to generate the cash to repay this debt by then. It's almost certain that they'd have to turn over any assets to their lenders, and this includes the energy drink, should it ever turn into anything of value. Again, since they lose money on each can sold, there's no reason to think there will ever be value to turn over, and bankruptcy is a far more likely option.
This is all from the SEC filings. It's not conjecture. It's fact.