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Your shares to sell would have been standing in line with over 300 million shares from other people, and all of those shares would have been in that line in front of you.
So, you didn't really miss anything. There were not buyers for 300 million shares @2 so your sell order never would have executed anyway.
Why are you so convinced that things must happen in that order?
Large sum lenders are smarter than you and me. If we see the value in waiting until the PPS rises, what makes you so sure that the note holders don't see the same value?
A merger with an OTC Pink only makes sense if a privately held company wants to merge with a publicly held company as a shortcut to tap into the public equity market.
Pepsico, Inc. is already a publicly traded company (ticker symbol PEP) trading on NASDAQ, and trades for slightly over $100/share.
Therefore, Pepsico, Inc. would have no interest in preserving DNAX Brands' ticker symbol. As such, the share structure of DNAX would be of zero consequence to Pepsico, Inc., and the thought of a merger would be ridiculous.
DNA Brands, Inc. currently has a market value of almost one and a half million dollars.
If Pepsico was interested in the energy drink recipes from DNA, they would just do a straight buyout of all shares at $0.0002, write a petty cash (for them) check to cover the three million dollar cost, take the energy drink recipes, and dissolve DNA Brands which would end the DNAX ticker.
It was probably either someone who wanted to test to see if ANY amount of 1's could be bought OR it was someone who wanted to take advantage of a lull in trading to force the current price back down to 1.
Retail traders cannot access price differentials in the 5th or 6th digit. So, that is going to be market makers trading among themselves, or some other type of wholesale trader.
Aside from pointing out that Adrian has already consulted with and chosen an advertising firm, and that the 50 grand Adrian stated was necessary for a chance at a successful reboot included the funds to pay that advertising firm, it is quite difficult (and unnecessary) to argue with what you just said.
Of course, that does not mean that Adrian... or his mortgage and utility companies... are going to agree with you. : )
It is called dilution whenever any new shares are issued REGARDLESS OF THE REASON.
Today, per Adrian's own OTC filings, there are at least 1.4 billion more shares in existence than what existed before Adrian took over the company.
Months ago, Adrian had an interest in clearing out old debt because the issuers of that debt demanded payment before they would allow Adrian to move forward with any of his plans AT THE TIME to sell off the energy drink intellectual property.
Since then, Adrian has abandoned his efforts to slice and dice and rearrange the company, and he is back to attempting to reboot the energy drink business.
In order to reboot the company, what is paramount to that effort is to obtain funding to pay for production of inventory as well as proper marketing and advertising. The old debt holders figure no place in that equation so it makes the most sense that rather than trying to get the old debt holders paid off, Adrian would be ignoring them as long as possible to shunt as many resources toward the costs of the reboot of the business as possible.
Shareholders undoubtedly want all debts paid off as soon as possible because a better asset to debt ratio makes the company have more value. More value usually translates into higher PPS.
When Adrian needs to dilute the share structure with more new shares so he has the funds necessary to pay for the reboot, why in the world would he make it a priority to have repayment of debt holders be a direct competitor for the finite amount of dilution which the market will tolerate?
When the reboot cannot occur without additional funding, it makes zero sense to be attempting to clear out all of the old debt as long as the debt holders are willing to wait.
First off, 200K does not go that far anymore, especially after taxes.
Second, the point I was arguing is not that the CEO of a startup/rebooting company should take as much as 200K of shareholder's cash as compensation, but that it is not necessarily a reasonable expectation that the CEO will take nothing. CEOs have to eat too.
So, are you saying that the only people who can be passionate about building a business are those who possess bank accounts which are large enough such that they can live on their savings for years and they can pour millions of their own money in the business to jumpstart it?
Do you realize that most entrepreneurs fail several times before they produce their first home run?
Further, during that time, many entrepreneurs dump all of their personal assets into those businesses the first time, so by the time they try again the second time and the third time and the fourth time and the fifth time, they have nothing left of their own, except for their experience and knowledge and PASSION to put into their latest business venture.
You might notice that the first year of Adrian controlling DNA Brands has already basically come and gone.
During that year, we know for sure that Adrian diluted at least 1.4 billion shares, or $140,000 worth of DNAX at $0.0001.
We have no way to know if Adrian got full price for those shares, or sold them at a discount.
I have not gone looking for it, but those interested might examine the previous year's OTC filings to see if there is any mention of "salaries" or "labor expenses" or something similar.
If anyone has been getting compensated for their efforts, it might appear on the balance sheets in the filings.
Just remember that supposedly, Adrian has hired some additional people to assist him for assorted reasons.
Clearly, given the silly topics of conversation on this forum lately, many of you are bored and have plenty of extra time on your hands. So, why not spend some of that time reading the few OTC filings which Adrian has filed to see if you can learn a thing or two?
Ok... you managed to save up enough so you could go without an income from your business for a year. What would you have done if the business was still not profiting heavily at the end of the year?
Would you fold the business, or would you figure out how to extract income from it so you could afford to continue trying to grow the business?
I know that $200K is a good hunk of change, but we don't know what Mel's living expenses were. I am not trying to justify this. I am just saying we don't know many facts.
In 2012 and 2013, tbey may have legitimately thought the business was taking off so they would now be able to extract nice salaries. That is not much different from shareholders thinking they will be able to extract nice profits tomorrow before reboot of the business has even begun. Yet, people here everyday are sure that that one magical PR is about to be released tomorrow, or next week, or next month which will push the PPS beyond a penny.
I continually try to inject some realism into the discussion specifically so people do not get unrealistic expectations. Unrealistic expectations only lead to many disappointed shareholders who then speak badly about the company, the product and the management.
I guess your point of view is that only people rich enough to go years without income should start businesses.
You are certainly entitled to that expectation. It is a completely valid view of view, and if that is your opinion, you should definitely filter your investment decisions accordingly.
I just know that lots of people with the ability to grow a successful business are not rich, must get the business to create an income for them from very early after the startup begins, and they can still generate profit eventually for their investors. In my opinion, those people should go for it.
Yes, normally you just as well type in four letters at random and then buy it if it is a valid ticker symbol. Playing low volume, low velocity Pink stocks is that risky.
The only time when profit is usually available is when hype is generated to create volume which pushes the PPS up.
Hype is not going to move an O/S of more than 7 billion shares. Just the fact that the O/S is over one billion is enough to scare away most people.
So, something else is going to have to move this ticker. Hype can help, but without real verifiable news of progress on growing the business, this ticker is going nowhere fast.
With an O/S of over seven billion, with only hype to promote the ticker, only a fool would not park the majority of their shares very close to $0.0001... like $0.0002 or $0.0003.
Hype alone is simply not going to push DNAX out of the triple zeros.
There is going to be a wall of 2's alone in the billions... and that wall will get bigger and bigger with each tick upward as reality sets in for "longs" of just how many shares have to trade just to rise to each higher tick.
Do you work for free and don't care if your bills get paid? If not, why do you expect a CEO to work for free?
DNA Brands had revenue in 2012 and 2013, and their distribution was steadily increasing.
Under such circumstances, why should not management receive compensation for their efforts?
Note that in 2014, when everything went to hell, not only did Mel and company stop taking compensation, but they financed the continued survival of the company into 2015.
Sorry... I am not seeing crooks. CEOs have to eat too.
Oh... and you should realize that DNA Brands owes someone... and that someone is almost surely Mel and company... more than eight million dollars currently secured with Series G preferred stock. That is how Adrian "bought" the company; he issued stock as a loan to cover the cost of the purchase.
So, realize that Adrian has likely been in bed with Mel and company from day 1.
We know that Adrian must dilute to raise funds to pay for the first production run.
We know that Adrian did not have these funds already.
How do we know this?
We know it because even Adrian, in his PR, did not know how many flavors of energy drink he would initially bring to market.
If he already had the necessary funds, he would not have stated that he was planning to bring between one and three flavors to marker with the first production run.
If he had funds, he would instead have specified an exact number of flavors to be produced. That did not happen.
Robcula, if you read my sticky post and the three posts referenced in that sticky posts, you will have a pretty complete understanding of the recent history of DNA Brands before the current CEO, Adrian McKenzie, too over control of the corporation.
From that information, you will understand how the deal with Big Lots was a one time deal and is not representative of what we should expect in the future.
We know with certainty that the A/S is 25 billion. The authoritative source of the A/S is the Colorado Secretary of State, and they publicly and freely share all corporate filings.
For the nearly 1 year history we have with Adrian, the general consensus is that Adrian is being honest about sharing the O/S. The last official O/S provided in the most recent filing with OTC was 7.4 billion. There is no reason to doubt that is the correct figure for the time of the filing.
Smart money would acknowledge the likely probability of dilution with the recent high trading volume. We have not yet seen an update from Adrian concerning this dilution but there will likely be an updated O/S figure included with the upcoming end of year filing. Unfortunately, that figure will not include January's dilution.
A good estimate for the current O/S is in the 8 to 10 billion range.
Adrian did verbally provide his estimate of the float during his last conference call, Unfortunately, the way he chose to define the float was an approximation of the unrestricted shares which the shareholders may be inclined to trade rather than the correct definition of the float which is a count of all unrestricted shares.
Thus, the intelligently defensive trader should consider the float to be equivalent to the O/S.
I have been saying since before Adrian even took over DNA Brands that management should dilute into the stock structure as much as NECESSARY (although only as much as necessary) to get the product line back to market WITH ENOUGH FUNDS TO DO THE EFFECTIVE JOB OF MARKETING AND ADVERTISING.
$0.0010 is probably a realistic long term (ie: years) STABLE goal, even with the current SS. There is nothing wrong with a 10x ROI.
What will happen when hype is introduced into the picture is anyone's guess, but any hype-induced spike in PPS is likely to be short lived with the weight of the bloated SS.
$0.0050 is probably asking for too much for a STABLE PPS with this SS no matter what. Again, with hype added to the mix, all bets are lottery tickets.
Okay... I just wanted to understand your use of terms.
Clearly, because corporate management and shareholders care about two completely different things, what you say is understandable.
Your PPS of $0.0010 seems a bit arbitrary to be viable as a threshold for SURVIVAL of a ticker, but that's ok... let's go with that.
For the PPS of DNAX to hold at $0.0010, the market value of the company would have to be... once any hype that got the PPS that high wears off... 10 million dollars:
If the book value of DNA got to one million dollars, which is quite obtainable, that would give DNA a market to book ratio of 10:1.
That is not a ratio that is not seen from other companies, but it is still pretty steep.
Bump the book value to 2 million dollars, and the market to book ratio drops to 5:1 which is very common among companies performing well.
Therefore, I don't see $0.0010 as an unreasonable stable PPS for DNAX... assuming they get a couple million dollars in annual sales behind them AND address the EIGHT MILLION DOLLARS of debt in the Series G Preferred stock.
As things stand right now, DNA Brands has total liabilities of about $1,900,000 outstanding (per Q3 report) PLUS the $8,000,000 in Series G Preferred stock.
So, obviously something in the magnitude of 10 million dollars of debt and liabilities has impact on valuations.
None of that is insurmountable though. DNA just has to sell a large amount of product.
My guess, when Adrian days he will work with RedChip on production is that he will work with them on ways to pump DNAX so he can actually raise the funds necessary to pay for production.
The reason I guess that is because promotion is what RedChip actually does, and pumping to support some fund raising dilution is about the only thing which I can see a promoter doing related to production.
There are TWO types of intellectual property. There are patents and there are trade secrets.
The thing about seeking patent protection is that you have reveal the facts about the intellectual property. In the case of a recipe, that can make it easy to market something that is not identical or close enough for the patent to protect the original company. However, the copy might still taste and function close enough that the copying company can knock the original company out of the marketplace.
That is why, for instance, the recipe for Coca-Cola is a trade secret, and is not patented.
However, it would really be awesome if you could take a few minutes to do a search on the United States Patent and Trademark Organization (uspto.gov) website, and let us know what you learn. : )
I have been trading OTC subpennies for years. I completely understand the dilution game.
What I stated was how DNA Brands could continue to operate without a reverse split, and that is simply that if it figures out how to operate in a profitable manner, it would no longer require additional financial assistance from shareholders.
Note that I did not say that DNA Brands WILL figure out how to operate in a profitable manner. I only said that if it DOES figure out how to operate in a profitable manner, Adrian will have no further need to dilute and therefore, he has no need to modify the share structure.
The only reason that I am even suggesting the profitable option is that it IS an option for DNA Brands because they have products that can be legitimately competitive in the marketplace. If that was not true, I would not waste the typing.
Any company that continues to play the dilution game will eventually run into a wall. Each time that they dilute down to $0.0001, the trading volume eventually dries up and they have no choice buy to execute a reverse split.
However, if they attempt too many reverse splits in too short of a time period, FINRA will reject their request for the split. If that does not happen, the PPS drops immediately back to $0.0001 post split and volume stays at zero effectively making the ticker go dormant.
Some con artists will rename the company and the ticker and try to promote themselves in a manner that stupid investors buy shares without realizing that the company had massive dilution under a different ticker name. Even then, enough people usually recognize the name of the CEO as a complete con artist that the word gets out shortly to stay away.
I have no way to know if any of these fates will befall DNA Brands and Adrian McKinzie.
The appearances so far are that he seems determined to scrape by with a bloated share structure so that he does the least possible damage to shareholders. As he has already pointed out, if a reverse split was really on his agenda, he would have just executed one immediately after taking control of the company last February. He does deserve some credit for the facts regarding what he has done, and what he could have done.
I am GUESSING that the initial production runs will not result in profitability because Adrian will likely require the economies of scale to kick in before sales revenue can cover all of the variable and fixed costs while still keeping retail sales prices competitive.
However, it should be quite possible to cover variable costs with either the first or second production run. Once that is accomplished, because Adrian appears to be very cost conscious, he likely will not need to dilute heavily to cover the fixed costs of the business before he can get distribution expanded enough to cover those fixed costs as well.
Remember that when DNA operated pre-2014, DNAX traded as an OTCQB ticker, not an OTC Pink ticker, and they managed to continue to operate for years with 300 million shares of stock outstanding with no heavy dilution. They did this with only annual sales of about $1.2 million.
All of the dilution from 300 million shares outstanding all the way up to 6 billion shares outstanding only occurred in the 18 months between July 2014 and December 2015 after the CEO at the time intentionally sabotaged the corporation in the summer of 2014. DNA operated for YEARS before that with no real dilution, and not one single reverse split in its history.
So, if Adrian can replicate the performance of the pre-2014 DNA Brands, he should be able to either stop, or strongly curtail, dilution while still growing the business.
Time will tell if he is a sufficiently good manager to pull that off.
I guess you will have to define what you mean by "survive." To me, the ticker has survived if the company has not dissolved, and the SEC has not HALTed the ticker.
DNA Brands is in danger of neither occurring to the DNAX ticker, and share structure is irrelevant to changing the probability of either of those events.
Note that trade volume and potential of profit for shareholders is irrelevant to if a ticker survives.
If DNA becomes desirable for a buyout, neither the share structure or the PPS will have any bearing on the decision of another company to purchase DNA Brands, Inc.
All that will matter is what the company valuation is, and what the total cost the purchasing company will have to pay.
In the event of a buyout, the purchasing company will either buy back all shares of DNAX, and dissolve the ticker (because the purchaser is already a public company with their own ticker) <OR> the purchasing company will reset the share structure to whatever they want it to be without any concern of effect to existing shareholders (in the case of a reverse merger by a private corporation). In other words, in the event of a reverse merger, the purchasing corporation will execute a post-purchase reverse split.
This is how DNA can avoid a reverse split: produce products and sell them at a profit so that once production is started (or certainly in a short time afterward), the business is sufficiently self-sustaining so that Adrian does not need additional financial assistance from shareholders.
That is how successful businesses operate. People here are so conditioned to having OTC Pink companies continually coming back to the shareholder well for another drink of their cash that people forget that this is not normal behavior for businesses.
I have seen others here assert that it will be many years before DNA can operate in the black. Quite simply, when the company already has an established product line... so no R&D is necessary... and no large operating expenses... because Adrian says he is operating on a shoestring... if a business cannot operate moving forward in the black relatively quickly after the products again enter the market, they have a fatally flawed business model. In that case, they need to re-examine their pricing and see what can be done to reduce costs.
The sale of the first... or definitely second... new batch of energy drinks produced ought to cover at least the business' variable costs. Shortly after, the business revenue should be covering more and more of the business' fixed costs.
With the choice of space that DNA now will occupy, and Adrian taking care to find bottlers that will drop ship to distributors, it is clear that Adrian appears to be taking care to keep fixed costs down.
That suggests that in spite of the need for Adrian to climb his beverage industry learning curve, his financial background will pay off in getting DNA into the black as early as possible.
Yes... I am quite aware of what Adrian said in his PR:
My question is what do you think it means. Clearly, the RedChip team is not a beverage bottler. So, what role would RedChip have in production of energy drinks?