DNA Brands Inc (DNAX)

[Ed the Trader]

"HOW ABOUT try doing one thing and do that thing well, then and only then maybe think about expansion."

On February 16th, Adrian released the first press release to announce he had taken over DNA. The last paragraph of that PR stated:

"I would like to thank the outgoing team, in particular founders Mel and Darren, for the opportunity to take the reins as CEO of DNA Brands. DNA Brands spent many years building countless relationships and developing our lines of proprietary blends and ingredients. Upon completion of this short reorganization, my job over the next quarter will be to identify and establish a new corporate warehouse facility, begin modifying the existing product lines, and growing the revenue and assets of the company through diversifying our verticals."

(Reference: http://www.nasdaq.com/press-release/dna-brands-inc-appoints-new-ceo-20160216-00193#ixzz47iC7IQFn)

I don't think many noticed the last clause of that last sentence. He said he wanted to be "diversifying our verticals." DNA's vertical is energy drinks... period. Once upon a time, they did have meat jerky products, but in 2014 when the company went dormant, energy drinks was it.

Between that statement in the first PR, as well as the text in the early versions of the new DNA web site, it was obvious that Adrian intends to convert DNA Brands from a specialty corporation into a conglomerate like Proctor and Gamble or Quaker Oats. So, don't be surprised to see new product lines coming into the pipe on a regular basis.

I also put this into the perspective of earlier questions about what Adrian knows about selling energy drinks. Adrian probably knows little about energy drinks, so he partnered with an existing beverage company to gain knowledge of that vertical. That way, as Accel works out the details of putting the energy drinks back onto shelves, Adrian can also work on what comes after that.

Remember, just because there are new product lines in the pipe does not mean that there must be much cash or time spent on them. It just means that Adrian has identified what he thinks would next make DNA Brands some money.

It will be interesting to see how this plays out...