18 Dec Greenfield Farms Food Inc (GRAS) – can this ticker turn its dough into dough for you?
In June of 2013, Greenfield Farms Food Inc (GRAS) became a profitable sub-penny play for members of our chat room when it ran from $.0006/share to $.0036/share in a matter of just a couple hours. It was the last good run by the ticker before dilution caused the price to drop to as low as $.0001/share over the next few months.
After hitting an all-time low of $.0001/share in October of 2013, GRAS would end up doing a 1:100 reverse split taking the outstanding share count down from 949,839,719 shares to 9,498,413 shares and resetting the share price from $.0001/share to $.015/share.
The reverse split came as part of a plan to completely change the identity of the ticker from a non-productive consumer and wholesale driven producer of grassfed beef with no revenues to a real company that owns three pizzerias in Ohio.
After the close today, GRAS filed an 8K explaining the acquisition along with all new share issuances since the reverse split.
On October 29, 2013, Greenfield Farms Food, Inc., (GRAS) entered into an Asset Purchase Agreement with COHP, LLC, an Ohio limited liability corporation to acquire certain assets and liabilities of COHP including the operations of Carmela’s Pizzeria in exchange for 1,000 shares of the Company’s Series C Convertible Preferred Stock.
The Series C shares are convertible, on a pro-rata basis, into that number of fully paid and non-assessable shares of Corporation’s common stock on terms that would equal 67% of the total issued and outstanding shares of the Corporation's common stock on a fully-diluted basis and on November 2, 2013 they were converted into 53,965,942 shares of common stock which should be restricted.
Since the reverse split, GRAS has also issued 24,234,994 shares of common stock for the conversion of convertible notes payable totaling $21,353 in principal ($.00088/share average).
That brings the total outstanding share count for GRAS to 87,699,349 as of the close today (December 18, 2013) giving GRAS a tiny market cap of just $131,000 as of today's close.
Authorized - 950,000,000 shares
Outstanding - 87,699,349 shares
Restricted - 53,696,942 shares
Free Trading (Float) - 34,002,407 shares
THE GOOD POSSIBLE SCENARIO
34,002,407 shares is a very small float for a share price of $.0015/share. Already since the 1:100 reverse split, GRAS has seen the share price drop from $.015/share to as low as $.0011/share with just over 52,500,000 shares traded.
That means many of the 24,234,994 debt note shares have probably already entered the market. As long as no new debt Note shares are issued, there may not be many more shares left to enter the market giving GRAS the potential to move back up with some decent buying interest offering some good profits.
The 8K being filed this evening might be a signal that the company is ready to bring in some awareness to start moving the share price back up.
THE BAD POSSIBLE SCENARIO
The 24,234,994 free trading shares issued towards debt only put a small dent in the $235,687 in total toxic debt Notes (mostly owed to Asher enterprises) prior to the 1:100 reverse split.
After subtracting the $21,353 in principal settled through the issuance of those 24,234,994 free trading shares of stock, GRAS still owes at least $214,334.
Because those debt Notes convert at a discount to the market price of between 40% - 50%, at the current price of $.0015/share, it would take approximately 267,917,500 more free trading shares of stock to settle those debts.... even more if the GRAS share price drops.
GRAS could issue more free trading stock at any time without telling retail shareholders causing any pumping of the stock to meet the challenge of newly printed shares entering the market. If this happens, how well the share price does will depend on how the balance of buyers vs sellers. If debt Note holders are selling faster than retail buyers can be found the price will drop. If retail buyers are buying faster than debt Note holders are selling the price will go up.
More about the New Business Operations
Carmela's Pizzeria was founded by Darren Dulsky in 2004. Darren is from New York where he worked in the pizza industry since 1991. After moving to Ohio he decided he wanted to introduce Ohio residents to New York style pizza.
Darren Dulsky currently serves as the president and COO of Carmela's Pizzeria.
Ron Heineman was assigned the role of Chairman and CEO of Carmela's Pizzeria. Mr. Heineman has several years experience investing in service sector restaurants.
According to the recent GRAS press release, Carmela's Pizzeria currently has 3 locations and will soon open a forth location.
The Carmela's Pizzeria website can be found here.
Carmela's Pizzeria is a real business with respectable executives, but the key for the GRAS share price is the convertible debt Notes.
If GRAS can avoid issuing any more shares towards debt for a while, the share price could move up really well from the current price range with good retail interest.
With enough interest GRAS could still see good gains even with some more controlled debt conversions.
Because of the potential in this one, it deserves to be on close watch especially with the 8K being filed this evening. Originally I thought GRAS might get pushed down to the triple zeroes first before any attempt to bring in new awareness to the ticker, but with the 8K being filed tonight there is a possibility the awareness might start sooner rather than later.
If planning on trading GRAS understand not only the potential, but also the risks.