While it may be up to the individual investor to determine what has triggered the incredible volume surge in Tranzbyte Corporation (PINKSHEETS: ERBB) there are certainly some factors that would indicate that the company’s recent activity has little to do with the sudden interest. Already this week ERBB has produced days of 58 million and 62 million in volume and have exceeded the 181 million mark on Wednesday, the kind of levels that would seemingly be built on positive announcements and achievements; sadly for shareholders that is not the case.
What ERBB did announce today was that they will begin distribution of its Automated Marijuana Vending Machine within qualifying states and locales beginning next quarter. It doesn’t even matter what side of the fence you stand on when it comes to the legalization of marijuana, this announcement has to raise some red flags.
ERBB says they can’t release some of the details of the machine’s operation due for “competitive reasons” yet they believe all systems are go as they have been “at work for the past year identifying and working with a vending machine manufacturer that has the technological background and capability to exclusively deliver the Altitude Organix “Green Machine” – designed specifically to serve the exploding cannabis industry in the 21st Century with a complement of exclusively available Zazzz™ products coupled with state-of-the-art security enhancements.”
What is known about the vending machine is that its technology will be integrated with embedded radio frequency technology (RFID) produced in association with ERBB’s subsidiary, ProximaRF, which is “spearheading efforts to make the machine function for legally qualified individuals only.” If it sounds too good to be true that ERBB has found a way to integrate the operations of their subsidiaries it’s probably because it is.
Considering the fact that ERBB hasn’t generated any revenues over the past six months there has to be some questions regarding the viability of ProximaRF, a company founded in 2006 and acquired by ERBB in January of last year for 6,500,000 Preferred Series C shares of the company at a par value of $1 per share.
It will be ProximaRF, a company that hasn’t helped the ERBB’s bottom line one bit, who will be the driving force behind “The Integrity Chip,” the RFID-based tracking system for cannabis inventory that will give law enforcement better visibility into the distribution of the regulated substance. If you believe this there is a good chance you have been sampling some of the products that ERBB intends to distribute.
Obviously ERBB will need to be well financed to roll out this phase of their operations and with a reported $1,269 in cash on hand according to their latest financials there could be a problem. Needless to say ERBB notes that they will be seeking financing for this rollout and that means one thing to shareholders, dilution.
Shareholders of ERBB are already dealing with enough dilution as it is and any new financing deal that involves the transfer of shares for capital will only paralyze their position further.
Beyond the questions surrounding the legal issues that ERBB will have to clear before one of their vending machines ever dispenses marijuana is the fact that the company simply isn’t capable of offering investors any value at the moment. With so many shares being dumped into the market there is almost no chance that the company’s stock price can sustain even the slightest increase.
This has been made evident in today’s activity as ERBB climbed to a high of 0.0090, a one month high for the company, but they have slipped back down to around the 0.0073 mark which is below their open of 0.0080.