Since filing their 10-K for the year ended September 30, 2012 on January 15, Citadel EFT, Inc. (OTC: CDFT) has taken their investors on a rocket ride. Volume surged immediately with two back-to-back sessions where CDFT stock broke past the 20 million share mark gaining over 250% in two days. With hints of uplisting to the NYSE Amex exchange, a recent purchase of sports memorabilia and an agreement to purchase a villa in the Dominican Republic, one has to wonder if the husband and wife team are looking to stick to the plan of making money on credit card transaction services or making a dash with the cash while penny stock traders get left holding the bag.
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CDFT Stock Chart
Market Cap: 1.43M
Last: 0.0061 ▲ 0.0013 (27.08%)
Volume: 9,053,000
Dollar Volume: $52,210
Open: 0.005
High: 0.0065
Low: 0.0048
Trades: 91
Authorized: 1,000,000,000
Issued and Outstanding: 233,824,960
Gary DeRoos, CEO: 168,501,551
14-Day Rel Strength: 66.10%
14-Day Stochastic: 90.24%
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Historically, since 1989, Citadel EFT focused its efforts on offering credit card transaction processing and merchant account services to businesses located in North America. They have been mediocre at this with revenues for the past two fiscal years ended September 30, 2012 and 2011 of $493,442 and $459,770, respectively. What they have been horrible at is generating positive cash flow and compensating their husband and wife directors, Gary DeRoos (51), President, CEO, Secretary, CFO, Principal Accounting Officer and Director, and Maria Teresa DeRoos (47), Director.
Here’s where “common sense” starts to kick in and question WTF is really going on with CDFT stock:
CDFT stock began trading in mid-2011 and broke past the 2 million share volume mark only twice until November 30. On that date, the Company announced that they had hired Lorin Rosen as their primary securities attorney to assist with uplisting Citadel EFT to the Amex market. Volume suddenly spiked to 13.86 million and the share price jumped from .0014 to .0078 before closing at .0041. In dollar figures, even at the HOD, total dollar volume was less than $110,000.
What’s pear shaped is where all the shares trading suddenly came from.
As per the recently filed 10-K for the year ended September 30, 2012:
Dividends
During the year ended September 30, 2012, Citadel declared and paid dividends totaling $160,000 on the shares of Series A Preferred Stock to Company CEO, Mr. Gary DeRoos, the owner of all the outstanding preferred shares of the company.
Common Stock
During the year ended September 30, 2012, Citadel issued 11,500,000 common shares to various consultants for services and recorded them as compensation expense of $1,408,850 based on the closing prices ranging from $0.03 to $0.16 per share on the issuance dates.
Furthermore, Citadel issued 27,500,000 common shares to various consultants for services also recording them as compensation expense of $495,000 based on the closing price of $0.018 per share on the issuance dates of the shares.
During the year ended September 30, 2011, the Company issued 71,000,000 common shares of CDFT stock to Gary DeRoos for services rendered, recording them as compensation expense of $3,550,000 according to the latest private placement per share amount of $0.05 given the common stock was not traded on an exchange. WTF!?
During the same year ended, DeRoos also was also issued 100,000,000 shares of CDFT stock for services rendered which were also recorded as compensation expense in an amount equal to the fair market value of $13,500,000 according to the closing price of $0.135 per share on the date of issuance. Are you serious? $17,000,000 in compensation expense to the “man of the house” while the Company booked less than $500,000 in revenues?
In November 2012, Citadel issued 1 share of Series B preferred stock and another 40,000,000 shares of Series C preferred stock Gary DeRoos for who knows what except what can only be considered compensation expense.
What’s even more puzzling is that since making apparent attempts to convince shareholders that the Amex is where Citadel EFT is headed to, the Company, on October 11, 2012, agreed to purchase various sports memorabilia from Art to Go, Inc. with a fair market value of $10,389,046 by issuing 4,000,000 Series C Preferred shares.
If that wasn’t enough, on January 24, 2013, Citadel EFT announced they were buying villa 613 in the Casa Linda development located in sunny Cabarete, Dominican Republic. The PR stated that the 10,000 square feet, 5 bedrooms, 6 bathrooms property represents an attractive rental opportunity to Citadel and its shareholders.
If you use some common sense to put the pieces of the puzzle together, it all looks like the retirement plans for the husband and wife team are in full effect, all on credit ironically, and the man cave has more than enough appraised value sports memorabilia that can be displayed while sipping some piña coladas.
Never did understand why rich people have more bathrooms than bedrooms. Must have something to do with what they are full of.
About CDFT Stock
Citadel EFT, Inc. provides credit card terminals and merchant account services to approximately 1,700 businesses located in North America as of December,2012. Click here to view the SEC filings for CDFT, here to view the Press Releases.
Last 5 Trading Sessions:
| Date | Last | Change | % Change | Volume |
| 02/08/13 | 0.0061 | +0.0013 | +27.08% | 9,053,000 |
| 02/07/13 | 0.0048 | +0.0013 | +37.14% | 2,461,700 |
| 02/06/13 | 0.0035 | unch | unch | 6,165,300 |
| 02/05/13 | 0.0035 | -0.0012 | -25.53% | 6,141,800 |
| 02/04/13 | 0.0047 | +0.0007 | +17.50% | 10,204,300 |
Bottom Line: CDFT has been a great penny stock t trade in recent weeks for those willing to risk $150. Based on the analysis of what drives the Company for future growth, its sad to say that when this flame fizzles out, those who drank the CDFT stock kool-aid wont have that nice rum induced buzz you can only get by taking profits before the pineapples go sour.
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