[[tagnumber 0]][[tagnumber 1]]After a good run in the middle of the year that saw the stock of Black Stallion Oil and Gas Inc (OTCMKTS:BLKG) go above the $2 per share mark the ticker began to slide, losing more than 90% off its value by the middle of this month.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]This wasn’t that surprising when you consider some of the first things that you will see when you start doing your due diligence on [[tagnumber 6]]BLKG.[[tagnumber 7]] First of all, we would like to remind you that the company posted its financial report for the third quarter this week and it contained the following numbers.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 11]] [[tagnumber 12]]cash: $31 thousand[[tagnumber 13]] [[tagnumber 12]]total assets: $56 thousand[[tagnumber 13]] [[tagnumber 12]]total liabilities: $4.1 thousand[[tagnumber 13]] [[tagnumber 12]]revenues: ZERO[[tagnumber 13]] [[tagnumber 12]]net loss: 77 thousand[[tagnumber 13]] [[tagnumber 22]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]We do see that the cash on hand situation has improved, but $31 thousand is still very little for a company that boasts a market cap of nearly $10 million. A good sign is the fact that the total liabilities have been significantly reduced, but the fact that the company is still incapable of generating revenues while the net loss has increased more than seven times compared to the same period last year is pretty scary.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]This might be the exact reason for which [[tagnumber 6]]BLKG[[tagnumber 7]] came sliding back down after trying to regain some lost value in the beginning of the week. The ticker lost 12.13% during yesterday’s trading and closed at $0.21 while a total of 539 thousand shares changed their owners and generated $112 thousand in daily dollar volume.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Considering the big market cap and the shy financials we may see [[tagnumber 6]]BLKG[[tagnumber 7]] drop further down the charts so be sure to do your due diligence and weigh out the risks before putting any money on the line.[[tagnumber 2]]
[[tagnumber 0]][[tagnumber 1]]This year has been a rollercoaster for Alkaline Water Company Inc (OTCMKTS:WTER) and its stock. Unfortunately, the latest months have seen the ticker decline and it doesn’t seem like there is enough to push it back up again.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]This week has proved no different. Meanwhile, the company issued their financial report for the second quarter of the fiscal year 2016. The report covering the period ended September 30 contained the following numbers of prime interest.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 9]] [[tagnumber 10]]cash: $38 thousand[[tagnumber 11]] [[tagnumber 10]]current assets: $963 thousand[[tagnumber 11]] [[tagnumber 10]]current liabilities: $2.2 million[[tagnumber 11]] [[tagnumber 10]]quarterly revenues: $1.71 million[[tagnumber 11]] [[tagnumber 10]]quarterly net loss: $994 thousand[[tagnumber 11]] [[tagnumber 20]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]We see that the company’s cash on hand positions have gotten worse, while the total liabilities have increased. Fortunately, so have the revenues and the net loss has been lowered significantly compared to the previous quarter.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Still, the filing didn’t manage to boost investor confidence and we saw [[tagnumber 28]]WTER[[tagnumber 29]] slide 11.95% down in yesterday’s session and close at $0.07. A total of 1.25 million shares changed their owners and generated $91 thousand in daily dollar volume.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Due to the lack of new press releases we might see [[tagnumber 28]]WTER[[tagnumber 29]] sink even further down the charts so be sure to do your due diligence and weigh out the risks before putting any money on the line.[[tagnumber 2]]
Some of you will open Decision Diagnostics Corp (OTCMKTS:DECN)’s latest financial statement and they’ll probably think that the company has come a long way. They’ll see that the Q3 revenues are almost 500% up from on the ones logged twelve months ago and they’ll also see that the long lasting legal struggles with Johnson & Johnson might finally be coming to an end. In fact, DECN say in the report that they’re preparing themselves for the final dismissal of the patent infringement claims filed by the medical giant, and that they’ll then proceed to look for the damages made by the whole proceedings.
Investors have certainly read these parts of the latest report and they’re loving them. The statement came out last week and although there was a brief moment of hesitation at the beginning, the ticker eventually stabilized and began climbing. Six consecutive green sessions later, it reached a close of $0.17 for the first time in almost exactly five months.
So, people have taken a quick look at the report and they seem to like what they see. The Thanksgiving holiday, however, should give them a chance to look through the statement in more detail which probably isn’t such a bad call as it might give them an inside into some interesting details.
The first one is eye-achingly obvious. Despite the impressive revenue jump, DECN‘s financials are far from ideal:
- cash: $543 thousand
- current assets: $2.6 million
- current liabilities: $3.4 million
- quarterly revenues: $112 thousand
- quarterly net loss: $242 thousand
And while the Q3 sales look good, the same can not be said about the revenues logged during the first nine months of 2015. At $292 thousand, they are actually 22% down from the ones recorded during the same period of last year.
If you decide to inspect the report even more closely, your attention might be drawn to the fact that at during the first three quarters of 2015, DECN issued a fair amount of Series E Preferred shares for a variety of reasons at rates ranging from $0.19 to $0.25 per share.
This doesn’t sound too bad. Until, that is, you find out that every single one of the Series E Preferred shares (there were 687,540 of them at the end of September) can be turned into 14 common shares. Basically this means that in the very near future a rather significant amount of common stock might see the light of day at an effective price of less than $0.02 per share.
These are all things you should probably consider carefully before you put your money on the line.
This Tuesday the stock of Premier Biotech Inc (OTCMKTS:BIEI) soared up the chart by close to 42%. As a result it closed at $0.022, one the highest closing prices for the company. Whatever positive momentum had formed though was quickly offset by the quarterly report that was filed that day.
It showed that as of September 30 BIEI had:
• $73 thousand cash
• $87 thousand total current assets
• $516 thousand total liabilities
• ZERO revenues
• $189 thousand net loss
BIEI‘s CEO may have stated that the company has “a clear roadmap for potentially curing cancer” but a balance sheet such as this is hard to be ignored. Especially if you remember that in our previous articles we warned you about the numerous convertible notes that could become shares at rather sizable discounts to the market price – from 32% to 40% depending on the terms of the note.
While during the quarter covered by the report the issued shares were kept to a minimum with a little over 26 million outstanding shares as of September 30 that was no longer the case with the start of October. From the very first day of the month up to November 17, the period covered by the subsequent events section of the quarterly, $95 thousand worth of convertible notes were turned into approximately 39.5 million fresh shares. This makes the average price of each share just $0.0024.
At the end of September BIEI had outstanding convertible notes totaling $133 thousand so the dilution could be running for a while longer. The company will also need to find new sources of capital in order to fund it operations and there are no guarantees that this time the terms of the financing deals will be any better.
If you are determined to play the stock of the company it is paramount to take into account the effect the millions of underpriced shares could have on the performance of the ticker if they get unleashed on the open market.
XLI Technologies Inc. (OTCMKTS:MYXY) added another impressive 13.16% to its market value yesterday, for a grand total of $0.86 per share. However, there are indicators that this jump may come to a screeching halt before long.
So what might those indicators be? Well, first of all, even superficial due diligence reveals the staggering mediocrity of the numbers in MYXY‘s latest financial report:
- NO CURRENT ASSETS
- Total Current Liabilities – $101 thousand
- NO REVENUE
- Net loss – $10 thousand
Those numbers hardly seem like they should belong to a company, who is currently valued at $64 MILLION on the OTC Markets. They reveal an appalling idleness, or incompetence – it’s not clear which one of those caused what we’re seeing here.
Frankly, if these achievements are indicative of MYXY‘s management’s business acumen, it is a miracle that the ticker has managed to even start climbing the charts. All things considered, that’s a huge red flag.
Unfortunately, as hard as that may be to believe, this is not even the most noteworthy thing to watch out for that the company’s recent filigns can reveal. The 8-K that MYXY filed just three days ago announces that on Oct. 14, 2015, the company’s founder has sold 50 MILLION shares of MYXY‘s common stock to a Mr. James Schramm, who is now MYXY‘s president and CEO, for just $20 thousand.
That fact sort of speaks for itself. Investors should really heed what it is saying about the company and tread lightly.
You may or may not remember that there was once a TV show called Extreme Makeover in which normal individuals who don’t really fit into the modern society’s idea of beauty are taken to Hollywood and, with the help of copious amounts of money, are made to look like TV stars. Unfortunately, there is no such show for penny stocks, but despite this, numerous investors reckon that every now and then, one of the many OTC ducklings gets turned into a beautiful swan. Is this what’s going on with Hydrophi Technologies Group Inc (OTCMKTS:HPTG) at the moment?
Apparently. The company announced through a rather sizable 8-K form on Tuesday that it’s going through a reverse merger. The acquisition target is a company called Pro Start Freight Systems and, as you might have guessed already, it’s a freight company.
Investors were really happy with the news. The 8-K in question came out only about an hour before November 24’s closing bell, but even in that short period of time, it managed to push the stock almost 74% up to a close of $0.004. Although it closed yesterday’s session 25% in the red at $0.003, it reached an intraday high of over half a penny for the first time in over five months and it also logged a pretty substantial volume. At first glance at least, there is a very good reason for this.
Surprisingly or not, HPTG decided not to issue a press release dedicated to the merger, but they did say in the 8-K that Pro Star’s management has reported annual revenues for last year of $27.3 million and a net income of $660 thousand. By contrast, at the end of their most recent fiscal year, HPTG recorded about $278 thousand in revenues and a loss of more than $2.7 million.
So, the news is very good and people have every right to be excited. That’s true enough, but there might still be one or two things worth bearing in mind.
Investors are clearly ecstatic with the figures published in the 8-K, but some of them might be forgetting that the audited financial statements of HPTG‘s new subsidiary won’t be out for another two months. There’s also some questions around the surviving entity’s debt.
The 8-K says that some of the company’s older toxic notes have been canceled, but it also says that some new ones have been issued. Some more concrete information on these would be very helpful for investors and shareholders alike because the ones who have been following the company for long enough know that HPTG has had problems with toxic debt-induced dilution.
During the second and third quarter of this year for example, the company was forced to issue more than 166 million shares at an average price of $0.0016 in order to convert $280 thousand worth of debt. On September 30, the principal amount outstanding under the various notes was exceeded $1.4 million and on October 12, HPTG turned around $17 thousand of it into more than 33 million shares for a conversion rate of $0.0005 per share.
So, basically, while HPTG might look good on the outside, at least until a financial statement comes out, investors can’t really be sure whether its beauty is more than skin-deep.
In yesterday’s session Max Sound Corp (OTCMKTS:MAXD) slipped hard around noon, pushed over the edge by a press release. The company announced Google’s motion to dismiss MAXD‘s complaint was granted by the court, based on the standing issue. By the closing bell MAXD found itself nearly 23% in the red on its biggest daily volume for the past 52-weeks.
The sell-off that took place yesterday is in a way understandable. MAXD is not exactly doing a stellar job on the business side of things, with a disappointing quarterly that went up in mid-November, and the company’s biggest bet seem to be the patent infringement lawsuits that it is throwing about.
The reason for the slip is that things are not going too well with MAXD‘s lawsuit against Google and Youtube in the USA for patent infringement on technology patented by MAXD. After Google filed a motion to dismiss MAXD‘s complaint, with the allegation that the claims in it were invalid, only this Tuesday the court issued an order, granting Google’s request based “only on the standing issue”.
MAXD is, naturally, going to appeal the court’s decision, but given the pace at which this sort of issue is usually resolved, it will likely be a while before investors can get any closure on the matter.
There is little to be excited about the company’s performance looking at its latest balance sheet. Here is the brief summary of MAXD‘s balance sheet that was published on Nov 13:
- $20 thousand in cash
- $7.4 million in current liabilities
- ZERO in revenues for Jan – Sep 2015
- $7.5 million in net loss for Jan – Sep 2015
There is also the matter with the delicious discounted convertible debt detailed in the report, with provisions to convert into shares at discounts ranging from 25% to 40% from the lowest trading prices of MAXD stock 10 to 20 days prior to conversion.
Agrieuro Corp. (OTCBB:EURI) made another astounding leap yesterday, even though it was powered by just one paid pump e-mail.
Without a doubt, this is the hottest pump-jump currently on the OTC Markets. Every time the volume seems like it is going to go down, the ticker explodes and even more shares change hands, pushing tEURI ever onward.
Suffice it to say that the outfits SmartStockWinners, SmartStockChoices and Best American Stocks, as well as a few others, have done miracles for EURI‘s volatility and market cap over the last few weeks. Yet, this all seems familiar, somehow…
Anyone who’s kept a close eye on the OTC Markets in the last six or so months is probably having a deja-vu right now. No, my friends, your brains are not deceiving you – something very similar has happened before, in the not so distant past. The charts are staggeringly similar, the story is virtually the same, the main cast is almost unchanged, only the star of the show – the target of the pump – is now another company.
But which OTC Markets drama was the original one, you may ask?
Well, America Resources Exploration Inc. (OTCMKTS:AREN), of course! It was heavily promoted at the beginning of Q3, 2015 and while the pumpers’ efforts lasted, millions upon millions of its shares changed hands. We provided an extensive coverage of the whole ordeal – from its spectacular beginning, all the way to its bitter end.
The similarities between these two cases are just too many do dismiss out of hand. Both companies had mediocre-looking financials. Both were the hottest thing on the market for quite a while when the pump e-mails started flowing, and managed to maintain their pole position for longer than seemed possible.
Which is the main reason to believe that their ultimate fate will also be the same. Investors should definitely take that possibility into account, and act accordingly.
After a double-digit drop in yesterday’s session, NanoTech Entertainment Inc (OTCMKTS:NTEK) stopped at its lowest closing price for the past 52-weeks. As the ticker slid 10% down the charts, NTEK found itself wedged well within double-zero territory, at $0.0063 by the closing bell. Volume remained above the monthly average, at nearly 17 million shares traded.
The company is struggling after another lackluster report for its first fiscal quarter. NTEK‘s latest press release that came last Thursday and announced what was supposed to be yet another batch of exciting news concerning NTEK‘s Ultraflix 4K HD streaming service. In addition to new availability options on a wider range of TVs, the PR highlights another expansion of the Ultraflix catalog, with Terminator Salvation the main point of interest. The Ultraflix catalog probably needs a lot more than a six-year old Terminator movie to become a proper revenue engine for NTEK, considering it’s still made up primarily of 15-to-30 year old movies.
NTEK‘s latest report is the quarterly for the first three months ended September 2015. Here is the brief summary of the report’s balance sheet:
- $46 thousand in cash
- $2.4 million in current liabilities
- $3.8 million in quarterly sales
- $525 thousand in quarterly net loss
It’s somewhat surprising that NTEK‘s cost of revenue is so high, at $3.2 million. Additionally, the biggest part of expenses is comprised of Payroll, amounting to $648 thousand. Obviously, even if shareholders have to watch their investment slink to 52-week lows, at least NTEK employees are getting paid well. For its previous fiscal year NTEK recorded $2.49 million in Payroll expenses, on $11.1 million in gross sales.
The company’s outstanding shares grew from 1.11 billion in late June to 1.37 billion in late September.
[[tagnumber 0]]Shares of Speed Commerce, Inc. (NASDAQ:SPDC) tumbled to at least a five–year bottom within just a few sessions last week after the company released its third quarter report. The numbers in it suggested the company is running fast out of cash and could even need to sell out the business very soon, while the new shorting activity this week also does not suggest the stock could recover.[[tagnumber 1]] [[tagnumber 0]][[tagnumber 3]][[tagnumber 1]] [[tagnumber 0]]SPDC closed yesterday at $0.125 for a share, which is a nearly 67% gain from the previous close. The trading volume was far above the average but still not a record for the stock. Though this huge jump, SPDC share price could not break a resistance throughout the entire session yesterday, thus the chart does not look like there could be a rally for the stock.[[tagnumber 1]] [[tagnumber 0]]At the end of September, SPDC announced it had extended its contract with the Yankee Candle Company by another five years. That was not of any importance though as the latest quarter report shows the company is in a very bad financial condition and is still making huge losses each quarter. The net loss was almost $26 million compared to $1.62 in the previous quarter.[[tagnumber 1]] [[tagnumber 0]][[tagnumber 10]][[tagnumber 1]] [[tagnumber 0]]Even worse are the negative operating cash flows which are not improving, which means that SPDC will further rely on debt and equity financing to cover its need for cash. The working capital gap increased by $100 million in the third quarter after some portion of the debt became due within the current three months. Moreover, an amendment of the terms included a covenant that the company enters into an agreement to sell all of its business by the end of the year if it does not make the required payments to the creditors.[[tagnumber 1]] [[tagnumber 0]]During the last two quarters, SPDC issued over 9 million shares of convertible preferred stock. Another 13 million shares of common stock were issued in an equity and warrants offering that raised $6.8 million in April, however, by the end of September the company had only $2 million in its cash account.[[tagnumber 1]] [[tagnumber 16]] [[tagnumber 1]]