[[tagnumber 0]][[tagnumber 1]]The most recent performance of Limitless Venture Group Inc (OTCMKTS:LVGI) is quite impressive as the ticker has finished the last nine sessions in a row green. And although the daily gains were quite big we can’t say that we are particularly impressed.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]That is because in the beginning of the month the ticker was trading almost at rock bottom with a price of $0.0003 per share. The company stock was escorted there by many things. [[tagnumber 6]]LVGI [[tagnumber 7]]has been promoted numerous times in the past, it has tried the medical marijuana card but has failed to produce any products and there aren’t even press releases concerning that, and it has terrible financial results.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 11]] [[tagnumber 12]]cash: $19 thousand[[tagnumber 13]] [[tagnumber 12]]current assets: $24 thousand[[tagnumber 13]] [[tagnumber 12]]current liabilities: $1.9 million[[tagnumber 13]] [[tagnumber 12]]revenues: ZERO[[tagnumber 13]] [[tagnumber 12]]quarterly net loss: $125 thousand[[tagnumber 13]] [[tagnumber 22]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Those are some pretty dreadful numbers even by OTC standards. But those are not the only problems with [[tagnumber 6]]LVGI[[tagnumber 7]]. Anyone who has followed the company knows about the massive dilution. The latest quarterly report lists the outstanding share count at 3,148,641,800 out of 3.5 billion authorized, which means that around 660 million newly printed shares have seen the light of day between June 30, 2014 and March 31, 2015.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]As we said earlier the company tried to generate some hype for its stock by announcing that it will be entering the legal cannabis industry. There is no talk in that direction for quite some time now and from the most recent press releases we understand that [[tagnumber 6]]LVGI [[tagnumber 7]]has moved into the alcoholic beverage industry.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Speaking of press releases [[tagnumber 6]]LVGI [[tagnumber 7]]isn’t too busy making announcements. We have actually seen only two PR’s since the beginning of the year and the latest was posted back on March 31. This leaves the most recent run which pushed the price to $0.0012 after a 33.33% gain yesterday with no obvious explanation.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Considering all the red flags and the lack of obvious reason behind this run should keep investors on their toes. Be sure to do your due diligence and weigh out the risks before putting any money on the line.[[tagnumber 2]]
About half an hour before yesterday’s opening bell, Stevia First Corp (OTCMKTS:STVF) issued a press release. The management team proudly announced that they have completed a private placement during which they have sold about 5 million shares at a rate of $0.30 a pop. Some warrants were issued as well which could potentially bring in even more proceeds.
Apparently, investors are pretty happy about the news. In a matter of six and a half hours, they traded more than 640 thousand shares which resulted in a dollar volume of about $126 thousand. They also pushed the ticker up by a healthy 41% which means that STVF closed the session with a price of $0.24 per share.
Quite an achievement, you have to agree, and it’s not difficult to see why people got so excited. While the names of the investors taking part in the private placement are not disclosed, they are labeled “institutional investors”. And if institutional investors are ready to fork out $0.30 for STVF‘s stock, why wouldn’t regular retail investors do it? But is there anything else to suggest that STVF is a good place for your money?
The chart at the beginning of the article might be a bit of a turn off for some people. Prior to yesterday’s jump, STVF logged five consecutive red sessions during which it dropped from $0.28 all the way to $0.17. And if early trading today is anything to go by, the bounce isn’t going to last. About seven minutes after the opening bell, the ticker is sitting at $0.20 (16% in the red).
And while some people might still be a bit excited about yesterday’s press release, they should probably bear in mind that the news isn’t actually new. The private placement was first announced on May 6 and it was accompanied by an 8-K form detailing the deal. Curiously enough, nobody reacted to it back then.
As for the latest 10-Q, it has its good points, but it also has its not-so-good points. Here are the figures recorded at the end of last year:
- cash: $1 million
- current assets: $1.1 million
- current liabilities: $1.6 million
- quarterly revenues: $59 thousand
- quarterly net loss: $1.1 million
You can see that even without the private placement from three weeks ago, the balance sheet isn’t really that horrific. There is some cash in the bank, and although there is a working capital deficit, most of the current liabilities consist of derivatives. There’s no toxic debt, either.
Unfortunately, the income statement is a bit of a different story. The sales are not massive and that’s understandable. After all, STVF only started generating revenues a couple of quarters ago. In light of this, the net loss isn’t that much of a shock, either. The problem lies with the fact that in the Results of Operations, the management team said that they expect sales to continue “at approximately this rate”.
If they want to guarantee a more consistent performance for their stock, they’ll need to put something a bit more encouraging in their future financial statements. They also might want to come up with a newer and more substantial piece of news. Until they do it, putting your money on the line will be accompanied by quite a lot of risks.
During yesterday’s trading the stock of WindStream Technolog (OTCMKTS:WSTI) continued to crash down the chart this time losing another 13.8% of its value and closing at $0.0405. The letter to the shareholders that was issued on May 19 did manage to lift WSTI upwards but the positive momentum lasted for only two days and after yesterday’s trading the stock has wiped all of its gains.
It seems that investors are reluctant to put their trust in the company. Well, when you take into account the rather serious red flags that surround the stock the negative chart performance becomes far less surprising. March was announced as the best month in the entire history of the company but despite that their financial state remains extremely depressing. The quarterly report covering the period revealed that at the end of March WSTI had:
• $192 thousand cash
• $4.7 million total current assets
• $10.2 million total current liabilities
• $968 thousand sales
• $987 thousand net loss
The revenues did indeed enjoy a massive increase but that doesn’t mean WSTI have stopped taking on more convertible debt. On the contrary, $450 thousand worth of convertible notes were sold during the quarter bringing the total amount of convertible notes payable to nearly $3.5 million as of March 31. In April WSTI sold another $200 thousand new convertible notes.
Since the start of the year 13.7 million shares have been issued through conversions at an average price of just $0.031. As of May 12 WSTI had 112 million outstanding shares. Keep in mind that the company actually has an unlimited amount of authorized shares so they can issue as much as they want.
Even if you believe in the potential of WSTI’s SolarMill and TowerMill clean energy solutions you shouldn’t approach the company without doing your own due diligence.
After a 9% drop in yesterday’s session the stock of Celsius Holdings, Inc. (OTCMKTS:CELH) landed a notch below its position before last week’s spike. The stock briefly touched highs of over three dollars per share over the past couple of months, but last closed at $2.35 per share.
CELH is a manufacturer of soft drinks with a health and fitness focus. The eponymous Celsius drink is advertised and sold as a ‘zero calorie’ beverage, with the twist being that it does not burn calories by itself but instead promotes fat loss during exercise.
The latest report from CELH is a quarterly for the three months ended March. The brief rundown of the balance sheet is as follows:
- $232 thousand in cash
- $1.9 million in current liabilities
- $4.6 million in Q1 revenues
- $245 thousand in Q1 net profit
Those revenue figures may look over the top for a pink sheet business but CELH was formerly a NASDAQ-traded entity. A late 2010 issue with shareholder capital requirements of the exchange led to a voluntary delisting.
The reason the company climbed over $3 per share in the first place was the announcement of a $15.9 million investment led by a prominent Chinese venture capital firm and a couple of US media icons. The impact of the news may have run its course, though, judging by the difficulty CELH has clinging to its new highs.
CELH is currently flat, a fraction of a percent up in early trading.
Hangover Joe’s Holding Corporation (OTCMKTS:HJOE) lost another 10% of its market value yesterday, on an even more meager dollar volume than it registered on Friday – and judging by today’s red opening, the session to follow may end up even leaving it even worse for wear.
The fact that just 45 million shares changed hands in yesterday’s session is symptomatic of HJOE‘s current position. Evidently, the company’s shareholder base isn’t as loyal as MicroCapDaily makes it out to be, because the ticker is already headed down, hard.
But that is understandable. As time passes, hype dissipates and more and more investors come to their senses and realize that HJOE has quite a few red flags pulling it down.
As MicroCapDaily put it at the end of its otherwise optimistic report “HJOE has little cash on hand and minimal revenues to date as well as significant rising short term debt”. Suffice it to say that this would be an excellent way to start describing HJOE‘s current situation, but is hardly sufficient in and of itself. Why?
First off, it fails to mention the fact that HJOE has been negligent in its obligation to inform investors and the SEC of its current financial status. Put simply – it is late in filing its 10-Q for the first quarter of 2015, which has earned it the “Limited Information” label that currently marks its OTC Markets profile.
And it’s not like said report is not important – it was to show investors what the company had achieved in the three months that followed its unimpressive 10-Q:
- Cash – $48 thousand
- Current Liabilities – $2.8 million
- Quarterly Revenues – $48 thousand
- Quarterly net Loss – $592 thousand
But perhaps even more importantly, the new 10-Q was supposed to throw some much needed light on HJOE‘s share structure. Suffice it to say that HJOE‘s common stock has ballooned form 208 million as of Oct. 06, 2014 to approximately 1.7 billion less than two months ago. The report was supposed to inform investors as to how much more dilution has poisoned investor value in the meantime.
In summary, HJOE seems to have lost its volatility, which was probably the only thing the company had going for it.
When the market opened yesterday the stock of Minerco Resources Inc (OTCMKTS:MINE) dropped into the red almost immediately and it seemed that it would stay there. MINE had other plans though and issued a new PR that caused their stock to suddenly surge up the chart. In just three hours the ticker moved from a low of $0.0045 to a high of $0.0053.
The company revealed that their new line of products called The Herbal Collection is in the final stages of research and development. Although the news is undoubtedly positive and it did cause the stock to close in the green the reaction from the market was rather subdued. In fact MINE did take a step back right before the closing bell finishing the session at $0.005 with a gain of a little more than 6%.
We reckon that investors could have been much more impressed with the company’s progress if it didn’t take MINE nearly a year and a half to get here. As the PR states after 16 months the formulation and the packaging of the initial product has just been finalized. The new product line will be led by an all-natural Green Tea with Honey drink, containing CBD in a micellized format. Will this be enough to entice investors to jump back in though?
So far 2015 has been a tough year for the long-term shareholders of the company. In mid-January MINE did reach a high of over $0.12 but since then stock has been steadily going down the chart currently sitting almost 60% lower even after yesterday’s gain.
The latest financial report submitted by the company covers the quarter ending January 31, 2015, and it contained the following:
• $137 thousand cash
• $1.5 million current assets
• $3.39 total current liabilities
• $740 thousand revenues
• $1 million loss from operations
• $2.1 million net loss
With a working capital deficit of over $1.8 million, mounting losses and minimal cash reserves it is obvious that MINE is not in an encouraging financial state.
Another huge red flag that investors must take into account is the continued dilution of the common stock. As of October 31, 2014, MINE had 2.8 BILLION outstanding shares but as of January 31, 2015, that number had surpassed 3.27 BILLION. 254 million of the freshly printed shares were issued as a conversion of notes at prices ranging between $0.00025 and $0.00255. Just in January another 183 million shares were issued through the conversion of preferred B shares. As of March 23 MINE had 3,342,057,455 outstanding shares out of the 3.5 billion authorized.
Recently the company did announce that it has divested its energy holdings in a deal that should bring MINE $715 thousand in the next twelve months. The accrued liabilities were also reduced by around $300 thousand but investors should note that this was achieved through the issuance of more preferred B shares. A PR from May 6 announced that MINE has increased its stake in Avanzar Sales and Distribution, LLC by an additional 24% to a total of 75%. As part of the deal though the six existing members of Avanzar received 336 thousand preferred C shares.
The next quarterly report should be filed by June 15 and it will most likely determine the direction of the stock. If even more shares have seen the light of day at heavily discounted prices the excitement generated by the new product line might not last for very long.
After two days of volume accumulation, on Monday the share price of BioElectronics Corp. (OTCMKTS:BIEL) clambered out of triple zero land. BIEL closed another 52% up, stopping at $0.0013 per share after 170 million shared changed hands yesterday.
The company is a pink sheet that produces and sells pain relief devices which utilize electromagnetic pulses to heal painful areas. Why its stock jumped the way it did over the last couple of market sessions is not so easy to answer, though.
BIEL‘s last press release came on May 14 and did nothing for the share price. The company’s last public filing is its Q1 report that went up on the next day. The report too had no immediate effect on the share price. Here is the brief version of BIEL‘s balance sheet published in the quarterly:
- $48 thousand in cash a/o March 2014
- $691 thousand in total assets
- $9.1 million in total liabilities
- $503 thousand in Q1 sales
- $655 thousand in Q1 net loss
The company is improving upon its revenues gradually, with $1.2 million for all of 2015 and half a million for Q1 of the new year alone. However, it is still generating losses that exceed revenues. The share structure of BIEL is also something traders may want to keep in mind.
As of March 31 the company had over SEVEN BILLION outstanding common shares. This partly explains why in the last month alone BIEL has over a dozen sessions with as many as 216 million shares in daily volume and those sessions never moved the price. Back on December 31, 2014 the company had 6.4 billion outstanding shares. Within the three months that followed, authorized shares were upped from 7 to 8 billion and a new 646 MILLION new shares were issued. Dilution of such proportions is nothing to sneeze at.
The most recent quarterly describes the number of currently outstanding related party loans that were signed with family members of BIEL‘s president. A brief snippet from the filing says more than a thousand paragraphs of explanations ever could: “the corresponding shares to be issued on the conversion of these other related party loans has increased … to 5,583,192,000 at March 31, 2015”.
Following the volume and price action of late April, the stock of Breathe eCig Corp. (OTCMKTS:BVAP) took a breather for the better part of the current month. Yesterday’s session saw BVAP drop in double digits again, on a significant volume spike. After 1.7 million shares changed hands, the company stopped at $0.09 by the closing bell.
For those wondering why BVAP was very thinly traded in 2014 and early 2015, the answer would be – because it was not working on vape pens but was rather an unsuccessful mineral exploration venture back then. After a merger and a name switch, BVAP climbed in leaps and bounds over the second half of April, initially stirred into greater daily volumes by PR concerning a manufacturing agreement with a Hong Kong based company. A later release dropped a bit of info about a $300,000 order placed with the same manufacturer. The stock soared as new PR informed convertible debt to notoriously toxic financier JMJ Financial was retired using a cash payment instead of a ton of newly issued shares.
Things were looking good but despite new positive PR the stock turned a deep red on May 15, then went on quite a red streak over the following sessions. This culminated in yesterday’s 11.7% drop. Here is the brief summary of the quarterly balance sheet BVAP put up on May 15:
- $134 thousand in cash
- $773 thousand in current liabilities
- ZERO revenues since inception
- $1 million in quarterly net loss
The fact that BVAP has only recently turned to producing vaporizers, has not made a dime of revenues selling those vaporizers just yet and its biggest achievement so far seems to be dubbing itself “the first socially responsible company” in the vape sector could be a few things to keep in mind.
Another thing to note is that despite pointing out the retired JMJ debt, BVAP still managed to dilute its stock significantly within a very short amount of time. The latest 10-K by the company reported 276 million outstanding common shares as of April 6. By May 13, just over a month later, the count was up to 335 million outstanding shares. Back in November BVAP has a mere 100 million shares issued and outstanding.
Whether BVAP will retreat back to its early April levels or manage to stop this slide remains to be seen.
AccelPath Inc (OTCMKTS:ACLP) changed its business plan in Q4 of 2014. Apparently, the management team weren’t particularly happy with the results they were achieving through the medical diagnostics services and decided instead that they are going to focus on the beverage industry.
In order to do that, they completed a couple of acquisitions. First, ACLP bought a 70% stake in a company called Village Tea Distributors Company, Inc and later it acquired 52% of STI Signature Spirits Group, LLC. The transactions didn’t exactly turn the ticker into the hottest penny stock out there, but some people were happy with the new direction. On November 6, 2014, for example, ACLP experienced a volume spike and reached $0.0016 per share. Unfortunately, shortly after, it found itself in free-fall mode. Five weeks later, the stock hit the absolute bottom of $0.0001 per share and it spent the next five months stuck there simply because it couldn’t go any lower. But why did it do that?
As soon as you open the latest 10-Q, you’ll see that the acquisitions from Q4 of 2014 didn’t really bring in much in terms of results. Here’s what ACLP recorded at the end of March:
- cash: $4,109
- current assets: $293,610
- current liabilities: $5,967,534
- NO quarterly revenues
- quarterly net loss: $695,978
The atrocious balance sheet did play its part in the stock’s downfall, but it was far from the only problem. ACLP‘s shareholders were also forced to go through quite a lot of dilution.
The company executed a 1 for 250 reverse split in September 2014 and immediately after it, the number of issued and outstanding shares stood at about 19 million. On February 23, 2015, it was already sitting at 685 million and last week, when ACLP filed the Q1 report, they told us that it’s now hovering above 794 million.
As is often the case in Pennyland, the devastating dilution was primarily caused by toxic debt. Over the years, ACLP has issued convertible notes both in exchange for cash, and in exchange for services. All of the debt can be converted into common stock at a discount to the lowest market price registered during a rather long (twenty to thirty days) period prior to conversion. Wonder what this means? It means that between March 31 and May 30, ACLP issued 109 million shares in order to satisfy $5,500 worth of convertible debt and $300 worth of associated expenses. In other words, 109 million shares saw the light of day at $0.00005 per share (that’s right, four zeros).
As you can see, there’s no shortage of things to keep the stock firmly glued to the bottom of the chart. Despite this, ACLP showed signs of life yesterday. The session started normally enough, but about forty minutes after the opening bell, the ticker suddenly spiked up and shortly after, it hit an intraday high of $0.0004 for the first time in almost six months. It then settled down, but it still managed to finish the day at $0.0002 which, as you might have calculated already, represents 100% in gains. What’s more, it generated a dollar volume of nearly $130 thousand which goes to show that investors are interested once again.
The reason for this is a press release according to which Village Tea, ACLP‘s majority owned subsidiary, is about to re-launch its brand in a selected location in Dallas, Texas. The management team gave the address and invited everybody to go there and test the loose leaf teas for themselves. Apparently, investors reckon that this is a big deal, but does it mean that ACLP can continue going up?
If the company CEO’s track record is anything to go by, things do look a bit suspicious. Gilbert Steedley is also at the helm of two other OTC listed enterprises – Texhoma Energy Inc (OTCMKTS:TXHE) and True North Energy Corp. (OTCMKTS:TNEN). Both of these tickers have made numerous attempts to make a run towards the higher end of the charts over the last few months and both of them have failed rather miserably. Currently, they’re both sitting at $0.0001 per share.
Of course, ACLP might just turn out to be different. Make sure you bear one thing in mind, though. While you’re weighing the odds, someone might still be converting debt into stock at a rate of $0.00005 per share.
[[tagnumber 0]]Yesterday Cyren Ltd. (NASDAQ:CYRN) announced its first quarter earnings which made the share price plunge out of the trading channel. The company‘s revenues dropped and its financial condition looks desperate for there is an urgent shares offering on the way that will dilute shareholders.[[tagnumber 1]] [[tagnumber 2]][[tagnumber 3]][[tagnumber 1]] [[tagnumber 0]]CYRN closed at $2.62 for a share on Tuesday, or 16.83% down from the previous day close. The stock is quite illiquid with about 134,000 traded share on average, thus it does not take much for such a plunge to happen on some negative news from the company.[[tagnumber 1]] [[tagnumber 0]] [[tagnumber 1]] [[tagnumber 0]]Pre–market data shows CYRN could bounce a little bit at market open and recover some of the losses, yet both technically and fundamentally the stock looks bound to decline in the coming weeks. First quarter report show the company‘s revenue declined consequently over four quarters, reaching $7 million compared to over $8.09 million for the same quarter last year.[[tagnumber 1]] [[tagnumber 0]] [[tagnumber 12]][[tagnumber 1]] [[tagnumber 0]]Operating cash flow remains negative, which means CYRN relies on issuance of stock and debt to finance its operations. For the last quarter, working capital is insufficient to cover the operating expenses.[[tagnumber 1]] [[tagnumber 0]] [[tagnumber 1]] [[tagnumber 0]]Therefore, in the middle of this month CYRN said it has entered into an At the Market Offering Agreement with Craig–Hallum Capital Group LLC which will act as a sales agent entitled to a compensation of 3% of the gross proceeds. Under the agreement, CYRN may issue and sell shares of its common stock for a total offering price of $12 million, the terms suggesting the stock will be sold at market prices.[[tagnumber 1]] [[tagnumber 0]] [[tagnumber 1]] [[tagnumber 0]]As expected, CYRN shares dropped immediately on this announcement since that extremely unfavorable for the company way to raise capital sends a very negative signal to investors.[[tagnumber 1]] [[tagnumber 24]] [[tagnumber 1]]