A Paid Pump Pushes RX Safes Inc (OTCBB:RXSF) to a New 52-Week Low
Pennyland is not what it used to be. A couple of years ago, just about any promotional newsletter could send out some alerts and attract attention to this or that penny stock. Right now, properly influential pump outfits are thin on the ground. Damn Good Penny Picks is one of them and their latest pick is called RX Safes Inc (OTCBB:RXSF).
The campaign costs $20 thousand and it started shortly after Thursday’s closing bell. Thanks to it, RXSF logged a dollar volume of about $232 thousand on Friday, but unfortunately, this wasn’t enough to push it higher. In fact, the ticker opened the day with a gap up, but it crashed almost immediately. At one point, it hit a 52-week low of $0.01 per share and it closed the week at $0.015 – 14.7% below its previous value.
Even a couple of recent press releases weren’t enough to stop the drop. About a week before the promotion, RXSF announced that they have received a $1 million purchase order and on Thursday, just hours before the first emails started flying around, they said that Faruk Okcetin has joined the Board of Directors.
So, Damn Good Penny Picks didn’t really do a great job of pumping RXSF. But does this mean that the ticker will be a bad investment choice once the pumpers go away?
Well, the stock is relatively new to the OTC Markets. It received its trading symbol just over six months ago and it hasn’t been particularly active since then which means that predicting what it’s going to do next is nearly impossible.
RXSF might be new to the OTC, but the people who stand behind it do have a bit more experience with penny stocks. Lorraine Yarde, the company CEO, for example, was once at the helm of an entity called Biometrx Inc (traded under the BTRX symbol). Sadly, this endeavor wasn’t particularly successful. BTRX was revoked in 2011 because it was delinquent in its filings.
Fortunately, RXSF is not delinquent and it must be said that the latest report contains one or two things that could put the shareholders in better spirits. Here’s what the figures for Q1 look like:
- cash: $74,994
- current assets: $75,327
- current liabilities: $461,038
- quarterly revenues: $49,920
- quarterly net loss: $1,486,878
Indeed, the balance sheet is pretty appalling and the losses are absolutely huge, but RXSF did log a steep sales surge both on a quarter-over-quarter and on a year-over-year basis. In light of the severe lack of cash, completing the purchase order announced on May 20 might be a tall order to fill, but if they manage to do it, the future could be quite interesting.
Unfortunately, while they’re looking for fresh funding, some convertible notes could turn the stock into a wild ride. During Q1, RXSF raised some cash through the issuance of convertible debt which can be turned into stock at a 35% discount to the lowest closing bid price logged during the twenty days prior to conversion. Experienced investors know what could happen if a significant amount of discounted stock hits the open market.
All in all, the pumpers will sooner or later go away and the recent news might just have a serious effect on the future financial statements. Despite this, RXSF will still be far from out of the woods. Make sure you bear this in mind before putting any money on the line.
