Amazonica Corp (OTCBB:AMZZ) Loses A Quarter
Until two days ago, Amazonica Corp (OTCBB:AMZZ) was just one of the many OTC companies with some sort of a business plan but not much else. The ticker was virtually dormant and nobody was even remotely interested in it. Yesterday, however, something happened and trading exploded. More than 1 million shares changed their owners and the total dollar volume registered amounts to no less than $809 thousand. Unfortunately, the ticker took a beating and closed the session at $0.74 or around 25% below its previous value. We decided to see if we will find the reason for all this.
First, we wanted to see what is it that they’re dealing with exactly and it turned out that it’s not all that spectacular – hardwood flooring distribution. More specifically, Brazilian hardwood flooring distribution, but that’s not necessarily a bad thing. After all, it’s all well and good stating that you are about to revolutionize the world of medicine like Arch Therapeutics Inc (OTCBB:ARTH) do, but coming up with an idea that is more down-to-earth is sometimes a good strategy as well. In addition to this, Brazilian hardwood flooring is quite famous with its durability, wide variety of colors, it’s generally perceived as a luxury item and there’s definitely a market for luxury items. Yet, despite that, a quarter of the price was wiped out in a single session.
We were still wondering why and we decided to check out the SEC filings and see if we will find something interesting there. The last form published is dated March 14 and it covers the three months that ended on January 31. Knowing that AMZZ is a development stage company, we weren’t expecting much, but even so, we were quite surprised at how bad it was. Here’s a recap of the figures:
- total assets: $40 in cash
- total liabilities: $28 thousand
- no revenue since inception
- quarterly net loss: $4 thousand
- net loss since inception: $52 thousand
We can also see that they have signed a contract with an entity called Equatorian S.A. Laminados Amazonia back in 2011 and it was supposed to provide AMZZ with supplies of hardwood. Yet, although the agreement has been active for more than two years now, we can see no transactions between the two companies. All in all, the report is nothing to get excited about and yet, we doubt that this was the reason for the terrible crash from yesterday since the document has been around for more than three months. We knew that it must be something else.
Naturally, we checked the news thinking that it might be a new announcement that made shareholders get rid of their stock and thus depress the price. Unfortunately, AMZZ don’t have a website and although we looked long and hard, we couldn’t find a single press release issued by the company.
The only thing left for us was to check for promotions. Currently there aren’t any but having some things in mind, we won’t be at all surprised if such a thing happens in the near future. If you take a look at our articles on ARTH and Sanborn Resources Ltd (OTCBB:SANB), you will see that both companies performed a stock split and increased the number of authorized shares before the pumps for them started. Unlike ARTH and SANB, AMZZ are still sticking to the hardwood flooring business but they did perform a 175 for 1 split back in May and this inevitably led to the increase in the authorized capital (although nobody knows for sure how much it is right now). This, coupled with the sudden spike in the volume from yesterday suggests that something might be brewing. Even if that’s not the case, the dreary financial situation is, we reckon, a good enough reason to think twice before investing any money in AMZZ.
