Another Big Win for No-Profit Maker Cereplast Inc (PINK:CERP)
Despite the impressive move it made on Monday, Cereplast Inc (PINK:CERP) is still showing no signs of slowing down, and what it did yesterday is a positive example thereof.
Yesterday, CERP shares closed trading at $0.042, thus soaring a further 47% in comparison to their closing value on Monday. More than 76 million shares of common CERP stock changed hands, which is a new six-month record for the company. Thus, CERP looks increasingly poised for a nice upward trend after spending months digging downwards.
Considering that CERP‘s last official press release came up yesterday, it is no wonder why investors worked themselves into a real trading frenzy with the stock, especially when the news covers revenue-related stuff. As it seems, the developer of bioplastic products has already acquired a total of $800 thousand in revenue for the first month of 2013 alone, which, in absolute terms, is exactly what any regular investor would want to hear.
However, if we have to be objective, we cannot afford to miss the company’s most recent financial report. According to the 10-Q covering the period ended Sep. 30, 2012, CERP‘s assets and liabilities were mainly comprised of:
- $237 thousand in cash;
- $5 million in net working capital
- $10 million in tangible assets vs $13 million in long-term debt
- $481 thousand in revenue, down 91% on an annual basis
- quarterly net loss of approx. $10 million.
As soon as we caught a glimpse of CERP‘s 10-K report covering the 2011 fiscal year, we were amazed to learn that the company incurred a net loss of $14 million even though its total revenue went beyond the $20 million benchmark. Ironically enough, this loss pretty much equals the money used to cover administrative expenses, including the executives’ salaries and other compensations.
Even though CERP is indeed capable of generating revenues that go in the millions, it has not managed to make its business efficient enough to become profitable. Unless the company goes in the black real soon, we would most likely continue to take a critical approach on the stock.
