Baristas Coffee Co (OTCMKTS:BCCI) Heats Up Again
Not that long ago, Baristas Coffee Co (OTCMKTS:BCCI) was on the Pink tier of the OTC Markets and was using the alternative reporting standards. It’s still a pick sheet stock, but it’s now filing its reports in accordance with the SEC regulations, and yesterday, Barry Henthorn, BCCI‘s CEO, said that the ticker should be promoted to the QB tier before the end of the year. What’s more, he said that this is the first step towards a potential up-listing to the Nasdaq Capital Market.
The word “Nasdaq” is always bound to cause quite a lot of excitement around penny stock investors and, not surprisingly, BCCI enjoyed plenty of attention during yesterday’s session. More than 7 million shares changed hands in a matter of just six and a half hours. The ticker doubled its value and finished the day at $0.05 per share for the first time since October.
Clearly, a lot of investors truly believe that BCCI can really be listed on one of the national exchanges, but we’re starting to wonder if they have gone through the latest financial statement. Because if they have, they would have seen some issues.
BCCI like to advertise themselves as the “largest and fastest growing” drive through espresso company in the world. A quick look at the 10-Q, however, shows that they are not a particularly large company, and that their growth rate is somewhat questionable. Here’s a summary of the figures as of September 30:
- cash: $17 thousand
- current assets: $55 thousand
- current liabilities: $1.3 million
- quarterly revenues: $296 thousand
- quarterly net loss: $173 thousand
The balance sheet doesn’t really belong to a Nasdaq company, and we’re also seeing a worrying trend in the revenues section. The sales have dropped by around 0.25% on a quarter over quarter basis, and they’re 5% lower than the ones registered during the corresponding period of 2013.
Indeed, BCCI recently announced that they have started selling beer and cigarettes which, theoretically, should give the revenues a boost. There’s no getting away from the fact, however, that the people who trusted Mr. Henthorn’s promises invested money in a company that is still a long way away from meeting the strict requirements of the Nasdaq stock exchange.
The really big problem is that, apparently, many people have trusted Mr. Henthorn in the past and at least a portion of them have been left disappointed.
For one, Mr. Henthorn’s idea of up-listing BCCI on Nasdaq is not new. In fact, back on March 6, 2013, he said that the company has even reserved a new trading symbol for the national exchange – BAPI. As you can see, one year and nine months later, the stock is still among the Pick Sheets.
Then there’s the legal problems Mr. Henthorn experienced when a number of his employees complained about problems with the paychecks they were receiving.
Even the stock performance has been shaky. BCCI went through a couple of promotional campaigns over the last few years, and many of the people who fell for the pumpers’ promises ended up losing significant amounts of cash.
While the above-mentioned facts don’t necessarily mean that you must stay away from BCCI, they should, at least, warrant a lot of extra caution.
