Blue Calypso Inc (OTCBB:BCYP) Remains Hesitant Despite a Better-Looking 10-Q

There’s been no shortage of positive developments around Blue Calypso Inc (OTCBB:BCYP) over the last few months.

For one, the pumpers seem to be refraining themselves from bullying the ticker. If you’ve been following BCYP closely over the last year or so, you probably know that it became the target of a rather big promotional campaign back in February 2013 which got revisited in June 2013. Needless to say, the results were less than impressive, but fortunately, over the last seven months, the newsletters have been dealing with other penny stocks.

There’s been some success in the court room as well, or, more specifically, outside it. On July 23, the company managed to reach a settlement agreement with MyLikes concerning the patent infringement lawsuit which has secured BCYP 3.5% in royalties. A month later, they reached another off-court settlement with Living Social, Inc. This time, the management preferred to keep the terms of the contract confidential, but, without a doubt, the successes against MyLikes and Living Social has led a lot of people to believe that the lawsuits against Groupon Inc (NASDAQ:GRPN), Yelp Inc (NYSE:YELP), and Foursquare Labs, Inc. will also have a happy ending. That said, some of the big boys seem to be fighting back. Foursquare, for example have already filed several counter claims, which means that the outcome remains uncertain, but even so, most investors seem optimistic.

All the while, BCYP have been working on the operations side of the business as well and the result is a financial statement that, though not perfect, looks far better than its predecessors. We’re talking about the 10-Q covering the third quarter of 2013, a summary of which can be found below:

• cash: $720 thousand
• current assets: $844 thousand
• current liabilities: $253 thousand
• quarterly revenues: $235 thousand
• quarterly net loss: $1.6 million

You can see that there’s still much to be desired, but the progress made during the third quarter is remarkable. The preceding period, for example, ended with just $5 thousand in revenues and a net loss of a whopping $8.4 million. As a recent press release also states, BCYP reduced around 80% of its liabilities which isn’t an everyday occurrence in Pennyland.

And yet, for all the good news, the ticker fails to impress. Yesterday, for example, it finished the session 11% below last week’s close while racking up a dollar volume of around $418 thousand. Hardly the expected performance, but what is causing it?

Well, back in September, BCYP sold around $1.5 million worth of shares at $0.13 a pop – a price that, at least until yesterday, presented a solid discount. The debt that was removed from the balance sheet a couple of months ago was converted at the same price which means that, if BCYP‘s market cap is to make another surge, it could be cut short by more selling.

Then there is the matter of increased exposure. Over the last few months we have seen a few Seeking Alpha articles (the latest of which came out on January 2) written by people who claim to be shareholders in the company. They all present BCYP as “a multi-bagger“, and an “overlooked play“, but in reality, they’re not doing the ticker any favors.

On the whole, the company seems to be making progress and yet, the stock is proving reluctant to show it. That’s why BCYP remains a risky choice and considering all the potential dangers is, as always, essential.

There were some other tickers that started the week on the wrong foot. Centor Energy Inc (OTCBB:CNTO) lost around 17% of its value while US Energy Initiatives Corp Inc (OTCMKTS:USEI) slid by nearly a quarter. The two drops could serve as a perfect illustration of the dangers associated with penny stock promotions.