Blue Calypso, Inc. (OTCMKTS:BCYP) Remains a Volatile Play

After reaching a peak of $0.36 in late April the stock of Blue Calypso, Inc. (OTCMKTS:BCYP) has been unable to form another prolonged upwards trend and instead has been fluctuating around the $0.15 mark. Yesterday after climbing a modest 7% the ticker closed at exactly that – $0.15 per share. Traded volume was well out of the ordinary though with more than 4.6 million shares changing hands.

Although the company describes itself as a developer of technology and intellectual property for the digital word-of-mouth marketing all you need is one look at their financials to see that investors aren’t attracted to them because of a solid business plan or impressive operations. BCYP finished the quarter ending June 30 with the following results:

• $1.4 million cash 
• $1.47 million total current assets
• $2.6 million total current liabilities
• $5000 revenue
• $8 million net loss

Although revenues are practically non-existent BCYP has managed to turn themselves into a promising patent play thanks to their IP portfolio consisting of 5 patents and 2 patent applications. Using them the company started patent infringement lawsuits against companies like Groupon, Living Social, Yelp, MyLikes and Foursquare.

They have already managed to achieve two settlements – with MyLikes agreeing to pay 3.5% royalties and with LivingSocial whose terms are confidential. The latest press release from the company announced the purchase of mobile gamification technology which may lead to more lawsuits being initiated.

Shareholders of the company should also expect some serious dilution by the end of the year. BCYP has entered into a series of amendments with the holders of convertible debentures and warrants in an attempt to clear up their balance sheet. The 10% Convertible Debenture amounting to $2.4 million had its conversion price lowered to $0.13 if it gets converted into common stock by December 31. The warrants also got their exercise price cut in half to $0.05 but at least the cashless exercise feature has now been removed and BCYP is expecting to receive around $1 million.

With the trials against the bigger companies still in court BCYP is bound to retain the interest of the market but before making a decision it is best to do your own due diligence.

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