Enviro-Serv Inc (OTCMKTS:EVSV) With a Killer Contract

What do you need to do if you want to push your stock from the absolute bottom of $0.0001 per share all the way to more than $0.001 in a matter of a few short weeks? Enviro-Serv Inc (OTCMKTS:EVSV) has done just that, so we might as well take a look and find out.

First, if the location of the company headquarters is a residential house, you might want to change it in an attempt to give the stock a bit more credibility. EVSV showed us, however, that this is not mandatory.

Some people around the internet could definitely help if they say that they’ve heard rumors about upcoming news. This, as it turns out, is enough to attract some buying which, as you can see from the chart at the beginning of the article, will give the ticker a push. Ultimately, however, the stock will need a press release if it is to make a serious move.

Sure enough, yesterday, EVSV announced that they have closed a franchise agreement with a company called Pestmaster Services LLC. Thanks to it, the ticker gained 37% and finished the day above the $0.001 per share mark for the first time in over eight months.

We can sort of see why investors are excited about the new deal. Pestmaster has been around for a while and it does appear to be a serious player in the pest control business. They have a $307 thousand contract which, thanks to the franchise agreement, will be serviced by EVSV and they are also bidding for a government contract which could bring in even more revenues.

The thing is, the franchise agreement press release isn’t the only thing that happened around EVSV yesterday. The company also filed its report for the first quarter of this year and it must be said that it’s quite disappointing. Here’s a summary of the figures:

• NO cash
• total assets: $1.4 million (most of them are labeled as “Organization costs”)
• total liabilities: $1.1 million
• quarterly revenues: $10 thousand
• quarterly net loss: $35 thousand

You don’t really need to be an expert to see that EVSV‘s financial situation on March 31 was quite catastrophic. And here’s where a question pops up: How did they manage to pay for the franchise agreement with Pestmaster?

They did it through a Regulation A offering which started back in January. Curiously enough, the quarterly report fails to mention how many shares are to be sold under the offering and at what price, but thankfully, everyone with an internet connection can open the SEC filing and get to that information in no time. In total, EVSV want to raise around $511 thousand by selling exactly 3,409,090,905 shares at $0.00015 a pop. The Q1 report tells us that between March 31 and May 18, they managed to sell 160 million shares for $24 thousand.

There’s little doubt in anyone’s mind that EVSV desperately need the money if they are to make any sort of impact on Tampa’s pest control business. Unfortunately, the humongous amount of stock that could be sold over the coming months and the equally humongous discount at which it’s offered threaten to wreak havoc with the ticker’s performance. And we’re not sure if the franchise agreement is enough to stop them.