Integrated Freight Corp (OTCMKTS:IFCR) with a PR-Fueled Spike
When we last wrote about Integrated Freight Corp (OTCMKTS:IFCR), the stock was hovering just above the $0.008 per share mark. Yesterday, it gained a whopping 125% in a matter of six and a half hours, but it ended up at just $0.0027. In other words, between January 30 and June 1, the ticker lost about 85% of its value.
Nevertheless, investors traded a record-breaking 53 million shares yesterday which goes to show that despite the horrific crash, they are ready to trust the stock. And, on the face of it, the press release that they read about half an hour after the opening bell suggest that their decision to jump in might be a good one. IFCR said that they are on the verge of closing several acquisitions which will give the revenues a 19% boost.
At first glance, there’s nothing wrong – the company is saying that the future is bright and investors are eager to jump in before the stock grows. But are things really so simple?
IFCR was a working company once. In fact, during the twelve months ended March 31, 2014, they logged about $20 million in revenues. Sadly, we’ve no way of knowing what their financial situation is at the moment.
Between June 2013 and the end of last year, IFCR filed no reports whatsoever and it wasn’t until January 28, that they finally broke the silence and said that they will regain their fully reporting status “in a matter of days”. More than a month later, the annual report for the fiscal year ended March 2013 came out and on April 30, the 10-K for the following twelve months was also published. The quarterly reports, however, are missing which means that the company profile is now stamped with a big stop sign.
As for the most recent statement, it’s not looking particularly healthy. Indeed, the revenues are impressive by Pennyland standards, but the rest of the figures are quite appalling. Here they are:
- cash: $35 thousand
- current assets: $2.8 million
- current liabilities: $16 million
- annual net loss: $1.4 million
Of course, the management team will tell you that things are looking a lot better now, but, as we’ve established already, blindly trusting everything you read in the press releases is not always your best bet. Especially when you bear in mind the track record of the said management team (we talked about it in more details in our previous article).
The 10-K published at the end of April, as outdated as it is, did shed some light on one more problem, though – dilution. The number of issued and outstanding shares grew from just under 95 million in April 2013 to more than 430 million two years later. A major part of the stock printing occurred during the first quarter of this year when nearly 112 million shares saw the light of day as a conversion of debt. Sadly, the conversion rate remains undisclosed.
All in all, while yesterday’s press release sounds promising enough, an investment in IFCR is not without its risks. Considering all of them carefully is absolutely essential.
