Micron Enviro Systems, Inc. (PINK:MSVS) Digging Deeper

Oil, gas, coal, gold, lithium… Micron Enviro Systems, Inc. (PINK:MSVS) have gone through exploring almost every imaginable resource our small planet has to offer and they have failed. Now, though, they claim that they are finally on the right track with iron ore extraction in Malawi, Africa. Is that really the case, though?

Apparently, they realized that they are not going to do it on their own and that’s why, back in December, they announced that they are going to execute a merger with a British company called Britannia Mining, Ltd. That coincided with some paid newsletter promoters mentioning them and, as a result, MSVS‘ shares were revived somewhat. When you do some digging around, though, you will see announcements and emails will be far from enough.

Let’s start with MSVS‘ financial report. The latest one covers the period that ended in September 2012 and it looks horrifying. We have gathered a selection of figures that will give you and idea of how deep their financial pit really is:

• cash: $0
• current assets: $3 thousand
• current liabilities: $607 thousand
• revenue since inception: $0
• net loss (Q3 of 2012): $36 thousand

As a presenter of an boring infomercial would say “But wait, there’s more!”. Although they have not earned a single penny since they started, they have used quite a lot of money in order to fund everyday operations. The result of all this is a massive accumulated deficit (more than $11 million) and an even bigger amount in debt. Even if the results of the merger are positive, they will need quite a lot of time until they start repaying the huge loans and, since the notes are convertible into shares of common stock at extremely low prices, we’re pretty sure that some debtors might get impatient and cause dilution that would be hard to swallow for shareholders.

The bright future that is supposed to be in store for MSVS is also extremely questionable. Sure, Britannia do claim to have interests in mines in Africa, however, they are far from actually doing anything, and as you know, there’s quite a lot of money to be spent before the actual mining can begin. We really wanted to get some idea as to what Britannia’s financial situation is right now and, although we searched high and low, we only managed to find these figures. We do understand that they are rather outdated, but considering the fact that mining has not yet began, we doubt that things will be much different now.

On Friday, MSVS issued a press-release in which they said that their shareholders have officially approved the merger and, of course, they also included an estimation of how much they are going to earn once they start digging. That was enough for Hot Shot Stocks (HST) to tell us in their email how wealthy MSVS will become and how excited they are about the new developments. Then again, we have heard much the same words many times in the past and they were not what you’d call “spot-on”. Carbon Credits International Inc (PINK:CARN), for example were the target of one of HST’s campaigns back in January. As seen from the chart, there was the briefest of jumps before they plummeted to the sub-penny territory.

If MSVS want to draw a different chart, they will need to start generating revenues extremely quickly and despite what they say, the odds are against them. That’s why it’s extremely important to weigh your risks carefully while you are considering them as an investment alternative.