Pazoo Inc (OTCMKTS:PZOO) Corrects On Record Volume
On April 20 Pazoo nc (OTCKMTS:PZOO) should have held a soft launch of their 40% owned marijuana testing lab in Colorado. Investors were rushing towards the stock in anticipation but on April 13 it was announced that the launch will be delayed as the decision has been made to move towards a planned full opening. The news should have affected the price performance of the company’s stock quite negatively but PZOO found another way to keep investors excited.
The company announced that it will be prepaying several convertible notes and thus eliminating the possible dilution of the common stock that could have resulted from the conversion of these notes. In just two weeks PZOO managed to pay off its convertible promissory notes to LG Capital Funding LLC and Macallan Partners LLC, Union Capital LLC, and Eastmore Capital LLC.
The PR about the last note that was prepaid was published early in the morning yesterday and it seemed that it will be enough to push the ticker even higher up the chart. Indeed, PZOO opened with a gap up at $0.01765 and climbed even higher to a high of the day of $0.0204. Although such prices couldn’t be supported the stock managed to keep almost all of its daily gains for nearly the entire session. All that changed less than an hour before the closing bell when PZOO plunged for the bottom of chart and after failing to recover closed at $0.0144 for a loss of 10%. Throughout the day the unprecedented number of 91 million shares got traded.
The fact that the company is trying to reduce its outstanding convertible debt is definitely a step in the right direction but investors shouldn’t forget that Pazoo is surrounded by a multitude of red flags. The latest financial report filed by the company covers the quarter ending September 30, 2014, and back then PZOO were in a rather depressing financial state with:
• $95 thousand cash
• $439 thousand total current assets
• $1.9 million total current liabilities
• $21 thousand revenues
• $1.25 million net loss
Seeing such dismal numbers you might start wondering about the source of the $400 thousand used by PZOO to repay the notes. Well, for now finding the answer is next to impossible because the company hasn’t submitted its annual report for 2014 nearly a month after the deadline. In a PR published on April 16 PZOO stated that the report should be completed in the next couple of business days but so far there is still no trace of it.
The report is extremely important because it will also reveal the current share structure of the company. In our previous articles we already warned you that recently the company has been putting its shareholders through a truly crushing dilution of the common stock. The number of outstanding shares increased from 155 million as of November 17, 2014, to over 542 million as of April 22, 2015.
Investing in PZOO remains a risky endeavour. As a result of the missing annual report the profile page of the company is currently market with the Pink Limited Information symbol. The millions of freshly issued shares and the fact that the company had to increase it authorized shares from around 1 billion to close to 3 billion should also be taken into consideration.
