Pazoo Inc (OTCMKTS:PZOO) Finally Receives Some Attention
Pazoo Inc (OTCMKTS:PZOO) saw quite a lot of pumping action over the last month or so. The emails started coming in at the beginning of October and it’s pretty safe to say that touting has been constant since then. Various outfits receiving equally various compensations tried to draw investors in and, willingly or not, the company was also lending a helping hand with a few well-timed press releases.
Despite all the publicity, however, the pump wasn’t working. Indeed, the price did go up a little, but the hesitant performance and the negligible volumes suggested that not many people are taking advantage. It wasn’t until Friday, that PZOO finally received some recognition from the market.
In a matter of six and a half hours, investors traded nearly 4.8 million shares which means that PZOO registered a daily dollar volume of more than $200 thousand for the first time since April. Indeed, the stock performance wasn’t that impressive, but many people reckon that, with the market finally paying attention, PZOO will be able to break out. But is this really going to happen?
The pumpers seem optimistic enough, but once you take a look at the latest 10-Q, you’ll see that there aren’t many reasons to cheer. Here’s what PZOO recorded at the end of the second quarter of 2014:
- cash: $61 thousand
- total assets: $316 thousand
- current liabilities: $1 million
- quarterly revenues: $34 thousand
- quarterly net loss: $574 thousand
It’s safe to say that the financial statement speaks pretty well for itself, but we should probably note at this point that future reports might look a bit better. So far, PZOO has been generating revenues mostly through ads placed on their website. This sort of business was never going to keep them afloat for long and a couple of months ago, the management team decided to seek other alternatives.
They acquired a 40% stake in MA & Associates LLC – an entity that wants to build a laboratory in which various medical marijuana products will be tested. The facility is not ready yet, but MA & Associates have a license and on Friday, they announced that they have signed their first customer. The press release tells us that testing will not begin until February 2015, but apparently, many people reckon that once it does, PZOO will really manage to profit from the booming medical pot industry.
Time will tell whether they are right or not, but in the meantime, investors might want to think about one more thing that could potentially put pressure on the ticker.
A closer look at the latest report reveals that there’s no shortage of convertible debt waiting to be turned into common stock. Perhaps more worryingly, most of the notes come with a conversion rate that stands at 50% below the market price and if you’ve been around OTC companies for long enough, you’d know that this isn’t a good thing.
An 8-K form from last week tells us that PZOO managed to retire one of the notes by repaying it with cash, but in its place, they picked up some more toxic debt which means that discounted stock might see the light of day really soon.
This poses a major risk for PZOO‘s future performance and we reckon that considering it carefully before putting any money on the line is absolutely essential.
