Pazoo Inc (OTCMKTS:PZOO) Remains Shaky
On Monday the stock of Pazoo Inc (OTCMKTS:PZOO) crashed by exactly 10% and slid down to a close at $0.0144. Throughout the session the record for the company number of 91 million shares changed hands. Yesterday the ticker barely avoided another correction sitting a little over 1% in the green at the time of the closing bell.
For the last two weeks PZOO has been keeping investors excited by attempting to reign in its outstanding convertible notes. Between April 15 and April 27 the company paid off its notes to LG Capital Funding LLC and Macallan Partners LLC, Union Capital LLC, and Eastmore Capital LLC for a total of $400 thousand. As we said in our previous article this was a much needed step in the right direction because lately the shareholders of the company had to endure a massive amount of freshly issued shares.
The outstanding shares of the company ballooned from 155 million as of November 14, 2014 to over 542 million as of April 22, 2015. In order to accommodate the issuance of the new shares as well as the need for reserved shares PZOO had to increase their authorized shares from close to 1 billion to nearly 3 billion just two months ago. Some investors are wondering however about the source of the money used by PZOO to repay the announced notes. This seems like a rather valid question if you take a look at the last financial report submitted by the company. It covers the quarter ending September 30, 2014, and contains the following:
• $95 thousand cash
• $439 thousand total current assets
• $1.9 million total current liabilities
• $21 thousand revenues
• $1.25 million net loss
It is true that these financials cover a period that was seven months ago but for now investors have nothing else to rely on because PZOO are having some troubles filing their annual report for 2014. The report was supposed to be completed by the end of March but through a notification of late filing the company received a 15-day extension. On April 16, in a PR, Pazoo stated the report was going to be submitted “within the next several business days”. So far that hasn’t happened.
PZOO plan to have 3 marijuana testing labs operational by the 4th quarter of the year. In order to do so they will have to raise a substantial amount of capital. If the company is able to do so through a less dilutive form of financing investors’ support for the stock could remain strong. The problem is that without the annual report there is no way of knowing how many convertible notes are still outstanding and in turn how many discounted shares may be issued as a conversion of these notes.
PZOO should be approached with caution. The stock is starting to hesitate at its current price ranges and it could go through a series of corrections. Even if you believe in the potential of their business be sure to do extensive due diligence before putting any money on the line.
