Pazoo Inc (OTCMKTS:PZOO)’s Surge Intesifies
The positive momentum behind the stock of Pazoo Inc (OTCMKTS:PZOO) seems to be picking up speed with the stock adding another 34% to its value during yesterday’s trading. The stock closed the session at $0.0134 just below its high of the day of $0.0136. The daily volume of nearly 52 million traded shares was twice the monthly average for the company.
The current excitement among investors was sparked last Friday when PZOO made an official announcement about the upcoming launch of their marijuana testing facility in Las Vegas. The opening event is scheduled to take place on June 3. PZOO has a 40% stake in the testing lab.
Initially the Las Vegas lab was supposed to be soft launched on April 20 but the company decided to move directly towards and official opening. Understandably with the event just weeks away investors might be looking to jump right back into the stock. If the hype remains strong enough PZOO might be able to re-test their recent high of $0.02 but before you get overly optimistic there are a couple of things that must be taken into consideration.
On April 16 PZOO stated that they are just days away from filing the annual report for 2014. In reality it took them nearly a month to complete the report that was finally submitted last Thursday. If you take a look inside you will see that at the end of 2014 PZOO’s financials were far from encouraging:
• $733 thousand cash
• $848 thousand total assets
• $3.6 million total current liabilities
• $111 thousand annual revenues
• $4.9 million annual net loss
Although even by itself the balance sheet is depressing enough it is not the biggest problem around PZOO, by far. That honor goes to the massive dilution that has been taking place since the start of 2015.
It is true that Pazoo tried to limit the amount of shares they had to issue by paying off around $400 thousand worth of convertible notes before they could be turned into common shares but that makes the situation only slightly less troubling. At the end of December the company had 193 million outstanding shares while as of May 13 that number had nearly tripled with PZOO reporting over 525 million outstanding shares. Over 270 million of the newly issued shares came through the conversion of debt at an average price of $0.0027. As we said, after yesterday’s gains the ticker currently sits at $0.013. Between January and March another 49 million shares were issued through the conversion of preferred A shares.
The annual report shows that at the end of December PZOO had a little over a million preferred A shares. How many are still outstanding today though? The answer to that question should have been rather simple if PZOO were able to finish their financial report for the first quarter of 2015 on time. Instead on May 15 the company submitted a notification of late filing giving them a 5-day extension, which ends today. It remains to be seen if this time PZOO will be able to meet the deadline for the filing.
The excitement caused by the upcoming launch should keep interest in the stock high but the numerous red flags could turn PZOO into an extremely volatile choice. Do extensive research and adjust your trades accordingly.
