Pervasip Corp. (PINK:PVSP) Call Pumpers for Help
Over the last couple of years Pervasip Corp. (PINK:PVSP)’s shares have been going steadily down and while three years ago they were traded at around $1.40 per share, they are now in the sub-penny field. We’re pretty sure that they want to get back on their feet and Stock Legends, who have received $10 thousand in compensation are here to promote the telephone wires out of them.
VoIP technology is one of the hot sectors in Pennyland right now and PVSP seem to be taking advantage of this fact. We’re not quite sure why this technology is so popular since there are so many huge players with plenty of resources battling it out for recognition but still, if PVSP have something real and innovative to show us, we’re all ears.
They say that their services are suitable for small and medium business enterprises as well as regular users and they also seem to have a mobile version of their application which seems to be relatively popular. They also say that they follow the high-quality-low-cost mantra, which is all well and good for the users, but unfortunately, it has caused PVSP some serious problems.
Rather disappointingly, their latest financial statement covers the three months that ended in August 2012, which means that we have no idea how they have been getting on since then. Still, outdated or not, we opened the report to see what we have on our hands. Here are the most important financials:
- cash: $22 thousand
- current assets: $143 thousand
- current liabilities: $12.6 million
- revenue: $248 thousand
- net loss: $779 thousand
As you can see the debt is enough to keep most people awake at night and although the low cost of their services is probably a nice way to gain recognition and a bigger customer base, it has plagued PVSP with huge losses over the years.
On a brighter note, they are doing their best to keep the huge figures under control and they did manage to settle some of the debt. Because of the lack of cash, though, they were forced to issue quite a lot of shares and, by the looks of things, the printing press will have to work over time in the foreseeable future as well. To give you an understanding of how bad the potential dilution is, you should bear in mind that although they have not gone through even half of their debt, in December 2012 they were forced to double the number of authorized shares so that they can have the capital for future conversion of notes.
Furthermore, it was done without the agreement of the shareholders. How did they do it? Well, the two main officers of the company – Mr. Paul Riss (CEO) and Mr. Mark Richards (CIO) issued themselves a total of 51 series C preferred shares which gives them 51% of the total voting capital. This means that when they decided to amend the articles of incorporation, they were able to do it on their own. We should also mention that they also have quite a lot of common shares.
While we’re on the subject of Mr. Riss, we should point out that, although this information is not mentioned anywhere else, according to this document he was the CEO of another company dealing with telephone services – New Rochelle Telephone Corp. We’re pretty sure that we’re speaking about the same Paul Riss, since even the business addresses of New Rochelle and PVSP coincide. A few minutes’ worth of research reveals that New Rochelle has gone into bankruptcy.
We hope that PVSP won’t be suffer the same fate, but we would strongly suggest that you weigh the risks carefully before making any quick decisions.
