Portlogic Systems Inc. (OTCMKTS:PGSY) Is Trying to Recover
Yesterday the stock of Portlogic Systems Inc. (OTCMKTS:PGSY) bounced back up and registered a gain of over 13% closing the session at $0.66. Although the outcome of the trading day was rather positive it seems that most investors are reluctant to jump back in – the daily volume barely surpassed 150 thousand shares while the dollar value for the session stood at less $100 thousand.
And investors certainly have some valid reasons to be cautious when approaching the stock of the company. On September 25 PGSY announced that by the end of December 2015 they expect to launch a video conferencing app that will be able support up to 16 simultaneous conference participants with HD Video Support. A rather significant event for the company but will they be able to do it? Especially when you consider the fact that according to the annual report as of May 31 PGSY had:[BANER]
• $1156 cash
• $64,473 total assets
• $1.18 million total current liabilities
• $122 thousand annual revenues
• $39,650 annual net loss
Not only are the numbers found on the balance sheet utterly depressing bu the amount of revenues generated by PGSY has decreased by the whopping 84% compared to the results from the previous fiscal year.
Now, let’s draw your attention to the massive 1-for750 reverse split performed by the company on March 26, this year, that left them with 275 thousand outstanding shares. The annual report revealed that as of September 28 that number had already reached 33.5 million shares. 30 million of the newly printed shares were issued to a officer of the company and were restricted but the other 3.25 million shares were issued as a conversion of debt with 2.25 million of them being priced at just $0.02 each.
So, PGSY performed a reverse split followed by the issuance of millions of discounted shares as a conversion of debt. The more experienced traders should already know where this was leading – a paid pump. The promotion was launched last week with the creation of a lading page touting PGSY. The disclaimer at the bottom of the page shows that a weekly budget of $200 thousand has been set aside for the pump. A couple of email alerts were also sent out with the latest one coming on September 29 from the pump outfit Investor Research Institute. The paid promotion caught the attention of OTCMarkets and now PGSY‘s profile page carries the skull and crossbones warning sign.
PGSY has fallen significantly from the pump-induced high of $1.34 registered on September 24 and the numerous red flags could continue to exert a negative influence on the stock. Not to mention that the current market cap of the company of more than $22 million is completely disconnected from the last reported financials. Trading PGSY is extremely dangerous and before committing to anything you should do your own due diligence.
