Promoters Want Another Slice of Unique Pizza & Subs (PINK:UPZS)

We always wonder why the third parties waste so much money on promotional efforts for companies that have already gone through the treatment multiple times. Especially when the previous pumps have ended in disaster which, coincidentally is the case with Unique Pizza & Subs (PINK:UPZS). If you follow our articles closely, you will remember that we wrote about them when they were given some boost from a number of paid newsletters back in February. A quick look at the chart on the right reveals that while the hype did give the ticker some thrust in the right direction, a lot of other factors pushed it back down once the emails stopped.

Which are these factors? Well, a large shareholder for example, might have decided to take advantage of the high price and make a quick profit by selling some shares but, of course, we can’t be sure about that. What we do know for certain is that UPZS were in a terrible financial shape when they got pumped in February and, since there is a new wave of emails flying around right now, we decided to check if anything has changed.

Sure enough, they have filed a new annual report for the twelve months that ended on December 31 and we were hoping to see something different compared to the last time we were reading through their filings. Unfortunately, the financials that we found in the annual report are pretty much the same as the ones that we discussed in our previous article. Here’s the summary:

• cash: $740
• current assets: $115 thousand
• current liabilities: $5.49 million
• revenue: $0
• quarterly net loss: $4 thousand

When they entered the pizza restaurant business a while ago they were determined to develop and market their own brand and even start a franchising program, which was supposed to be their primary source of revenue. As you can see from the big rounded zero in the statement, this didn’t really work out and ever since August 2012 they have been talking about a future acquisition that is going to take place. They said that they have signed an agreement to merge with Pizza Fusion – an established brand on the market with several restaurants in the US and a few more worldwide. Without a doubt, this is some exciting news and UPZS have been desperate to keep investors on their toes by announcing all sorts of news related to Pizza Fusion without any concrete information on the date of the closing of the merger. It’s all well and good informing us how many new restaurants will be opened in Saudi Arabia, but we feel that the shareholders are more interested in the question of whether the income from these facilities will come to UPZS or not.

If they want to be taken seriously by potential investors, they should also think about changing their business address. As we all know substantial companies don’t use P.O. boxes as a means of communicating with their shareholders by mail.

That’s not even the biggest problem with UPZS. As you can see, the amount of liabilities is humongous and most of them come from lawsuits filed against them throughout the years. Unless they can close the acquisition as quickly as possible, and start making revenues soon, they could end up in serious trouble. They should also start thinking about staying out of further legal proceedings for a change.

In the meantime, pumpers will continue to give UPZS a short boost every now and then, and it would appear that there’s no shortage of third parties wiling to pay for the campaigns. Having in mind the results from the previous promotion, we would say that the risks are quite high and if you decide to jump in, you might end up seriously burned.