Quasar Aerospaces (OTCMKTS:QASP) on the Run Again
People who run small and micro cap enterprises often spend quite a lot of time and effort trying to convince investors that everything with their company and its filings is alright. They often say that the books and statements are as transparent as possible and assure the public that all the information is just a few clicks away. Quasar Aerospaces (OTCMKTS:QASP)’s management team can’t make such claims.
There were some changes to the people running the company and we now read in QASP‘s annual report that quite a lot of documents and records are missing. They say that because of this, they are unable to come up with an accurate estimation of the liabilities and they lay the blame on the former officers.
Apparently, the previous management team did close some rather strange transactions. At the moment, QASP is disputing a deal according to which a former director has purchased a flight simulator for a total of $10.
As you can see, there’s plenty of problems that Ms. Donell Vigil and the rest of the people currently in charge of QASP have to take care of. At the same time, they want to get the company’s flight school back on its feet and as if that wasn’t enough, they are trying to make an impact on the booming marijuana industry.
According to the latest quarterly report, they don’t have a lot of money to do these things. Here’s a summary of the most important figures as of March 31:
- cash: $22 thousand
- current assets: $108 thousand
- current liabilities: $214 thousand
- quarterly revenues: $28 thousand (a year-over-year drop of 75%)
- quarterly net loss: $67 thousand
Nevertheless, people seem to trust Ms. Vigil and QASP. As you probably know, when the company announced its plan to enter the marijuana business, the stock was sent flying high. The hype dragged it out of the triple zero levels and flung it as high as $0.0034 on April 2. Like most newly-born pot stocks, QASP then suffered a major crash, but currently, it seems to be on the run again.
It hasn’t registered a red session since May 23 and the cumulative gains now amount to around 200%. Plenty of people reckon that the only way from here is up and if you take a look at the press releases, you’ll see where their optimism is coming from.
QASP recently said that the acquisition of a Colorado hydroponic and scientific grow supply store is all but done (according to Ms. Vigil, the deals should be closed by the end of the week). On Friday, QASP said that they have retained a legal council who will help the company become a fully reporting entity by the end of the year.
As you can see, there are some promising developments, but we still reckon that an investment decision should not be based on press releases alone. Proper research is needed and when you do some actual digging around, you’ll find a few disconcerting facts.
During 2013, QASP issued a total of 762 million shares of common stock. 515 million of them were issued as a conversion of an undisclosed amount of debt and the rest were sold for cash. During Q1 of 2014, a further 1.1 billion shares saw the light of day. Once again, convertible notes were responsible for the issuance of the majority of the stock (883 million shares) and the lack of working capital is to blame for the printing of the rest.
For reasons that are not very clear, QASP don’t seem too keen on telling us how the newly issued stock was valued. The terms of the remaining notes are also undisclosed. Whatever the price, if the shares hit the open market for some reason, they could have a rather devastating effect on the chart.
