RightsCorp Inc (OTCMKTS:RIHT) Disappoints Investors With Q2 Results
Last Friday RighsCorp Inc (OTCMKTS:RIHT) filed its financial report for the second quarter of the year. On that day the stock crashed by nearly 20% and closed at $0.117 on a record for the past year and half volume of 1.6 million shares. Just for comparison the 30-day average for the stock stands at 253 thousand shares.
The report was just that bad. According to it at the end of June the company had:
• $266 thousand cash
• $368 thousand total current assets
• $3.6 million total liabilities
• $233 thousand revenues
• $2.8 million net loss
Nearly all of the numbers on the balance sheet show signs of deterioration. In just six months RIHT have been able to burn through almost all of their cash reserves and from the $1.6 million available to the company at the end of 2014 now they have less than $300 thousand. At the same time compared to the same period last year the revenues decreased by close to $20 thousand while the loss from operations increased by a million – from $743 thousand to $1.72 million. The net loss has increased by nearly 4 times.
The company expects its current cash to last only for a month or two. In order to fund their operations during the next twelve months RIHT estimate that they will need an additional $1.8 million.
On August 7 RightsCorp did issue an encouraging PR reporting a significant rise in their copyright infringement cases as well as 42% increase in Internet Service Provider (ISP) participation from 233 in March 2015 to 331. Investors will have to wait for the next quarterly report in order to see if this will result in an improved balance sheet.
The red flags around RIHT, however, run far deeper than their financial reports. In our previous articles we warned you that the company was targeted by paid pumps on numerous occasions last year and they continue to be pumped even now. The last batch of alert emails came on Thursday and Friday with the involved newsletters disclosing some rather serious compensations – Stock Commander bagged $31 thousand, The Next Big Trade received $15 thousand while Able Traders got $5 thousand.
It is paramount to do your own due diligence before putting any money on the line. Take into account the various risks and adjust your trades accordingly.
