Save The World Air, Inc. (OTCBB:ZERO) Jumps Up On New Board Member
After the big drop it suffered in the end of May when Save The World Air, Inc. (OTCBB:ZERO) lost 20 cent in the span of just two days, the stock of the company stayed relatively stable. For the whole of June the ticker fluctuated around the new price level of $1.06 on a relatively consistent traded volume. Now during yesterday’s session it started to retrace its steps up the chart.
Trading began slow after the market opened but at noon things started heating up when the stock surged to $1.24 for a brief time. The ticker quickly started subsiding though and at closing time it was sitting at $1.13. Investors showed rekindled interest towards the company resulting in a nearly 5 times bigger traded volume of 288 thousand shares compared to the previous day.
The reason for this modest climb was the announcement made by ZERO in early morning yesterday. The company appointed Mr. Mark Stubbs as an independent member of its board of directors. Although we don’t want to underestimate Mr. Stubbs’ past accomplishments and experience, the enthusiasm that lifted the stock was sparked by a statement made by ZERO’s CEO. He said that the company now meets the requirements for the composition of its boards of directors in order to up-list to a senior exchange.
We hear such intentions quite often in the land of pennystocks and that is why we decided to take a look at their financials. And judging by the results contained in the quarterly report for the first quarter of 2013, they may be getting a bit ahead of themselves:
- $4.4 million cash
- $4,6 million total assets
- $1.3 million total current liabilities
- ZERO revenues since 2011
- $1.5 million net income
At first glance it may seem a rather encouraging balance sheet but some clarification is needed. First of all the company has an accumulated deficit amounting to the massive $80 million. Second, they have no real operations and the respectable cash at hand and net income are all thanks to issuance of more common shares. And this brings us to the most worrying part about ZERO – their over-reliance on debt financing.
For the moment their outstanding shares are approximately 158 million out of the maximum authorized amount of 200 million. And there are 54 million warrants and options with exercise price for most of them around $0.32. Not to mention that although the company has transitioned from research and development they haven’t announced any buyers for their product as of yet.
During yesterday’s session the stock of Arch Therapeutics Inc (OTCBB:ARTH) gained almost the same percentage as DAKP – 4.84%. Despite performing almost identically there is one major difference between the tickers and that is the $2.9 million pump that started for ARTH during the weekend. Another company supported by a pump with astonishing budget is Sanborn Resources Ltd (OTCBB:SANB).
