Start Scientific Inc (OTCMKTS:STSC) Gets a Volume Boost
Some of you will probably wake up early today, they’ll check out what happened on the OTC during yesterday’s session and they’ll see that Start Scientific Inc (OTCMKTS:STSC) has been pretty active. In fact, the 84 million shares that changed hands during the session not only broke the previous daily volume record, they absolutely squashed it.
Sadly, even the energetic trading failed to lift the share price significantly. There were a few peaks throughout the day, but they proved to be unsustainable and the ticker eventually came to a close of $0.002 (just 9% in the green). Not really the explosive run you’d normally expect from a sub-penny stock, but the huge volume spike will probably be enough for you to continue with the due diligence and the search for the trigger.
First, you’ll try the press releases and you’ll hit a dead end. The company hasn’t made any announcements for the last six months, and, surprisingly or not, there have been no paid promotions for a while as well.
You’ll then look for the cause for yesterday’s spike in the latest 10-Q. Instead of it, you’ll find the following figures:
- total assets: $47
- current liabilities: $2,259,195
- NO revenue
- quarterly net loss: $69,303
Once you’ve gone through the figures above, you’ll see that they can’t be the reason for yesterday’s surge. You’ll still be dumbfounded by the peak and you’ll still be eager to see what has caused it.
As a last resort, you’ll open the message boards and you’ll find a lot of people saying that the financials above are not really relevant because STSC is about to acquire a company called Quality Energy Solutions LLC – a service provider in the oil and gas industry with annual revenues of around $7 million.
These people haven’t done their due diligence properly. The acquisition in question was first announced in April and the management team said back then that it is supposed to be closed before the beginning of May. This didn’t happen and after several months of silence, STSC finally admitted that the letter of intent has been terminated.
Despite the fact that it’s not entirely up-to-date, the information being spread around the internet is definitely affecting the stock performance. You should be the one to decide what this could mean for the future of STSC, and to help you make up your mind, we’ll give you some facts and figures that, unlike the message board posts, can be backed up by the most recent SEC filings.
Between February and April, STSC borrowed a total of $194 thousand under various convertible notes and debentures. The pitiful cash reserves at the end of June clearly show that the money wasn’t enough, but this is far from the biggest problem. The biggest problem lies with the fact that all of this debt is convertible at discounts ranging from 40% to 45% to the market price.
