What’s Wrong With IceWEB, Inc. (OTCBB:IWEB)?
Yesterday IceWEB, Inc. (OTCBB:IWEB) announced that one of their private cloud solutions, the IceWeb 6500 series has been featured in a special Buyer’s Guide issued by an entity called DCIG. Apparently, DCIG is a respected board of IT specialists who test a variety of solutions and recommend only the best to the general public. Now, we know that computer geeks are not easily impressed which should suggest that IWEB‘s 6500 series really is a quality product.
That’s not the only optimistic piece of news to come out of IWEB‘s HQ in the past few months. A reseller agreement was signed a couple of days ago, a purchase order from the University of Southern California was received last week and they’ve been talking about the upcoming acquisition of two entities – Computers & Telecom, Inc. and KC NAP – which, if completed, will mean that IWEB will have their very own data center. All in all, it would appear that IceWEB is a solid investment option, especially when compared to other penny stock companies like Amanasu Techno Holdings Corp (OTCMKTS:ANSU) and Save the World Air Inc (OTCBB:ZERO) who are deep in the development stage and have no idea when they’re going to get out of it. Is that really the case, though?
Well, indeed, they have some products, they have managed to develop them in the competitive environment of the IT industry and they have shown us already that they are capable of generating revenues. Unfortunately, this doesn’t seem to be enough.
We have written a fair few articles about IWEB over the years and we have seen that their biggest problems, financially speaking, were related to the huge amount of debt and the continuous losses that have been plaguing their financial statements ever since the beginning. Needless to say, when we decided that we’re going to cover them again this morning, we were eager to open the 10-Q for the first three months of 2013 and see if anything has changed.
Unfortunately, the answer is “No”. There is still a $2.3 million working capital deficit and they have failed to register any profits from their sales, but, more worryingly, the financial report looks even more depressing than the one for the same period of 2012. Here’s what we mean:
- cash (2013): $59 thousand
- cash (2012): $112 thousand
- current assets (2013): $1 million
- current assets (2012): $1.9 million
- current liabilities (2013): $3.3 million
- current liabilities (2012): $5.6 million
- revenues (2013): $455 thousand
- revenues (2012): $1.1 million
- net loss (2013): $2.1 million
- net loss (2012): $1.4 million
You can see that they’re working hard to reduce the amount of debt and they are succeeding to some extent, but the price of all this is some massive dilution. In just twelve months, they have issued more than 116 million shares and we’re pretty sure that the new stock has played its part in the constant descend in the price which is evident from the chart at the beginning of the article. Is that the only reason, however?
Not by any means. If you have been following our articles closely, you probably know that the ticker has been put under tremendous promotional pressure over the years and it’s been especially intense since the beginning of 2013. Between January 1 and yesterday, we have received more than 100 emails about IWEB and the result is pretty disappointing – around half of the value has been erased during that period. More worryingly, there are no signs of slowing down. A number of emails arrived in our inbox before and after the start of yesterday’s session and the pumpers in question include Hole In One Stocks, Penny Stock Parlay and Blue Horseshoe Stocks (who, according to their disclaimer, have received $150 thousand for their efforts from none other than IWEB, themselves) and if the ticker’s historic performance is anything to go by, the 15% run from yesterday will probably be followed by a scary slide and some heavy losses for the regular investors in the coming sessions. Make sure you have this in mind while contemplating a potential IWEB investment.
