Archive for May, 2009

Is $60,000 much for you? Or these are only pennies? For me this amount of money is moderately large. However, Applied DNA Sciences Inc. (APDN.OB) is of a different opinion. A provider of DNA-based security solutions paid this sum to Super Hot Penny Stocks which is to promote the company and its stock. It seems to be helping the company: yesterday the stock reached $0.124 which is about 13% higher than in the previous trade.

Although the stock price may be affected by these manipulations, the financial analysis reveals all the secrets. I have decided to compare the latest two quarters, one of which is the last quarter of 2008, while another is the first one of the year 2009. From the income statements, it is seen that operating loss has been increasing over the period: in September it was $812,000, and in December this loss sprout up to $2,833,000. At the same time, gross profit fell down more than twice.

From the analysis of the balance sheet, the two quarters do not look inviting: current assets are 41% down, as well as liabilities. In case of the current liabilities, this is a positive sign. However, it is still not enough that a company would be noticed by investors.

A mineral exploration company focused on identifying and developing large-scale gold deposits in Nevada, Nevada Gold Holdings, Inc. (NGHI.OB) has recently started trading on the Over-the-Counter-Bulletin-Board. Although it was announced on May 15^th, after several days the company filed the notification about its lateness to post a quarterly report. Thus I started thinking whether Nevada Gold is going to remain on the OTCBB listing for a long time or not.

After the last trade, the stock tumbled down by 20%, and is not at $0.34. In addition, the extract from the annual filing about “Going Concern” does not make the company more inviting for investors:

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Finally, it should be mentioned that Nevada Gold Holdings paid $300,000 for stock promotion to different parties. In addition, Whisper From Wall Street purchased 100,000 shares of NGHI out of the open market.

In the following article, I would like to point out several things about Cx2 Technologies, Inc. (CXTO.OB) which operates and sells 220 MHz digital wireless data communications technologies in the commercial and public safety/emergency disaster relief sectors. The company gave 1 million shares to Wall Street Resources as a reward for stock promotional campaign. Was this company unattractive to investors? Let’s analyze annual reports from 2007 and 2008:

- Current assets of Cx2 Techs crashed from $255,000 to $3,000.

- Liabilities overgrew more than twice in the same period.

- Gross profit of the company went down as well: in 2007 it was $20,000, while a year later -$152,000.

- If earnings per share ratio is counted, you can see that it has gone up slightly, i.e. from -$0.445 to -$0.102. However, it is still negative.

All in all, you can see that the performance of this company does not look positive, and there are no signs of recovery seen. For this reason, the stock price jump up by almost 13% does not look realistic but rather reminds me of a stock promotional campaign.

Zaldiva, Inc. (ZLDV.OB) retails comic books, toys, and collectible items. The company is also the seller of pop-culture comic book related collectibles that primarily include action figures, dolls, statues, die-cast vehicles, T-shirts, books, magazines, posters and lithographs, household decor and more items. Although the business of the company seems to be interesting, the overall situation in Zaldiva does not look positive. The financial results of the 1st and 2nd quarter of 2009 are still unaudited. Therefore, I don’t consider it worth any analysis because it might be inaccurate as well as trustless. Besides, the company keeps being late to file the reports to the SEC. Zaldiva might be having huge problems with the OTCBB listing.

Nevertheless, in one of the reports I have found that the company might be going concern. Here is the extract from that filing:

The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

After looking at the falling stock price, it can be stated that the company is facing many problems. The compensation of $27,000 for Stock Guru isn’t the exception as well. All in all, this should influence investors’ attitude to Zaldiva.

Yesterday OTC Reporter got 4,766,000 free trading shares from Smokefree Innotec and $50,000 from Bio-Clean International as a compensation for stock promotional campaigns. What are these companies doing? Let’s look at them.

Smokefree Innotec, Inc. (SFIO.PK) designs, develops, manufactures and markets hi-tech, smokeless tobacco products which are designed to protect the non-smoker from secondhand smoke and all its effects. In the same way, these products provide an opportunity to enjoy a smoke-free cigarette even in non-smoking places. Although the company paid for a stock promotion, it does not seem to be helping a lot for now: the stock price went down by 8% after the last trade. However, the volume seemed to be large enough, i.e. about 500,000.

Another company is Bio-Clean International, Inc. (BCLE.PK) which recognizes the problems facing our environment. Differently from Smokefree, the stock of Bio-Clean International jumped up by 14% yesterday. Currently, the price is $0.114.

In general, promotional campaigns seem to make some influence to these companies. Due to this reason, investors first have to check whether a company is promoted and only then decide to buy a stock or not.