Yesterday, Sanswire Corp. (OTC:SNSR) stock surged by 15.38% and reached a share price of $0.09. Traded volume reached almost 850 thousand, which is around double the average value. What was curious that day was the amount of short volume, which reached almost 43% of the total number of traded shares.
At the end of the last session, a PR came out to announce that SNSR had reached a settlement with the SEC in terms of a previously disclosed lawsuit against GlobeTel Communications, which is the former name of the company. The settlement relates to allegations of fraud and other wrongdoing with which the former company was charged and which was supposedly perpetrated in 2002.
In detail SEC had alleged GlobeTEl of violating certain federal security laws and SEC rules. The settlement would induce SNSR to pay a civil penalty of $300 thousand. Eventually, on Dec.16, the US District Court dismissed all claims against GlobeTel.
In this regard Michael Clark, SNSR Chairman of the Board, added that "We are extremely pleased to have resolved this matter and look forward to moving on to execute our current business strategy."
Sanswire Corp. is a company which develops and produces lighter that air unmanned aerial vehicles, which provide intelligence, surveillance and reconnaissance. The company's products are designed for both the government and commercial sectors.
On Nov. 12 SNSR filed its 10-Q report, which indicates that the company is far from being in a healthy financial condition. To start with, there is a working capital deficit of $20.2 million and a negative net worth of almost $19 million. In addition, the net lost for the quarter almost reaches $3 million, which is $1.5 million higher than last year. Needless to say, there are no revenues to keep the blood cycle of the company going.
On the whole, it is obvious that the company will urgently need additional cash in order to continue breathing. In addition, there is still no indication whether the product of the company has generated enough interest on the market. These points of concern are what darkens the horizon of SSNR stock.