Good luck with CETX. I wouldn't give management such a quick pass. I've grown more skeptical over the years after being burned by so many penny stocks, so I've learned to spot the red flags. And there's plenty of red flags on CETX.
Last November in the earnings PR, they reported Q4 revenues were up 57%. When revenues were actually up 440%! Such a glaring mistake that I don't think I've EVER seen another company make. Didn't they even know what their revenues were? Or they didn't bother to proofread the PR? Weird. Even weirder, they never issued a correction PR. So the wrong numbers just sat there for months.
The last 2 quarters the company has provided inflated EPS in the PR, without mentioning the large chunk of other income from debt forgiveness. That was only to be revealed a couple weeks later in the 10Q. Both times the stock popped on the earnings PR, and dropped on the 10Q filing. Slimy.
Maybe the debt forgiveness is recurring. Not sure how this shows up every quarter. Massaging the numbers? The whole Rob acquisition is strange. A Yahoo poster said they acquired Rob in bankruptcy. Then Rob had several awesome quarters. But now that business is tanking...while the original business is miraculously seeing huge growth to compensate? Oh and now they're doing air pollution business in China and India. If you wanted to go somewhere where nobody could verify the financials, that would be the place. Speaking of India, do you know why they use an auditor based in India?? Bharat Parikh & Associates. I could only find one public company that uses them. CETX.
Plus you have the whole issue of the convertibles. Why is a profitable company with a decent cash position issuing shares on terrible terms just as fast as they can? Doesn't make any sense. Why give away shares at 65% of the market price? And who are they unrelated third parties they're giving the shares to? Great deal if you can get it. Why can't they get real financing or a bank loan like a normal company? Are there any other profitable companies out there issuing a large amount of convertibles like this...just to keep the lights on? I can't find any.
