Location Based Technologies, Inc. (LBAS)

[PennyStockVideos]

Latest email broadcast about LBAS:

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In the midst of a scary market there is one very interesting stock breaking out right now. Location Based Technologies, ticker LBAS on the OTCBB, today closed at 0.779/share, up from 0.67/share at the start of the days trading. Its stock chart for the last month and a half is very impressive. It's up almost 400% since the start of July, and it has steadily increased almost every day of trading since the start of August... and this is in the midst of a very scary market where the Dow, Nasdaq and S&P500 have all dropped well over 10% in the last couple weeks.

The company focuses on developing GPS technology. Here's a snippet from their Technology Overview page on their website:

"Location Based Technologies., Inc. (LBT) builds and develops a wide variety of innovative location technologies for use in our products and services. Our patented intellectual properties form the foundation of the core technological advantage we hold within the industry. Our knowledge and expertise in GPS and location technologies allow us to continue to innovate and improve our services and products at a rapid pace."
(Source: http://www.locationbasedtech.com/technology/technology-overview)

I'm a little too busy to put together a video on this stock right now, but a couple of PennyStockVideos.com subscribers had emailed me asking about this stock so I feel compelled to do a bit of background research on the company. My honest opinion is that there's a very good chance this stock will continue to rise in the next month or so -- maybe even approach $1/share -- but there's also an enormous amount of risk involved and so right now I don't recommend going long on it. As you'll see, the company itself is rather sketchy.

In their latest quarterly report, we can see that LBAS has $405,811 in total current assets, but a whopping $7,703,496 in current liabilities. In the three months ended May 31, 2011, they generated a meager $4,575 in revenue. They're listed as a "going concern" in the report. Here's a direct quote:

"The Company has incurred net losses since inception, and as of May 31, 2011, had an accumulated deficit of $34,095,591. These conditions raise substantial doubt as to the Company's ability to continue as a going concern."

Even more shocking is that the market cap for LBAS right now is very near $100 million. Now I don't know about you , but I would feel rather nervous investing in a company with a market cap of over $100 million when they have practically no revenue and huge liabilities and huge deficits and are listed as a going concern. I will continue to watch this stock, but it's very unlikely that I will go long on it due to the high risk involved.