I disagree. I think the amount of time the pps has been over or under .01 is about equal. For example, the stock was over .01 for the first six months of this year.
All penny stocks have dilution, debt, ect - that's what makes them penny stocks Dennis. This isn't the big-boards. Investor sentiment here concerns two things: Speculation on the potential of the company and speculation on the potential of the pps to move up. The company doesn't have to perform well for the pps to increase and vice-versa.
But as far as the fundamentals go, yes they are burning cash, but this is a critical cash-burning time. How much of that debt is advertising and merchandising displays? IMO the debt increased from December to march because the company converted the simple interest merchandising display loans from 6-8% to 12% interest (these were do this year)
Operating at a loss is not good for any company but remember most of their operating losses are being absorbed by shareholders. This increases the shareholders deficit but doesn't really put the company into more debt. To become profitable the company has to pay off their long term debt, which is slightly under 3 million but at the end of 2008 it was slightly under 2 million, so about a million dollars in new debt over two years.
The company needs to bring in about 4-5 million dollars in revenue to pay off their debt and cover operating costs.
All the operating cost/revenue ratio seems high until you bring into perspective what the company is actually trying to achieve. Ultimately 100 million in sales per yer right? Now is a crucial time, they really need to penetrate the US market.
We are going to have to wait and see how this year plays out in terms of sales to see where this company is headed. We have the fundamental tools to track this now, something investors haven't had over the past couple of years.
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