On Friday, the stock of Pazoo Inc (OTCMKTS:PZOO) accelerated its decline and crashed hard erasing over 30% of its value in past few days. It tried to open in green than its previous close but began sinking immediately and closed at $0.00580.
Pazoo is fetching attention through its measures to run marijuana testing facilities in the US. The company has a 40% holding in ‘MA & Associates’ who are intending to have the grand opening in April on the infamous date 20. In January, Pazoo bought additional 45% stake in Harris Lee, LLC. For 450,000 preferred B shares. The firm is expected to become operational by July.
The financial performance
Before investors get excited with the news, they should consider several other serious red flags associated with Pazoo. The last financial report stated that at the end of September 2014, Pazoo just had $95,000 as cash. The total current assets were around $439,000 and the total current liabilities were $1.9 million. Pazoo posted quarterly revenue of $21,000, and net loss was $1.25 million. The company has been relying on the sale of convertible notes and equity financing to sustain its operations. Although it is rather usual for a penny stock company, recently the dilution of PZOO stock has been crushing.
In November, Pazoo reported that outstanding shares at 155 million which have now reached near to 350 million. A major percentage of issued shares came at discounted prices. In September, the company had $740,000 in the form of outstanding convertible debt. It issued $547,000 worth of notes in October. The latest 8-K form reflects just how many PZOO shares have been issued since the start of February. The company even filed S-1 registration for almost 40 million shares that can be offered under an equity purchase deal with Premier Venture Partners, LLC.