Adaptive Medias Inc (OTCMKTS:ADTM) Makes Another Jump Up The Chart

On Tuesday Adaptive Medias Inc (OTCMKTS:ADTM) registered a gain of nearly 40% but the fact that the surge took place at very last minute of the session while the daily volume failed to reach 5 thousand traded shares made the performance far less impressive. Yesterday the stock continue to move higher adding another 21% to its value and closing at $0.338 per share. This time nearly 700 thousand shares got traded but once more all of the gains were logged in right before the closing bell.

It seems that investors are not exactly eager to put their money into the stock. Although ADTM is consistently reporting revenues of over a million, something that very few pennystocks are capable of doing, their financials have remained nothing short of depressing. For the second quarter of the year ADTM reported the following results:

• $62,248 cash
• $1.9 million total current assets
• $8.1 million current liabilities
• $1.1 million quarterly revenues
• $3.6 million net loss

As we said generating $1.1 million in quarterly revenue is no small feat, however, the extremely high cost of revenue incurred by ADTM left them with a gross profit of just $27 thousand for the period. The massive losses do not make the situation any better – for the first half of 2015 the company had a net loss of more than $10.5 million. The company’s accumulated deficit has surpassed $50 million.

Back in September the balance sheet received a $1,250,000 boost. In order to receive the money ADTM had to issue Convertible Debentures with an aggregate principal amount of $1,470,588. With the conversion price of the debentures being set to $0.30 per share the stock of the company may find moving too far above that mark quite difficult.

ADTM have also been having some serious troubles with their management team. As we told you in our previous article at the end of January Mr. Quayed Shareef, the CEO of the company at the time, got arrested and charged with sex offenses towards children. At the end of last month an 8-K form revealed that ADTM filed a complaint against several parties among which is Mr. Jim Waltz, a former director and interim COO of the company.

Recently ADTM have been adding new clients to their Media Graph ad-tech platform with the latest one being the mobile news network PhoneDog Media. During a conference that took place last week the CEO stated that the quarterly burn rate has been decreased to around $600 thousand which is another step in the right direction. Will this be enough to offset the various red flags though? It is up to you to decide. 

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