Endexx Corp (OTCMKTS:EDXC) and Stock Mister Showed Us How It’s Done
What do you need to do if you want to get your financially distressed micro cap company off the ground? Well, truth be told, it’s never been easier. All you need to do is announce that you are entering the medical marijuana business, wait for someone to pay bags of cash to the promoters, sit back and enjoy the soaring price. That is what Endexx Corp (OTCMKTS:EDXC) did back in February and, as you can see from the chart, they have been doing rather well since then.
Yesterday, the next batch of emails and a new press release gave the ticker additional boost and by the end of the session EDXC reached $0.138 per share. We are well familiar with the pumpers – the largest one this time is Stock Mister who received $40 thousand for the campaign and the fact that they also act as one of the third parties leads us to believe that they distributed some of that compensation among smaller promoters like WinningPennyStockPicks and WePickPennyStocks. We’ll leave the pumpers to share the loot for a moment and concentrate on EDXC‘s press release which was conveniently published just an hour and a half before the opening bell yesterday.
In it we read that EDXC are now launching a new technology platform. We’re not sure that the term “technology platform” is in its proper use since, at this point at least, the M3 Hub that they talk about in the press release is nothing more than a website, and a rather confusing one at that.
We read through the description, scratched our heads, read through the description once again, but we were still not able to figure out what exactly the product will be. All we can decipher from the collection of words scattered all over the About Us page is the promise that everyone willing to use the technology will be sticking strictly to the law which, of course, is good to know.
Something tells us that EDXC, themselves are not quite sure what the M3 Hub will be used for, but at least they tell us that it won’t be ready until “2013/2014” after which they go on explaining how lucrative the medical marijuana market really is – something that we read in just about every press release issued by a company that is making its first steps in the industry.
When it comes to financial reports, however, EDXC don’t seem to be too talkative. For one, the latest filings that they have published with the SEC are dated January 2005 and after that, all they have done is file the annual report for 2012 and the quarterly one for the period that ended on March 31 on the OTC Disclosure & News Service. You can find a summary of the latest figures (or lack of them) below and while you are reading through them, bear in mind that when calculated at yesterday’s close, EDXC‘s market cap exceeds $23 million.
- no current assets
- current liabilities: $1.4 million
- no revenue
- net loss (between October 1, 2012 and March 31, 2013): $55 thousand
You would agree that the market value at this point is a bit of a stretch and we reckon that it’s due only to the artificial excitement created by the emails and press releases. The biggest cause for concern, however, is the fact that we simply can’t see them developing any sort of technology with no money in the bank and no current assets. And we also doubt that their financial situation has changed all that much, since the statement is as up-to-date as it gets.
Which got us wondering: “How did they manage to put together a financial report in just a couple of weeks when you have in mind that most companies in Pennyland take months to do it?”. The answer lies in the document itself – it’s only three pages long. All the shareholders and potential investors are presented with is a balance sheet full of zeros and we really think that a publicly traded company should give out quite a lot more information if they really want to be taken seriously.
That said, you can’t just go to EDXC‘s office and speak to the CEO about the length of the report and the lack of vital information in it because, according to the company profile on the OTC Markets, their business address is a P. O. Box in the quiet town of Cave Creek, Arizona which, according to Wikipedia, has a total population of 5,120.
All in all, red flags all around EDXC, and in case the ones above weren’t enough, all you need to do is to check out the Stock Mister’s track record and the way their picks have performed once the hype was gone. After you’ve done that, we would advise you to weigh the risks carefully before making any quick decisions.