Net Talk.Com, Inc. (OTCMKTS:NTLK) Revived

Net Talk.Com, Inc. (OTCMKTS:NTLK) issued a press release yesterday and the stock experienced its first truly interesting session in a very long time. The ticker managed to run from last week’s close of $0.0033 all the way to $0.011 and it finished the day with a dollar volume of just under $170 thousand. In other words, it gained a massive 233% in a matter of six and a half hours which goes to show that people are extremely excited about the stock’s future.

The reason for their enthusiasm is a strategic partnership which will allow NTLK to enter the home security business. Their new partners are from a company called Fantem and they have developed Oomi – an affordable security solution that, thanks to NTLK‘s technology, will allow you to monitor your home from the screen of your smart device.

That doesn’t sound half-bad and we know that people are interested in the Oomi gizmo because not that long ago, Fantem managed to raise quite a lot of money through an IndieGoGo campaign. But is this enough to warrant such a massive price spike for NTLK‘s stock?

If you take a step back, you’ll see a more sobering picture. The stock performance over the last few months, for example, has been nothing short of atrocious. At the beginning of the year, NTLK was hovering around $0.04. On Friday, it bottomed out at just $0.002 per share. Rewind the tape further back, and you’ll see that just over eleven months ago, the ticker was comfortably sitting above the $0.30 barrier.

It must be said that the financials also leave quite a lot to be desired. The 2014 10-K contains the most recent set of figures and it looks like this:

  • cash: $372 thousand
  • current assets: $1.3 million
  • current liabilities: $10.5 million
  • yearly revenues: $5.1 million
  • yearly net loss: $2.8 million

It’s not every day that you see an OTC company with millions of dollars in revenues and a price of just over a penny, but again, things are a touch more complicated. The 2014 sales are about 16% lower than the ones recorded a year ago and although NTLK‘s management team have managed to cut down on some of the expenses, the net loss is still quite significant. As for the $9.2 million working capital deficit, we reckon that it speaks pretty well for itself.

Believe it or not, however, this is not the only problem. Last year, a certain Samer Bishay acted as NTLK‘s President. Apparently, Mr. Bishay and the rest of the management team didn’t exactly see eye to eye and if the 10-K is anything to go by, Mr. Bishay did a lot of not-exactly-nice things to the company. The report says, for example, that he filed a $4.5 million mortgage on NTLK‘s behalf and the current management team is now having troubles paying it.

Not surprisingly, Mr. Bishay’s account of what happened during Q4 of last year is altogether different, and if you’re invested in NTLK, you’ll need to wait and see what the Court thinks about the whole scandal.

Bear in mind, however, that the only ones who can really lose from the legal battle are the shareholders.

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