Quasar Aerospaces (OTCMKTS:QASP) Flies Out of the Triple-Zero Levels

3QASP.pngGenerally speaking, marijuana and airplanes don’t mix too well. Despite this, Quasar Aerospaces (OTCMKTS:QASP) said in a corporate update yesterday that they want to implement these two things in their business plan.

In fact, they said quite a lot of things. They were quick to point out that despite the lack of frequent updates, the company is not a shell. They said that they are continuing with their business plan and informed us that some memorandums of understanding should bring in some fresh revenues.

Almost on a side note, they mentioned that they realize the potential of the newly legalized and booming cannabis industry and claimed that they want to pursue the opportunities presented by it. No details were given around the new business direction, but it would appear that the market simply doesn’t need them.

Nearly $1.1 million worth of QASP stock changed hands in just six and a half hours while the ticker stormed off the triple-zero levels, added a whopping 166% to its value and closed the session at $0.0016 per share. It finished the day above the $0.001 for the first time since July and the buzz around message boards suggests that the marijuana hype could push it further up. Everyone seems pretty excited by the newly-born pot stock and we’re all waiting for an update on the fresh business plan that could potentially turn QASP into a serious contender. While we’re at it, however, we might as well mention one or two facts that could get easily overlooked by some of the overly enthusiastic investors.

Let’s start with the latest financial report. It covers the nine months ended September 30, 2013 and it hasn’t been audited or reviewed by a third party. Here’s a summary of the most important figures:

  • cash: $42 thousand
  • current assets: $101 thousand
  • current liabilities: $218 thousand
  • revenue: $258 thousand
  • net loss: $304 thousand

As you can see, QASP‘s management team were right when they said that they are indeed an operating entity. Unfortunately, the report shows that there’s been a 17% drop in revenues year-over-year and there isn’t an explanatory paragraph telling us what happened. We should note, however, that they’ve also managed to cut down on the expenses which is a definite plus point.

If you take a look at the footnotes to the financial statements (filed in a separate document), however, you’ll see that there’s some more bad news. On the very first page, QASP admit that some vital bank statements are missing from the company’s offices. Records supporting the issuance of debt securities have also disappeared. The current management team suspect that the former officers are responsible for this, but, at the moment, nothing is certain.

QASP_logo.pngAnd while they’re figuring out what went wrong, some questions arise around QASP‘s share structure. According to the OTC Markets company profile, the float was hovering around 814 million shares a few months ago. Yesterday, however, QASP racked up a trading volume of more than 948 million shares. As you probably know, it’s not impossible for the number of shares changing hands in a day to exceed the total O/S count, but it is an extremely rare phenomenon which, in turn, leads some people to believe that significant dilution has occurred over the last few months. The missing documents and the infrequent updates mean that the management team have no way of proving the skeptics wrong.

And since we mentioned the people currently at the helm, we might as well give you one more fact. QASP is headed by Donnell Vigil who was once the CEO of a penny stock called NHS Health Solutions, Inc. (NHSH). NHSH’s stock got suspended and was later revoked by the SEC due to delinquency in the filing of their financial reports.

The enthusiasm around QASP certainly seems strong at the moment, but there’s still too many unknowns that could potentially put a spanner in the works. Treading carefully and doing a lot of due diligence might not be a bad call.

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