Safe Code Drug Technologies, Inc. (OTC:SAFC) Rise on Zentec Promotions
The new year starts with a wreath of small cap companies promising future development, and each has its own size and color, requiring your judgment as investor. The case of SafeCode Drug Technologies, Inc. (OTC:SAFC) calls for a deeper evaluation of risk The company produces a voice-recognition system for drug administration and currently it attracted investment from Israel-traded Biomedix Ltd.
SafeCode hopes to take a product to market with the knowledge of Biomedix, as it still lingers in the development stage. The joint venture improved the financial situation of the company:
- $103,704 cash, from 0 dollars in 2011
- $111,610 total liabilities
- Zero revenues
- $21,600 net loss
The group shows a modest, pre-market activity and a still too high market capitalization of $2.8 million. Its voice recognition software, hardly an original idea, is still with a “patent pending” status, meaning little in terms of real marketing success. The company was incorporated as development stage at the end of 2011 and was barely traded until the fall of last year, when promoters took it up as their next pick. The November pump by HotShot Stocks tripled the price of the penny stock to 30 cents, but later it fell more than 95%. Its current climb threatens to repeat the pattern with sharp losses within a few days.
It is also a red flag that a buyback program should start at a relatively low price and coincide with an ongoing promotion. The company claims it will keep the shares in its treasury for future new issues. The buyback is at $0.15, and the SAFC ticker easily jumps twice this value on pumps. The company has not given any date for re-selling the shares, and a re-sale may happen any time.
Currently, the Israeli business incubator started a buyback program for SAFC shares and invested $200,000 in the company, thus improving its financial standing. But only the future will show if real deals will materialize for the ingenious system that can lock drug containers unless the name of the drug is spoken aloud. SAFC relies on doctors’ desire to avoid last-minute wrongful administration of drugs.
The promotion for SAFC is coming through a third paying party, Zentec, with a budget of $15,000 and a single focus. The pumper shows no other history, although some of the sub-contractors are well-known pumpers with a past record of sore failures. A major pump for the SAFC came from Darth Trader, also known as The Stock Psycho. This pumper’s picks deserve the evil reference, since they all meant doom for investors’ money. Greenway Technology Inc. (OTC:GWYT) went exactly that way, losing more than 95% after the November 19th pump.
In the case of companies like SAFC, it is best to estimate your own taste for risk, knowing that gains and falls come fast and even within a single trading day.