Vizstar Inc (OTCMKTS:VIZS) Getting Crushed By Promotions
On December 10, 2012 Vizstar Inc (OTCMKTS:VIZS) announced that they have closed the acquisition of a company called Kimberly Parry Corporation and they started the next chapter in the confusing book called “The History Of VIZS“. Why do we think that it’s confusing? Well, the last time that we wrote about them, they were just switching their business from charter flights to oil and gas exploration. It’s pretty clear that neither the air transportation, nor the exploration businesses had worked out, but now VIZS seemed to have taken control over a company with real products, albeit in a sphere that they have never been involved in – skin care products. That’s a good thing, right?
It should be, but there is nothing to prove it. Since the acquisition was completed, VIZS have filed two quarterly reports – one for the period that ended on November 30, 2012 and one for the three months before February 28, 2013. The first one is of no real interest since it covers the period before Kimberly Parry Corp. and their products were part of VIZS‘ portfolio, but we were really excited to open the financial statement dated February 28 and see what’s going on. Here’s what we found:
- cash: $0
- total assets: $2 million (labeled “Investment in preferred shares”, no further explanations)
- total liabilities: $2.3 million
- quarterly revenue: $0
- quarterly net loss: $620 thousand
That really got us confused. We opened Kimberly Parry’s website and we saw that there are a total of 20 products, prices ranging from $16 to $68. We also checked the Facebook page and we saw that there are around 300 people who have clicked the “Like” button and yet, there are no revenues? It gets you thinking: “Are they selling the beauty and skin care products for free?”.
The confusion doesn’t end there. When you read through the notes on the financial statement, you see that most of it is copy-pasted from the previous report – the for the period before November 30 – and they haven’t even bothered to change the dates. The notes also disclosed that they have borrowed some money (no mention of how much) and they say that it will be sufficient. Here’s a question: “Where’s the cash?”.
One thing that they have diligently described in the report is the share issuance. And there’s been quite a lot of it. When Mr. Chris McConnell was appointed as a CEO, he received 150 million shares for his services. In January, they effected a 1 for 25 stock split and in February they raised the number of authorized shares to 9 billion. Not long after that VIZS gave their CEO additional 2 billion shares and a further 4 billion to an entity called Renewable Technology Solutions, Inc. All this stock should be restricted for the time being so it’s not that much of a worry, especially if you are in for a quick trade.
Read further down, however, and things don’t look so bright. On April 1 VIZS issued a total of 637 million common shares to a third-party note holder in order to reduce their debt by just $63 thousand. A month and a bit later, a third party paid Stock Mister $47 thousand for a pump. Stock Mister, on the other hand, distributed some of that amount among smaller promoters so that the awareness campaign is bigger and on Tuesday it did manage give VIZS a push when the ticker gained nearly 50%. Yesterday, however, there was a huge crash and VIZS‘ shares lost 57% of their value, causing a lot of traders to lose huge amounts of money on Stock Mister’s latest play.
Whether it’s the aforementioned, 637 million shares that caused the slide or something else, we can’t be sure. Still, this whole story goes to show how badly promoted penny stocks could turn out. Especially when, like VIZS, there’s nothing to suggest that they are moving in the right direction.