PF Hospitality Group Inc (OTCMKTS:PFHS) Shoots Up Again

PF Hospitality Group Inc (OTCMKTS:PFHS) has been rather active lately. The daily volumes are way above the average values and the stock is making some rather impressive swings. Although it showed a bit of hesitation at the end of last week and the beginning of this one, yesterday, it more than made up for the correction. In a matter of just six and a half hours, it surged up by a whopping 34% and it closed the session at $0.87 per share.

The reason for all the excitement is a paid promotion which took place last week and was garnished by a couple of peculiarly timed press releases. The first one didn’t really contained any news at all. It said that PFHS want to launch a new restaurant concept called Shaker & Pie, but the people who had read the Form 10 filing published two weeks prior to that already knew about it. The second PR said that the company has engaged some designers to further polish the concept.

Unfortunately, while the press releases are full of forward-looking statements, they do fail to address some rather important questions. Neither of them says, for example, anything about the company’s current financial situation which is a bit of a worry because the aforementioned Form 10 told us that a few months ago things were not exactly perfect. Here’s a summary of the figures recorded at the end of Q2:

  • cash: $82 thousand
  • current assets: $93 thousand
  • current liabilities: $1.1 million
  • nine-month revenue: $273 thousand
  • nine-month net loss: $160 thousand

Of course, we mustn’t forget the $1.3 million debenture that PFHS issued after the closing of the reverse merger between Pizza Fusion and Kalahari Greentech, but we also mustn’t forget that it’s convertible into stock at a 35% discount.

And while we’re on the subject of convertible debt, we should also point out that according to the SEC filings, on August 25, 2015, PFHS converted a little over $90 thousand worth of principal amount and interest into exactly 40 million shares of common stock. The conversion rate works out at $0.002 per share which, as you may or may not have calculated already, is around 99.7% below the price at the end of yesterday’s session.

About twenty-five minutes after today’s opening bell, PFHS is sitting at around $0.83 per share – about 4% in the red.

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