Yesterday the stock of VOIP-PAL.COM INC (OTCMKTS:VPLM) opened at a little over 8 cents per share but when the closing bell rang it had surged to $0.105, its highest point for the day. In just a single session the stock added close to 35% to its value. Interest towards the company also increased significantly with the daily volume of nearly 2.5 million shares surpassing the monthly average for the stock by more than 11 times. Is the upwards run going to continue though?

Well, yesterday’s session seems quite similar to the one from June 3 when the stock once again suddenly spiked up the chart by over 30% on a massive volume. Back then there was no discernible reason for the excitement and as a result VPLM began wiping its gains from the very next day. This time it may happen again as once more there is nothing that could sustain yesterday’s positive momentum.

It is true that the company’s patent portfolio is enough to keep investors from losing hope entirely but it should be noted that the development of the technology began 12 years ago and so far the company has not presented any meaningful results. VPLM are still looking for ways to monetize their patents. To say that their efforts have not been very successful would be an understatement – according to the financial report for the quarter ending June 30 that was filed just a couple of days ago VPLM have:

• $25,525 cash and total current assets
• $60,732 total liabilities
• ZERO revenues
• $242 thousand net loss

It is true that for its fiscal 2013 and 2014 the company did generate some revenues but that fact becomes far less impressive when you see that the reported sums are $150 and $80, respectively.

In addition the common stock of the company has been diluted significantly. Through the years millions upon millions of shares have been issued as a conversion of debt at discounted prices. Although the conversions have slowed down they are still not over – during the nine months ended June 30, 2015, 7,235,000 shares saw the light of day at $0.05 each. The company currently has 994 million outstanding shares out of the 1.04 billion authorized.

VPLM have been trying to improve their share structure by canceling and returning to treasury around 103 million shares that the company believes were issued illegally. VOIP-PAL has filed suit against Locksmith Financial Corp., TK Investment, Richard G. Kipping, and Terry Kwan alleging that the defendants “systematically conspired, schemed, and defrauded Voip-Pal and its shareholders out of millions of shares of stock through a series of deceptive debt conversions, stock issuances, and non-cash accounting transactions.”

It should be clear that VPLM remains a risky choice for an investment. Although the company lists its intellectual rights as having a valuation of $11.4 million investors should keep in mind that as the financial report states “No independent valuation of the carrying value of the company’s intellectual and goodwill costs has been performed”. And without anything to keep the momentum going the stock could be unable to sustain its current market cap of $104.5 million.

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