Borislav Tonev

Virtual Sourcing, In (OTCMKTS:PGCX) Bouncing all over the Chart

by Borislav Tonev July 28, 2014

Back in August 2013, Virtual Sourcing, In (OTCMKTS:PGCX, PGCX message board) received a $750 thousand promotion and as a result, it hit an all-time high of $1.10 per share. Right now, after bouncing and gaining a mind-boggling 178% in a matter of just three sessions, it's sitting at $0.014.

The chart is pretty horrific and you should probably ask yourself: “Who would want to buy this stock?”.

Apparently, lots of people. PGCX did register healthy gains over the last few sessions, but it also experienced some active trading. The cumulative dollar volume for Thursday and Friday alone stands at well over $700 thousand. Lots of people are interested in the stock, but the problem is, most of them have either skipped on the due diligence, or are prone to taking huge risks.

The reason for the current spike appears to be a press release from July 24 according to which PGCX's subsidiary, Allied Recycling Corp has received its first purchase order. Delivery of chemicals for oil and water separation should begin on Wednesday and it should bring between $3.6 million and $5.3 million in revenues for the duration of the purchase order.

Sounds good, but if you check out some of PGCX's older press releases, you'll see that taking their words with a grain of salt might not be a bad call sometimes. As you have probably guessed already, we covered August 2013's promotion and if you check out our very first article dedicated to PGCX, you'll see that back then, they were talking about an acquisition that was supposed to bring around $9 million in revenues before the end of last year.

That didn't happen. In fact, three weeks ago, PGCX filed an S-1 registration statement and the financial statement (it can be found on Page 44 of the filing) contained in it shows just how horrific the company's position is. Here's what they had on March 31:

  • total assets: $276 in cash
  • current liabilities: $961 thousand
  • NO revenue since inception
  • net loss for the nine months ended March 31: $1.3 million

We reckon that the figures above speak pretty well for themselves, but we should probably note at this point that the financial statement isn't the only red flag found in the S-1.

As you can see from the very first pages, the purpose of the filing is to register a total of 35 million shares of common stock. 25 million of them will be offered to the public. If you think that PGCX is a solid company and if you want to help them strengthen their laughable balance sheet, you can contact them and purchase some of those 25 million shares at the price of $1 per share (that's right, a 7,000% premium on the current market price).

The rest of the shares being registered through the S-1 are underlying a certain note that the company issued on December 23, 2013. A quick check reveals that the note in question is held by an entity called WHC Capital, LLC, it currently carries a principal amount of $50 thousand and it is convertible into shares at a “price equal to 50% of the lowest intra-day trading price of our common stock for the ten trading days immediately preceding the conversion”.

For the record, if WHC were to start converting the note right now, they will be able to get PGCX shares at $0.0015 a piece (around 89% below the current market price). Bearing this in mind before deciding on your next move is, we reckon, absolutely crucial.

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