Georgi Kamburov

Virtual Sourcing, Inc (OTCMKTS:PGCX) Climbs Higher

by Georgi Kamburov August 5, 2014

For close to 11 months the stock of Virtual Sourcing, Inc (OTCMKTS:PGCX, PGCX message board) went nowhere but down. Investors seemed reluctant to trust the company and as a result it slid down from $1.1 to just $0.0023 at the end of June, this year.

One of the reasons for the massive loss in valuation could be the widespread pump campaign that began back in August, 2013. The artificial hype it created was the main force that boosted the company above the $1 dollar mark. Since then the pumpers have returned on a couple of occasions to tout PGCX with the March 14 wave of email alerts being the latest one.

But the pumpers are far from the only red flag around the company. If you open the S-1 registration statement filed just a couple of days ago and turn to page 44 you will see that at the end of March PGCX was in a terrible financial state:

• $276 cash and total assets!!!
• $961 thousand total liabilities
• ZERO revenues
• $1.3 million net loss for the nine months period

Still, with the start of July investors’ sentiment toward the stock changed drastically and PGCX began reclaiming some of its lost ground. The climb was far from smooth with an almost equal number of days in the red as there were green ones but nonetheless it climbed higher. Yesterday it broke through 1 cent per share and continued rallying until it reached $0.019 at the time of the closing bell, a gain of exactly 100%.

The recent resurgence was sparked by a distribution agreement signed by PGCX’s subsidiary Allied Recycling Corp (ARC). According to the terms of the deal ARC is going to deliver chemicals used for oil and water separation. Just a couple of days later the first purchase order was announced. The numbers mentioned in the PR were rather impressive – revenues ranging between $3.6 million and $5.3 million with profits between $700 thousand and $1 million. On July 30 another press release announced that the first barrels were shipped.

There are some things that need to be considered though. In our previous article we already warned you that in the past PGCX has made similarly optimistic announcements – back in August 2013 they were talking about an acquisition that was supposed to bring around $9 million by the end of the year. As you can see from the financials of the company that clearly didn’t happen.

The purpose of the S-1 statement was to register 35 million shares. 25 million of them are going to be sold by the company in an attempt to secure additional funds but in a rather strange decision each share was priced at $1. Such valuation is over 5000% higher than the current market price of the stock.

The other 10 million shares are underlying a note issued to WHC Capital, LLC on December 23, 2013. Under the terms of the note it can be converted at a price equal to 50% of the lowest intra-day trading price.

Despite the recent positive events PGCX remains an extremely risky choice. The almost non-existent financials and the millions of extremely cheap shares that could be issued demand the use of caution. Do your own due diligence and never make decision based solely on hype.

In early trading today PGCX is sitting 10% in the red at $0.017.

Comments 1

1. Guest
August 07, 2014, 10:34AM

Quotes excellent work Georgi!!
we need more people writhing the truth about those scam
i almost felt for it,after the 100% surge on monday the company cought my interest.i look at investor hub to see what the buzz was at that time,it took me 2 minutes to realize that the board on investor hub was full of pumper and decide to do my due diligence,because of people like your self Georgi who wroth about the truth of this pumper and false news release by those company,you make it a lot more difficult for them to succeed.
tank you very much!

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