Borislav Tonev

Pocket Games Inc (OTCMKTS:PKGM) is Still Sliding

by Borislav Tonev February 19, 2016

Mere ten days ago, people were scrambling to accumulate as many shares of Pocket Games Inc (OTCMKTS:PKGM, PKGM message board) as possible. Investors were hyped up about the acquisition of Viximo which was completed on February 9 and they were convinced that they're getting in nice and low. Right now, they're not so sure.

The ticker first crashed during last Friday's session when it lost more than a fifth of its value. The short week began with a bounce, but after a massive 46% crash on Wednesday and another 3% slip-up yesterday, it stopped at $0.0077 – a rather worrying 62% below the peak logged on February 9. So, why are investors feeling uneasy?

Well, on Tuesday, PKGM filed its belated 10-K for the period ended October 31 and the figures in it are rather disappointing:

  • cash: $24 thousand
  • current assets: $52 thousand
  • current liabilities: $1.9 million
  • yearly revenues: $24 thousand
  • yearly net loss: $2.5 million

Clearly, the much talked about Idol Hands game PKGM launched in February 2015 isn't very popular. Investors can now hope that with Viximo on board, things will start to pick up.

The thing is, hope is all investors have. The company did file two identical 8-K forms detailing the company's newest acquisition, but the filings don't contain Viximo's financial statement which means that we've no idea how big the benefits will be for PKGM's shareholders.

We, like the shareholders, are eagerly awaiting to find out. We're also curious to find out what the reason for the horrific dilution PKGM has gone through is.

The Subsequent Events section of the annual report says that “Subsequent to October 31, 2015, the Company issued a total of 36,856,326 shares of common stock” (a whopping 151% dilution in a matter of just over three months) and it then provides absolutely no further details. Whether all this share printing has something to do with the $240 thousand worth of convertible notes outstanding at the end of October is (hopefully) for the next report to tell.

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