Dragni Dragnev

Pocket Games Inc. (OTCMKTS:PKGM) Is On The Move Again

by Dragni Dragnev April 26, 2016

Pocket Games Inc. (OTCMKTS:PKGM, PKGM message board) exploded 150% up the charts yesterday, after announcing that it has entered into an acquisition agreement with Kicksend Holdings.

Evidently, this press release attracted the attention of a lot of people, and as a result of their reassured buying, the ticker soared... All the way to the $0.002. That's not an impressive price per share, but a bit of due diligence reveals that PKGM's abysmally low chart position is absolutely warranted.

After all, we're talking about a company, whose latest quarterly report looked like this:

  • Cash and cash equivalents - $6 thousand
  • Total Current Assets - $22 thousand
  • Total Current Liabilities – $1.1 million
  • Quarterly Revenues - $5 thousand
  • Quarterly Net Income - $429 thousand

These numbers reveal some pretty glaring inconsistencies. The lack of cash and overall assets is no surprise – PKGM has always been a mediocre underachiever with almost nothing but debt to its name. How, then, did it manage to achieve a net gain of $429 THOUSAND after making just $5 thousand worth of revenues?

Easy - it resorted to some creative accounting. Writing a positive $763 thousand under “change in fair value of derivative liability” afforded a nice big number, from which all the company's losses were subtracted. However, investors would do well to remember that this number does not represent actual commercial achievements or steps upward.

And speaking of steps upward – can you guess what else took a step upward a couple of weeks ago? If your answer was PKGM's authorized shares, they congratulations - you guessed correctly. Their count was upped from 500 million all the way to 5 BILLION not three weeks ago.

Investors are advised to seriously consider that fact, as well as the fact that the word “convertible” can be found an impressive 93 times in the company's latest financial report, and in most cases it appears in relation to debt that can be turned into stock at discounts ranging from 30% to 49%.

Then investors would do well to remember that this latest acquisition PKGM has made has been paid for with “stock and debt”, under circumstances that are as of now unclear.

All in all – PKGM due diligence reveals a grim picture, that does not bode well for the ticker's chances of maintaining its course or even retaining ground. Let the buyer beware.

Comments 0

Type the characters that you see in the box (5 characters).