Thirty minutes after Friday’s closing bell when traders had just about given up on APS, Pazoo Inc. (PZOO), operators of www.pazoo.com, filed their 10-Q. An obvious choice for a promotion with the sexy story and planned commercials to run soon PZOO stock has gained 215% since the 0.10 alert we issued on it nearly a month ago. Couple this, with Company President and CEO, David Cunic, appearing on MoneyTV with Donald Baillargeon, and it appears ready to see some huge volume.
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PZOO Stock Chart
Close: 0.315 (HOD), up 0.035 (12.50%)
Volume: 45,000
Authorized: 980,000,000
Issued and Outstanding: 70,492,000 as of August 15
Preferred Series A Outstanding: 5,595,306 as of June 30
Pazoo reported net revenues of $48,227 Q2 which is uncommonly high in my opinion for a start up company that just launched. Encouraging to say the least G&A expenses are not extraordinary coming in at just $54,748, almost exactly $10,000 more than the gross profit for the three months ended June 30, 2012; $44,701. (see 10-Q here) What is going to interesting is how the Series A Preferred Stock is handled since the shares are convertible into 10 shares of common stock at the option of the holder.
Integrated Capital Partners, Inc., once the investor relations firm for VitaminSpice, LLC (VTMS), holds virtually all of the 5.6 million Series A shares. In April and May 2012, they were issued 1,400,000 at 0.05, 1,080,000 of which were converted into 10,800,000 shares of common stock. Mathematically, that’s a cost basis of 0.005 each.
In June, Integrated received another 500,000 shares of Series A Preferred Stock at 0.50 each, as well as another 95,306 shares of Series A Preferred Stock which represented payment of a 5% stated Series A Convertible Preferred Stock dividend. On top of that, Integrated was simultaneous issued warrants to purchase Series A Preferred Stock to the tune of 1,400,000 warrants to purchase 1 common share for each Series A Preferred Stock at an exercise price of 0.05 per common share as well as another 500,000 warrants to purchase one share of Series A Preferred Stock for each Series A Preferred Stock at an exercise price of 0.75.
Although the warrants are exercisable 3 years from the date of issue and none had been exercised as of June 30, 2012, if Integrated did exercise them all, they would have 1.4 million shares of PZOO at 0.05 each and another 500,000 Series A Preferred Stock for 0.75 each giving them a grand total of 1.42 million as of June 30, 2012. Converted into common stock would be another 5 million at 0.05, 5 million at 0.075, and 420,000 at 0.005.
Beyond that, Gotham Capital was issued 2,000,000 common stock purchase warrants exercisable on a cashless basis at an exercise price of 0.01 per share. Is PZOO going to become another VTMS which ran from under 0.035 to 0.435, 1,142.86%, from November 1, 2010 to 3rd week January, 2011?
VTMS Stock Chart
About PZOO Stock
In July 2012, Pazoo signed Equities Awareness Group as their IR firm for $50,000 and 3,000,000 shares of restricted common stock and 2,000,000 warrants that will not be exercisable until April 6, 2014 and will expire on April 6, 2015. Also, Integrated converted 400,000 shares of Series A Preferred Stock into 4,000,000 shares of PZOO stock.
In August 2012, Pazoo issued 1,000,000 shares of restricted common stock and a warrant to purchase 4,000,000 shares of PZOO common stock at an exercise price of $0.01 to Maiella Investment Holdings. Again, the warrants will not be exercisable until April 6, 2013 and will expire on April 6, 2014. Also, another 1,500,000 Series A Preferred Stock was issued to Integreated at 0.50 per share. Simultaneously, Integreated was also issued another 1,500,000 warrants to purchase 1 share of Series A Preferred Stock for 0.75 per Series A Preferred.
Bottom Line: PZOO has a sexy story and needs to be on the list of pre-promotion penny stocks. Integrated and insiders control a large portion of all the shares outstanding and convertible Preferred Series A shares. The August issued Preferred Series A converted to common are 30 million alone, 15 million at 0.05 and the other 15 million at 0.075.
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