Spiral Toys Inc. (STOY) Is Not Playing Around (Or Is It)

STOY Stock, Spiral ToysLess than a month from reverse merging with Rocap Marketing, Inc. (ROCP), the penny stock of Spiral Toys Inc. (STOY) made its impression felt Tuesday by setting a 52WK high.  Shares of the start-up company that plans to connect toys and entertainment devices with mobile devices so kids can communicate, interact, share and update content closed at the HOD yesterday making every trader on the OTC go digging in their closet for their old Furby dolls.  While the near $1 price tag doesn’t seem to be scaring away too many as of yet, the pre-merger sale of STOY stock to 17 unnamed investors just might.

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STOY Stock Quote
Close 0.8743 Change (% Chg) +0.2943 (+50.74%)
High 0.8743 Low 0.58
Open 0.70 Prev Close 0.58
Volume 631,151 Avg Volume 6,821
14-Day Rel Strength 82.71% Market Cap $36.09M
52Wk High 0.8743 52Wk Low 0.20

To get the “is STOY a scam” out of the way, on November 21, 2014, while still Rocap Marketing, the powers that be completed the private placement of 4,897,333 shares of STOY stock to 17 investors for cash payment of $0.15 per share, or a total of $735,000.  A further concern is the $115,738 notes payable that were on the Company’s books as of September 30, 2014 that:

In connection with the acquisition of Spiral, the holders of the Notes Payable-related parties agreed the notes would not be payable until the Company has raised at least $2 million in financing, and the Company agreed that the holders could, at any time, convert the principal and interest on the notes into common stock at $0.25 per share.

Spiral Toys comes with a heavy hitter attached to it: Mark Meyers, Founder, President & Chief Executive Officer. Meyers has a history with interactivity targeted towards children having been :

  • Former Vice President of Interactive Studios at The Walt Disney Company Developed and Launched Several Key Interactive Franchises for the Walt Disney Company
  • Former Studio General Manager at Sony Computer Entertainment
  • Former Studio General Manager at Midway Games

Joining Meyers are David Christopher Adams (RivusTV Ltd. d/b/a Spondo, Beachball Media, and “Facebook Diaries”) on the Board of Directors and Robert Stewart (Stewart & Rijal CPA’s, Phoenix Prepaid Solutions, and Newsight Corp.) as the Company’s CFO.  The team collectively have enough history behind them that investors will feel confident owning STOY shares.

On Tuesday, Spiral Toys announced a partnership deal with C&C RFID, a Shanghai, China based near field communication (NFC) manufacturer, to focus on the research and development of new ways to use NFC technology in Spiral’s products, as well as the manufacturing of NFC chips for Spiral’s upcoming line of wireless-enabled stickers.  The mention of r&d is an indication that it’s unlikely any kids are going to be getting any Spiral products for their birthday or under their Christmas tree this year.

However, shortly after the name and ticker symbol change, Spiral Toys announced that they plan to launch their interactive plush toy line, CloudPets, on Direct Response Television on March 1, 2015.  They added as well the time frame, August 2015, when CloudPets will be released into mass retail stores nationwide.

Furthermore, looking back at the Q filing for the nine months ended September 30, 2014:

“Currently the Company is engaged by a major studio in the development of entertainment properties. During the three months ended September 30, 2014, this income amounted to $35,000, or 35% of reported revenues. The second line is based upon the sale of physical toys. The toys are sold through a third party distributor and Spiral receives 50% of the net profit per item. Only settled invoices are taken into revenue. During the period in 2014, the income associated with this second line was $63,602.”

So existing sales are there and while Elsa and Anna adorn every little girls bedroom after their massive impact on the toy market since Frozen made it on the big screen, Cloudpets could find a corner of those rooms when this Direct Response campaign begins.  In all honesty, all OTC traders care about is when the STOY stock marketing campaign begins (or did it already).

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About STOY Stock

Spiral Toys Inc. is a development stage company that develops entertainment products in both physical toys as well as digital media.

Click here to view the SEC filings for STOY.
Click here to view the website for Spiral Toys.

Authorized: 74,000,000
Issued and Outstanding: 41,276,887

Last 5 Trading Sessions:

Date Open High Low Last Change % Chg Volume
02/10/15 0.7000 0.8743 0.5800 0.8743 +0.2943 +50.74% 631,100
02/09/15 0.5200 0.6000 0.5200 0.5800 +0.0500 +9.43% 76,300
02/06/15 0.5200 0.5300 0.5050 0.5300 +0.0100 +1.92% 19,800
02/05/15 0.4950 0.5300 0.4950 0.5200 +0.0100 +1.96% 12,000
02/04/15 0.5000 0.5100 0.4900 0.5100 unch unch 5,100


Bottom Line:

There sure are a lot of $0.15 and $0.25 STOY shares out there, but penny stock traders seem to have shunned that to the side for now (or as long as STOY stock can remain bullish).  While it’s only just begun really, a close eye on who, if anyone, will claim STOY stock to be their newest pick could be the Paragon play that traders need in order to return to the OTC Markets.

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