Yesterday, FACT Corp. (PINK:FCTOA) gained almost 19% in value shifting a volume which ended up considerably higher than the average level. Not surprisingly, this run of events naturally paved the way for a classic pump-and-dump game with FCTOA stock.
When FCTOA closed trade last night, it had edged up $0.017, or 18.89%, to $0.107, making its first rise for the last four sessions. A total of 73,462 shares of common FCTOA stock changed hands, up 68% from the average daily trading volume of the company.
Operating in the functional food industry, FACT Corp. is mainly focused on creating healthy functional bake mixes. So far, the company has launched a proprietary Nutrition First(TM) brand which encompasses a multi-faceted line of products designed to support a healthy lifestyle.
As a result of its business operations, FCTOA claims to have grossed more than $13 million for the last 10 years. However, the company’s financial condition over the four-quarter period ended Sept. 30, 2011 is nowhere near as good. Its cash reserves shrank from $323K (in Q4 ’10) to $31K (in Q3 ’11). What is more, with an average quarterly current ratio coming in at 0.25, FCTOA is bound to face substantial difficulties paying off its short-term obligations within the next 12 months or so. Last but not least, the company has registered an average quarterly net loss of approx. $0.5 million.
Last Thursday, FCTOA announced it had relaunched negotiations with Mexican brokers, distributors and customers in an effort to both increase and diversify its product distribution on a market whose population is believed to have the highest obesity rate in the world. Therefore, if the company’s strategy meets with success, it could stand a good chance of improving its finances. Till then, the company’s stock will remain highly susceptible to paid promotions such as the one that started last night.
