Universal Detection Technology (OTC:UNDT) markets and resells detection devices for chemical, biological, radiological, nuclear, and explosive threats. Up to this point the company has been good at two things primarily. One is massively diluting its common stock, and the other is losing money. At the same time, however, it has been promoted numerous times.
Yesterday, after 6.4 million shares had been traded UNDT closed flat at $0.0004, which has been the level it trades at for the last couple of months. After the markets had closed yesterday we received a promotional newsletter about UNDT.
The promoter, who was compensated $5 thousand for a one day service, brags about the performance of UNDT when it was promoted back in March. Indeed back then UNDT skyrocketed in a day, but traders should keep in mind that the compensation then was nine times the current one. More importantly, the spike was the result of the The Fukushima Daiichi nuclear disaster.
On top of that it proved to be nothing more than a spike and the price pulled back almost immediately, despite the company’s numerous press releases about orders for its products. Right now there is no new nuclear disaster to fuel any such spikes.[BANNER]
The latest filing of UNDT as about the issuance of 500 million shares to Mr. Jacques Tizabi, CEO and director of UNDT. This only adds to the terrifying dilution. From December 31, 2010 to March 31, 2011 the company’s OS grew from 2.3 billion to 3.6 billion.
Dilution is not the only dismal thing about UNDT’s financial report. As of Mar. 31, the company had $28 thousand total assets and staggering $4.6 milllion total current liabilities. Some of the latter may have been converted into common stock too – further adding to the dilution.
It is possible the orders that UNDT announced earlier this year will manage to bring some money, however, there was no disclosure as to actual amounts. At the same time the company’s track record is less than inspiring. With the rate it has been burning through money, it is unlikely a couple of months of orders will make up for the hundreds of thousands of losses each quarter.
That being said, traders should judge whether a repeat performance is in order at this moment.
