Stock Lemon report on Junum Corp. (otcbb JUNM)http://www.stocklemon.com/
If the company is selling stock at .60 then why do you have to pay $4.00. With a market cap of $80 million and slew of Reg S offerings, JUNM wins our award of “Lemon of the Week”.
Date - August 21, 2001
According to companies 10-Q ending three months June 30, 2001
Gross Sales Net Loss ($3,154,447)
Shares Outstanding 20.641 million
PE Ratio -18.810 (Bloomberg)
What they do:
Junum Incorporated is a financial technology company engaged in Credit Management, Debt Exchange, and Financial Services. The Company has filed eight applications for patents however as they express in all of their corporate releases; “There can be no assurance that the Patent and Trademark Office will allow such patents or that, if allowed, the patents will result in any meaningful advantage.
Basically, this company sells credit management systems to individuals on the internet. Their business model is subscription based. I hope they know something that hundreds of other internet companies that have failed with this model did not know. We at stocklemon.com are most curious as to where they could spend $1.8 million in three months managing a one dimensional web site.
Financing Activities:
In their last SEC filing it states: ”Current cash and cash equivalents and cash that may be generated from operations will not be sufficient to meet our anticipated cash needs for the next 12 months. Accordingly, we are dependent on raising additional financing in order to continue operations. We will seek to sell additional equity or debt securities in order to fund or cash needs. The sale of additional equity or equity-related securities would result in additional dilution to our stockholders.”
It seems as if Junum has resorted to Regulation S offering to raise money. After giving their investment banker, Hornblower Weeks, an option to buy 50,000 shares at penny, Hornblower Weeks exercised all the applicable warrants immediately.
The one financing that seemed most tell tailing about this company occurred in June. Junum entered into an agreement to sell 708,333 shares of common stock at .60 cents a share. This sale was exempt from all registration under Reg S of the securities act of 1933. Why should the individual investor have to pay $4.00 for what a Reg S operator only pays .60 cents?
Management:
This is not the first public company for which David Coulter (CEO) has been associated. Mr. Coulter is the former CEO of ESAT inc. (otcbb: ASAT). In February of 2000 ASAT was also trading in the $4.00 range…. As of this report ASAT is trading at 5 cents. You form your own opinion about this situation.
Investor Relations
After a phone call to the IR firm that represents JUNUM, Madison Wall, I received an answer that went along the lines of, “we do not comment on market cap and we believe in the product that Junum has in the credit business.” Oh by the way, he also told us that they are yet to receive their annual payment of $90,000.
We need not say anymore…..look for yourself and read their filings.
*It is important to note that this company might have a future and might one day be a speculative buy, but that is not the case today. At these prices this stock is a true lemon.
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