Pyrogenesis Canada Inc. - PYR

Quarterly Update

Though this thing is now under a buck, the laughs continue, so thought I would throw out a quick update.

Though their filings don’t appear on the US Edgar site as of yet, they are available on the Canadian version. 

First, on revenues.  $5,657,783 was the given number, but $4,243,138 came from their “Purevap” product line which comes from a related party that doesn’t pay their bills.  And what was in the sale?  Well, $3.6M of it was for “Intellectual property,” which is why their gross margins are in the 75% range overall.  Excluding “intellectual property” from the mix, revenues declined from $8.4M to $2M year over year, or over 75%.

Second, overall A/R stands now at $26.7M, or well over a year’s worth of revenues, and much of it due from a related party.

Third, their “backlog” is supposedly in the $26M range, down from $35.3M last quarter.  Since I’m pretty sure that an “intellectual property” sale wouldn’t qualify as part of any backlog number and was likely done to rescue what would have otherwise been a complete disaster of a quarter, that would mean around $8M of their backlog basically disappeared.

Finally, cash is down to $2.3M, which likely won’t last them through the end of the year.  They have $6.6M in “strategic investments” which is mostly stock and warrants in related party HPQ Silicon Resources (HPQ.V), currently trading for something under 30 cents a share.

I would think a highly dilutive equity raise is forthcoming, which will likely be the final nail in this stock.  The company’s blather about $100M RFP’s and additional naval contracts are the stuff of dreams.