Stocklemon reports on Zeros and Ones (OTCBB:ZROS)

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Two months ago you could buy a share of Zeros and Ones for a quarter – and get change.  As of today, it has skyrocketed to a current price of $1.60  With 114 million shares outstanding, Zeros and Ones had come close to being a $200 million dollar company.  Stocklemon believes this company is a major lemon and the recent run-up is due to the work of stock tout Tobin Smth.  This report will give a more thorough analysis of ZROS.

Shares Outstanding- 114 million

Cash in Bank as of last Qtr:  $5,611 **
( ** No, that is not quoted in thousands!!)

Last 3 months R&D Budget:  $85,000  ($555,000 since inception)

Revenues Since Inception:  0

http://www.sec.gov/Archives/edgar/data/845807/000114420406049244/v058516_10qsb.htm

Zeros and Ones is telling the investing public that they have revolutionized the way media is delivered and therefore will dominate a market niche.  This has all happened in the past 3 months while the company has spent a paltry $85,000 on R&D.  So we as investors are supposed to believe that with a total R&D budget since inception of  $555,000, this small company has outsmarted all the big boys – including Microsoft, Cisco and all the others – and found the “Holy Grail” of content delivery.  And we are supposed to believe this with 0 revenues and 0 strategic investments. 

Tobin Smith Must Be Investigated.

Much of the run-up in the stock is due to the recommendation by Changewave newsletter writer Tobin Smith.  Tobin is also a Fox commentator.  Listen to what Tobin has to say about ZROS and you will see that he sounds no better than a two bit stock promoter.

http://www.etvmedia.com/etv/Custom/Phillips/wavewire_hub.jsp?channel=904

This is not the first time Stocklemon has critiqued Tobin Smith.  In 2003, Tobin flaunted the same bullish language on Interpharma (AMEX:IPA).  As the stock reached $7, he told his subscribers this was going to make them rich.  Stocklemon warned there was a huge dilutive overhang.  The Marketwatch article below commented on the battle between Tobin and Stocklemon:
http://www.findarticles.com/p/articles/mi_qn4189/is_20031003/ai_n10168082

Here’s what happened:
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=IPA&sid=0&o_symb=IPA&freq=2&time=12

Interpharma never saw the light of day and Tobin’s subscribers ended up eating the dust….after he suggested they take their stock out of street name to beat the short sellers.  The stock currently trades at $1.67 a share. 

More interesting facts about Zeros and Ones:

They list 7110 Sunset Blvd Los Angeles as their corporate address.  That is a P.O.  Box in a postal center.
http://finance.yahoo.com/q/pr?s=ZROS.OB

 

The Chairman of ZROS is Mark Laisure.  Mr Laisure has previously served as a director of two other public companies.  They both currently trade at a fraction of a penny.

BMOO http://finance.yahoo.com/q?s=BMOOE.OB 

FONE http://finance.yahoo.com/q?s=FONE.PK  

Cheap Stock Galore.  10 cent stock for everyone (….everyone except Changewave subscribers, it seems. )

Here is a sampling of some of the stock transactions done over the past 5 months in Zeros and Ones.

  • “On October 9, 2006 we issued 2,500,000 shares of common stock pursuant to the conversion of a $250,000 of Convertible Note at the request of the note holder.
  • On October 23, 2006 we issued 660,000 shares of common stock for legal services performed during the year.
  • On October 23, 2006 we issued 200,000 shares of common stock for legal services performed during the year.
  • “On October 23, 2006 we issued 40,000 shares of common stock for legal services performed during the year. .
  • On November 20, 2006 we issued 2,000,000 shares of common stock pursuant to the conversion of a $200,000 of Convertible Note at the request of the note holder.
  • On December 31, 2006 we issued 158,730 shares of common stock pursuant to the conversion of a $25,000 of Convertible Note at the request of the noteholder,
  • On December 31, 2006 we issued 285,715 shares of common stock pursuant to the conversion of $45,000.
  • On December 31, 2006 we issued 158,730 shares of common stock pursuant to the conversion of a $25,000.
  • On December 31, 2006 we issued 200,000 shares of common stock as payment for services previously rendered.”
BUT HERE IS OUR FAVORITE!!!

In the same week that the stock started to run we see this transaction.  Yet, the recipient of this largesse – a 10 million dollar bonanza at today’s prices — is not disclosed. 

 

“On February 13, 2007 we issued 5,333,333 shares of common stock pursuant to a Stock Purchase Agreement. We received $600,000 in consideration for the sale, and issued warrants in connection with the agreement. “

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=zros&sid=0&o_symb=zros

Conclusion

Stocklemon believes that Zeros and Ones is nothing more than a stock promotion that is being perpetrated by an experienced stock tout.  Stocklemon believes “Zeros and Ones” is an apt name for this diluted pile o’ paper – and observes that the fundamentals support a price where the zeros and ones are all to the right of the decimal point.   Shame on you Tobin Smith.

Cautious Investing To All.