LMCO Looks To Be Insolvent & We Ain't Li-ion
We're Sauer on SENY
also: NECA, TAXS
We're Sauer on SENY
also: NECA, TAXS
In what looks to be a last ditch effort to allow insiders to cash in before the company declares itself to be insolvent and/or restructures in such a way as to make the current share valuation essentially worthless, Li-ion Motors (LMCO), begins a new Pump & Dump campaign.
We are not talking about a new company here, with a rosy outlook as it suddenly comes up with new pretend technology that have customers giving up their first born to acquire. We are talking about a 7 year old company with a real, albeit failing,
business and technology, that has had to disguise its failures over the years with multiple reverse splits, name changes and four symbol changes. It's no coincidence that are so bad at LMCO, that Mehboob Charania, the brains behind the Skypower Solutions (SPOW) PnD, is long gone from the Board of Directors. Still the two companies remain joined at the hip, as SPOW's only justification for existence is LMCO, supplying them with lithium battery technology for their electric cars.
It seems that the insiders are recognizing that as go LMCO's fortunes so goes SPOW and vice versa. The underperformance of both companies (SPOW has breached $1.5 million worth of agreements with LMCO) leaves both of their futures in doubt. SPOW's October Pump & Dump campaign has left bag holders with 97% losses, as the share price drop from 60 cents to its current 2 cents in a matter of 5 weeks. We calculate that SPOW insiders have dumped a few million dollars of intrinsically worthless shares ahead of LMCO's revelation that things are not rosy and they are now taking whatever they can get. Now many of these same insiders are looking for a repeat opportunity to cash up with an LMCO PnD.
To one who actually does some due diligence, LMCO's financials speak volumes. The company is broke. According to its December 15th filing for the quarter ending October 31, 2011, LMCO has $284 in the bank and cannot collect on $1.75 million in receivables, which it has all but written off. The company owes $2.4 million, $1.2 million which are accounts payable. Last quarter's revenues of $172K resulted in a net loss of $287K. And this is the story of every quarter. LMCO bleeds cash and there are signs are that it is running out of resources to get more from. First there is the IRS's quarter of a million dollar tax lien against over $300K owed by the company in payroll taxes. There's also a court judgment held by a customer who ordered a car and cancelled the order when the company could not deliver. The company has been unable to fully refund him.
With any LMCO survival plan, significant dilution is inevitable. There has already been a 70% increase in the number of shares issued and outstanding over the last year and last summer the Board of Directors voted to triple the number of shares the company is authorized to issue. That is a sure sign of things to come.
Anybody looking to LMCO as an investment is asking for trouble. Just ask the SPOW bag holders. In fact, we think that the share price could head straight down Thursday, as insiders fight their way to the exits. But with all the gullible penny players out there, who knows? It may gap up before crashing down. But crash down it will. It has no choice.
Sauer Energy (SENY) is doing its usual monthly refresh of its now long term Pump & Dump campaign. Today, tout, WhisperOnWallStreet.com is joining the fray, as it boasts about SENY's share price sitting at a support level from last September. We say that proves that this is a Pump & Dump.
Since last September, the promoters' emails have come in three clumps and each time investors took a hit, as the share price came back to that "support level". As a result of the current campaign, which started on November 3, most investors are down as much as 40%. During the first two slews of pumping emails on November 3rd and 15th, the share price stayed pretty flat as insiders sat on the offer and resisted the urge to whack bids. The third push, which came on December 1 and introduced the Blue Wave Advisors group of touts to the pump, managed to get the share price up to 95 cents with plenty of buying on the way up. These buyers are the ones who took the brunt of the hit, as the stock has come back to where it started from (as they always do) down to 50 cents. WhisperOnWallStreet, who claims to have their services to SENY financed by Blue Wave Advisors, issued their email prior to the company issuing a press release, indicating that they know that one is coming, before Thursday's open. SENY has a tendency to coincide their email campaigns with press releases, to try and give the pump extra oomph. As the Blue Wave touts have already alerted us that they too have a pick coming at the open tomorrow, so we suspect that they'll be pimping SENY as well.
As we told you in a previous alert on SENY, we are concerned about the books being cooked by John Kinross-Kennedy, a favorite auditor amongst past penny stock schemers in California. Perhaps the most prevalent example of his complicity in these conspiracies, is his enabling of Jon Fullenkamp's manipulation of Victory Energy Corporation (VYEY), which resulted in Fullenkamp's eventual ouster by the board he himself named, and a restatement of financials. The Fullenkamp/Kinross-Kennedy conspiracy resulted in millions in investors' losses and a lawsuit against Kinross-Kennedy for Professional Negligence. That lawsuit was settled quickly settled in Kinross-Kennedy's attempt to keep his license.
The current crop of pumping emails also coincides with SENY's notification to the SEC that it intends to be late with its filing of year end statements. This usually indicates that bad news is a-coming and in this case, we're guessing that massive dilution will be that news. This one could break threw that "support level" at any time.
Following First Liberty Power Corporation's (FLPC) refreshing of their PnD campaign, it's New America Energy's (NECA) turn again. The two partners in purported lithium exploration in Nevada, take turns having the touts pimp their stock by hyping up expectations on what is, in reality, worthless ground. It shows up that way in their financials. As of November 30, NECA reports having $549 in the bank and lists no property or mineral rights assets. And yet somehow, it is worthy of a $20 million market cap.
Where NECA excels over FLPC and as we've said in a previous alert, is in it's handling of the PnD campaign. NECA insiders allow the promotion to move sideways, by sitting on the offer in order to encourage past buyers to hold onto their stock, while giving new investors the impression that they haven't missed the boat. It's a smart PnD strategy that we talk about in our article It's A Pump & Dump. In contrast, each refreshing of the FLPC PnD, has created more losers of significant value. Those who participated in last week's pimping are already down as much as 40%.
Nonetheless, sideways PnD or not, as soon as the street gets tired of the sideways movement and buying dries up, NECA bids will be whacked and as with all PnDs, the bag holders will lose the majority of their investment. Just ask the Lone Star Gold (LSTG) investors about that. We gave them the same warning about sideways PnDs (which you can read by clicking here and here) and now they are realizing that we know what we were talking about.
Be very wary of the new Pump & Dump campaign on Taxmasters, Inc (TAXS), a small time competitor to H & R Block, who has been around for a while and yet whose stock was recently relegated to the pink sheets, due to the fact that the company has missed the extended filing deadlines of its last two quarterly financials. What's worse is that TAXS has not addressed this issue to the public, so nobody knows what's going on.
Things must be very ugly at TAXS and we believe that it starts with the $21 million in debt last reported by the company. That number has surely grown, as recent 8-K filings indicate more borrowing and rampant stock dilution. Last May, the last time the number of shares issued and outstanding was reported, there were 140 million shares, but we think that number might have doubled. Since late 2009, the share price has descended in a straight line from $2.80 to its current 16 cents. Whenever the next financials are released, they are bound to be atrocious. Hence the PnD, concocted by the insiders who are looking for one last gasp to cash out before the inevitable restructuring and/or convertible debt holders who just got a whack of stock that they need to whack out to the public.
We cannot say this emphatically enough, TAXS is not to be considered an investment. It is likely to be a short term gap followed by massive amounts of dumping.
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