Cabo Verde Capital Inc (OTCMKTS:CAPV) Stumbles
In Q1 of last year, Cabo Verde Capital Inc (OTCMKTS:CAPV) was still known as Watair Inc, and it was clear for everybody that it wasn’t doing well. In April 2014, the previous management team finally admitted that their business plan hasn’t really worked out and they handed the company over to John Duggan, Pedro Teixeira, and Mikhail Gurfinkle.
The three gentlemen changed the name and ticker symbol, they effected a 1-for-100 reverse split, and they announced that CAPV is going to develop some real estate and hospitality projects in the African country of Cape Verde. They also promised that if they fail to get the ball rolling in a timely manner, they will resign.
In April, Mr. Teixeira left CAPV and he was followed by Mr. Gurfinkle a few months later. At the moment the only person left from the management team that took over the company last year is John Duggan and the fact that he hasn’t resigned means that he believes something could come out of this. Let’s see how he’s getting on.
That’s not the easiest thing in the world. Mr. Duggan and his new colleagues failed to publish the quarterly report for the period ended September 30 on time and they haven’t even released a notification of late filing which means that the company profile is now stamped with a Limited Information sign.
This also means that the most recent set of figures are the ones recorded on June 30 and that’s a bit of a worry because they aren’t exactly solid. Here’s a summary:
- current assets: $10 in cash
- current liabilities: $4,536,568
- NO revenue
- quarterly net loss: $25,064
As you can see, as far as the latest report is concerned, Mr. Duggan and his colleagues don’t really have a very solid financial base to step on and grow the company. That doesn’t mean that they’ll give up, though.
Last month, they announced that they are in development discussions with none other than Hard Rock Hotels and Casinos. Later, they said that they have reached a new hotel management agreement for a 60,000 sq.m. site on the island of Santo Antao and promised that details of the definitive agreement will be released in “the next few days”.
On November 16, the company did file an 8-K form which is somewhat surprising considering the fact that it stopped reporting with the SEC a while ago. It didn’t talk about the Santo Antao project. It wasn’t dedicated to the discussions with Hard Rock Hotels and Casinos, either. Instead, CAPV announced with it that most of their development projects have been dropped, with only two remaining – one on the island of São Vicente, and one on the island of Sal. As a result, quite a few shares have been returned to the treasury and CAPV‘s O/S count has fallen from just under 300 million all the way to 53 million.
The market’s reaction wasn’t instantaneous, but it did eventually come. And it was positive. The climb began last week when in a matter of just two rather interesting sessions, CAPV managed to burst out of sub-penny land and close in on the $0.02 mark. On Monday, the amazing run continued. Another 176% were added and the stock reached a close of $0.052 per share. Unfortunately, things weren’t quite as optimistic yesterday. Nearly a quarter of the market cap was wiped out and CAPV stopped at exactly $0.04.
As always, some people are saying that this is nothing more than a healthy consolidation while others seem convinced that yesterday’s drop marks the beginning of a major slide. It’s up to you to decide which camp you will side with. You mustn’t forget, however, that the missing report is causing some problems. It means, for example, that you don’t know whether the $63 thousand worth of debt picked up during the second calendar quarter has been converted. Its conversion rate is set at $0.0085 per share.
