California Gold Corp (OTCMKTS:CLGL) With an Unprecedented Surge
After sitting virtually idle for quite some time, California Gold Corp (OTCMKTS:CLGL) woke up during the second week of December and started registering some pretty active trading sessions. The performance isn’t all that consistent, but interest is high. A point that was proven quite well on Friday when a total of 12 million shares changed hands bringing the dollar volume up to around $378 thousand. As a result, CLGL jumped up the charts and registered an impressive 81% in daily gains. Not bad for a ticker that was dormant until a couple of weeks ago, but we can’t help but think that the surge is somewhat bizarre considering the recent developments around the mineral exploration penny stock.
Indeed, the company came up with an exciting press release on December 9 when they announced that they are about to start the next phase of exploration at their flagship Fremont Project, but since then, the news hasn’t been quite so positive. On December 23, CLGL‘s former CEO, Martin Shefsky, filed a complaint against the company and some of the Directors alleging them of various misconducts.
On the very same day, CLGL published their latest 10-Q and just a quick look at it reveals that the company is in a deep financial mess. According to the report, as of October 31, they had:
- $67 in cash
- $437 in current assets
- $378 thousand in current liabilities
- no revenue since inception
- an accumulated deficit of around $3 million
They did issue $325 thousand worth of convertible notes last month but even with those proceeds, consistent growth remains uncertain. The notes will soon be turned into preferred shares which will later be convertible into common stock – another thing worth bearing in mind.
Speaking of which, CLGL recently announced that they are about to effectuate a reverse split. The number of authorized preferred shares will be increased and the company name is expected to be changed upon approval from the shareholders. All things that make the future even more uncertain.
We will be sure to keep an eye on CLGL‘s behavior over the first months of 2014, but in the meantime, we might as well give you some additional details that you probably need to consider while making your decision.
We’re speaking about the management team which consist of some interesting individuals. The current CEO is called James Dale Davidson and if you do a bit of digging around, you’ll see that he is an extremely controversial figure. There are quite a few entries on RipOffReport.com, a special blog containing some quite serious allegations as well as articles written by people who are not particularly fond of him.
We can’t be sure if the information contained in the links above is 100% accurate but we do know that he is listed as the CEO of Sanborn Resources Ltd (OTCMKTS:SANB). As you might know, SANB became the target of a multi-million dollar promotion back in July and, as you can see from the chart on the right, the results of the campaign have been absolutely devastating.
Mr. Davidson isn’t the only person steering CLGL at the moment. Michael Baybak was appointed as the interim Treasurer and Secretary a month ago and a bit of research on him results in some raised eyebrows as well. His name was featured in a 1991 Time Magazine article (a copy of which you can find here) called “Mining Money in Vancouver”.
Reading through it and doing a lot of due diligence is, we reckon, absolutely crucial before making any decisions.
