Falconridge Oil Technologies Corp (OTCMKTS:FROT) Slowly Picking up Speed

Let’s not beat about the bush, Falconridge Oil Technologies Corp (OTCMKTS:FROT) is currently the target of a paid promotion. An entity called Eclipse Marketing has set aside a total of $150 thousand and Charles Moskowitz (one of the people touting Virtus Oil and Gas Corp. f/k/a Curry Gold Corp. (OTCBB:VOIL)) has set up a landing page.

The word is being spread around through the message boards and social media and although the pump experienced a slow start, it’s finally starting to pick up some speed. Yesterday, investors traded more than $265 thousand worth of shares and FROT gained 1.4%. It’s currently sitting at $1.07 which goes to show that more and more people are starting to trust Mr. Moskowitz and his $5 per share price target. So, can FROT reach the promoter’s projections?

We’re about to find out. One thing is for sure, though – not everything in the landing page corresponds to reality. At one point, for example, Mr. Moskowitz writes that FROT “makes money no matter what”. According to the latest 10-Q, however, that’s definitely not the case. Here’s what the company recorded on August 31:

• cash: $979
• current assets: $11,580
• current liabilities: $1.8 million
• quarterly revenues: $1,497
• quarterly net loss: $57 thousand

The figures above are not really in line with Mr. Moskowitz’s projections and they’re definitely not corresponding to the market cap which, at yesterday’s close, stands at around $52 million.

Nevertheless, the hype and excitement created by the pump has managed to push the stock this far up and we’ve yet to see if the dreadful financials, which were published after yesterday’s closing bell, are enough to scare the investors away.

A thing that we do know for sure, however, is that there is one more thing that could push the price down. Curious to find out what it is?

Take a look at FROT‘s first ever 10-Q. It covers the period ended February 29, 2008 (back then, FROT was known as Ameriwest Minerals Corp) and it shows that six years ago, the company’s financial situation was just as horrific as it is right now. That, however, is not important. What should be of interest for you is the Common Stock section which can be found on Page 8. In there, you’ll read that on February 18, 2008 the company sold a total of 3,250,000 shares of common stock at $0.02 per share. As is often the case with promoted OTC companies, there was a forward stock split (a 6 for 1 effectuated in December 2010) which means that the people who got the aforementioned 3,250,000 shares could now be holding up to 19,500,000 shares of FROT common stock.

To put things into perspective, this is around 40% of the issued and outstanding stock of a $52 million company and it was bought for just $65 thousand.

We’ll leave it up to you to decide what this means for FROT.