First Liberty Power Corp (PINK:FLPC) Are Very Optimistic
Yesterday First Liberty Power Corp (PINK:FLPC)’s stock blew the roof up and jumped by as much as 134%, breaking the $0.01per share mark for the first time in almost a month. Though this is not an uncommon phenomenon in Pennyland, there is always a reason for such a jump and we decided to see what it is.
We checked our newsletter database and we were rather surprised to find out that, although they have been pumped in the past, this time the surge was not due to a paid promotion. We also checked their filing and we saw that there hasn’t been a new financial statement since December 2012. After a bit of head-scratching we concluded that there must be have been some headlines that got investors so excited.
We were right. FLPC issued a new press-release back on Tuesday where they explained how they will finally manage to start operations in their mines, supposedly full of rare earth minerals. They say that they have allocated millions of dollars for the exploration process but we are not sure where they got the millions from. They are certainly not present in their latest financial statement covering the quarter that ended on October 31, 2012. Here’s a recap of the financials:
- cash: $28 thousand
- current assets: $155 thousand
- current liabilities: $1.3 million
- no revenue since inception
- quarterly net loss: $391 thousand
The only way they could have acquired the funding is by borrowing some money, but they are not willing to disclose how much money they obtained, what the terms of the notes are and other details that, we reckon, are rather important for the shareholders.
The quarterly report is not the last filing that they have published with the SEC, however, and in the ones that followed we find some rather interesting information.
The latest documents are a couple of Form 4’s and they were published on March 13 and March 14. In them we see that FLPC‘s Vice President, Mr. Robert Reynolds Jr. and the CEO, Mr. Donald Nicholson bought more than 5 million shares of common stock on the open market at the end of February. The price back then equaled to about a third of FLPC‘s current value and we’re not sure what the officers intend to do with the shares. There is the possibility of selling them on for a profit, though.
Speaking of Mr. Nicholson, we should mention that we did a quick background check on him and we found that he was once the CEO of another mineral exploration company – Terra Nostra Resources Corp. (TNRO) Unfortunately, it would seem that they have now gone bankrupt. Which, on the one hand, is a good thing since Mr. Nicholson will be able to devote his whole attention to FLPC, but on the other, it gives an air of uncertainty about the future of his current venture, especially considering their current financial situation.
Let’s get back to FLPC‘s SEC filings. We also see a couple of other recently filed documents in which we find statements of beneficial ownership. The first one was published on February 20, the company that filed the report is Magna Group LLC and they own about 18 million shares of common stock. People on iHub don’t seem to appreciate this entity all that much and they have connected it to other companies that are not doing very well right now.
The second report comes from the business ventures of a person called John M. Fife. Through his various companies he owns around 16 million common FLPC shares that represent nearly 10% of the total stock capital. Diligent folk that we are, we did a quick research on Mr. Fife, and we found out that he was charged by the SEC in the past with defrauding some shareholders through his hedge fund. We’re not sure if FLPC‘s management were aware of Mr. Fife’s past when they were issuing millions of shares to him but we reckon that you should certainly have it in mind.
