Formcap Corp (OTCMKTS:FRMC) Continues Its Relentless Run
We covered Formcap Corp (OTCMKTS:FRMC) a couple of weeks ago and back then we said that, because of the dismal trading volumes and the uneventful stock performance, the promotional campaign initiated for the ticker during the last week of October can be considered a failure. Clearly, The Green Baron (GB) (who received $5 thousand for their participation in the pump) tend to disagree. They sent an email about an hour before the start of yesterday’s session to tell their subscribers how proud they are of FRMC and how huge the potential profits have been.
It is true that the share price has jumped by almost 200% since GB’s first alert, but a quick look at the chart will show you that the really big run was made in the absence of the pumpers. Speaking of which, the surge was particularly intense last week and even yesterday, FRMC managed to gain another 5.77% closing the session at $0.84.
All this happened while trading volumes were quite high and there is a really simple explanation for the whole excitement – the press release from November 18. According to it, FRMC are going forward with the due diligence on the Cowley Country property in Kansas. They said that things are looking good and gave some more details, like, for example, the cost of drilling which is estimated to be around $500 thousand per well.
It’s clear that investors reacted positively to the PR, but when you check out FRMC‘s latest 10-Q which was published just three days before the announcement, you’ll see that the company simply lacks the money to perform any sort of operations. In fact, FRMC seems to be in a rather deep financial hole and getting out of it will be anything but easy. Here are the figures as of September 30:
- cash: $35
- current assets: $11 thousand
- current liabilities: $456 thousand
- no revenue
- quarterly net loss: $959
If we have to say anything positive about the report, we would probably point out that the current liabilities have been reduced by about 50% during the first six months of the year but, as we mentioned in our previous article, the debt was converted into common shares at ridiculously discounted prices.
What’s more, we read in the 10-Q that between 2009 and 2011, FRMC signed a total of three agreements to acquire oil and gas properties from different entities, but, probably because of the lack of cash, all the contracts are either terminated, or are at a standstill. Is there anything to suggest that the Cowley County project will be different?
Time will tell, but we can’t say that the company’s credibility is doing particularly well at the moment, especially considering the failed contracts from years gone by, the paid promotion from last month and the fact that quite a lot of penny stocks seem to be occupying FRMC‘s principal office at 50 West Liberty Street in Reno, Nevada. In fact, a few minutes’ worth of research reveals that the same address (down to the number of suite occupied) also serves as the headquarters of NMI Health Inc (OTCMKTS:NANM), Live Current Media Inc. (OTCMKTS:LIVC), Asiarim Corporation (OTCMKTS:ARMC), Mobilized Entmnt Inc (OTCMKTS:MENI), and VisualMED Clinical Solutions Corp. (OTCMKTS:VMCS).
While this doesn’t necessarily mean that FRMC will fail catastrophically with their business plan, it is, we reckon, something worth keeping in mind while making your investment decision.
