Formcap Corp (OTCMKTS:FRMC) Shuffles as Pumpers Go Quiet
Formcap Corp (OTCMKTS:FRMC) got pumped last month, but the campaign yielded little results. More than thirty email alerts were sent between October 15 and October 23, the total compensation according to our database amounted to $67,500 and it featured some quite influential promotional outfits like OtcBB Journal, Penny St0ck Spy and 007 Stock Chat.
The campaign was garnished with a couple of press releases from the company that, we must say, were surprisingly well-timed with the emails, but despite all the enthusiasm, the ticker failed to impress. There were both ups and downs but the movements were nothing to shout about and the small trading volumes suggest that, on the whole, the pump was a failure.
The latest email arrived more than two weeks ago and the behavior from the last couple of days suggest that FRMC is performing way better in the absence of the paid pumpers. The last red session was registered on October 28 when a correction of just 4% was displayed. On Wednesday, it jumped by about 30% and while the progress was hampered by the problems with OTC Markets’ quotation system yesterday, it still managed to add another 5%, shifting more than $123 thousand worth of shares and finishing the day at $0.41.
Quite a performance, especially considering the lack of news (the latest press release is dated October 22), but unfortunately, we’re not sure that FRMC will continue to impress in the long run.
For one, the market cap at yesterday’s close comes in at over $37 million and that is a bit of a stretch for a company that, according to its latest 10-Q, has:
- cash: $420
- total assets: $11 thousand
- total liabilities: $424 thousand
- no revenue
- quarterly net loss: $2.2 million
The management team don’t seem too bothered about the horrific fundamentals and are instead quite excited about the oil leases in Cowley County, Kansas. A definitive agreement was executed last month and a deposit in the amount of $25 thousand was made. Some more payments will need to get through before exploration begins, but apparently, the technical studies and reports sound so good, that it’s going to be worth every penny. Once again, we remain a bit reserved towards the whole thing.
The lack of financial stability that would allow FRMC to drill and pump oil out of the ground is obvious, but there’s one more thing worrying us. Throughout the years, the company has made numerous announcements about contracts, agreements and joint ventures. All of them have been either terminated or are at a standstill due to the lack of funds. Is the Kansas property any different? It might be, but there’s little to suggest that this is the case. Of course, the future press releases and financial reports should give us a better view of where the company is heading, but in the meantime, there are one or two things well worth considering while making up your mind on FRMC.
During the first half of the year, the company converted $425 thousand worth of notes into nearly 90 million common shares bringing the average conversion price to around $0.0045 per share. If the interest grows high enough, this stock could hit the open market presenting a great profit opportunity for the note holders and wreaking havoc with the price.
That’s why, being cautious and considering the risks very carefully is definitely your best bet. People that got a bit carried away from the unnecessary hype around American Community (OTCMKTS:ACYD) were presented with a tough pill to swallow when the ticker wiped out nearly a fifth of its value in no more than three sessions. We can only hope that FRMC will manage to avoid such drops.
