IFAN Financial, Inc. (OTCBB:IFAN) Slowly Pushed Up The Chart By $3.5 Million Pump
A few months ago IFAN Financial, Inc. (OTCBB:IFAN) operated under a different name and a different business – they were trying to produce a clothing line for children. At the end of May though it was apparent they had reached the end of the line with zero cash and zero revenues.
Not all was lost and in June the company decided to acquire Mobicash America, Inc. D/B/A Quidme for a total of 43 million shares and through their business to become a developer of mobile applications for the secure transfer of funds. Now with the change in operations should investors be more willing to put their trust into the company? Well, let’s not get ahead of ourselves.
First of all, Mobicash was in an almost equally as depressing financial condition. As of August 31 they reported the following numbers:
• $4,691 cash and current assets
• $3,114 current liabilities
• NO revenue since inception
• $444 thousand quarterly net loss
Not exactly what one might call a solid balance sheet. But this is only the start of the red flags that surround the company.
Just two weeks after the acquisition was completed investors began reporting that a hard mailer touting the company has been put into circulation. The pump was further expanded with a landing page. Looking at the disclaimer at the bottom of the page reveals that an entity called Mintefor Investments LTD has paid $3.5 million for the promotion. That is right, there is a $3.5 million pump for a company that has less than $5 thousand in cash.
So we wondered who might benefit the most from the increased awareness. In our previous articles we warned you that back in May, 2013, 214 000 shares were sold to a group of seed shareholders for just $0.025 each. After the 140-for-1 forward split performed this September those shares turned into nearly 30 million.
The top executives of the company own 65% of the outstanding shares and the fact that they don’t receive salaries might temp them to sell some of their holdings at the currently inflated prices.
Yesterday IFAN added another 4% to its price and closed at 59 cents per share. In turn the market cap of the company surpassed $47 million, a number that is grossly disconnected from their fundamentals. If you are determined to play the pump it is paramount to do your own due diligence and to decide on appropriate time horizons for you investment. If you miss the right timing though the losses could be devastating.
