Liberated Energy Inc f/k/a Mega World Food Holding Co (OTCMKTS:LIBE) Remains Grounded
Brian Conway, Liberated Energy Inc f/k/a Mega World Food Holding Co (OTCMKTS:LIBE)’s current CEO, took the helm on October 1, 2014 and it’s fair to say that he has not had it easy over the last eleven months.
When he took over, LIBE‘s price was hovering around the $0.02 mark. About a month later, it hit a 52-week high of more than $0.08, but it quickly turned on its heel and it started hurtling towards the ground. In December 2014, LIBE dropped below a penny which made a lot of people pretty upset, but unfortunately for them, the fall wasn’t about to end there. In May of this year, LIBE dropped in triple-zero territory and it’s been reluctant to fly back out of it ever since.
All in all, LIBE‘s performance since Mr. Conway took the reigns has been positively atrocious. Let’s see why.
The financial statement certainly isn’t much to look at. The latest report covers the second quarter of 2015 and it contains the following figures:
- cash: $2,447
- current assets: $26,327
- current liabilities: $334,207
- revenues: $62,132
- quarterly net loss: $39,901
The 10-Q is far from perfect, but believe it or not, it is not the main reason for LIBE‘s freefall. The really big problem stems from the convertible notes that the company has issued over the years and the subsequent dilution.
During the nine months ended June 30, LIBE converted $364,275 worth of debt into 643,641,650 shares and between July 1 and August 14, it issued another 487,466,120 shares in order to satisfy $104,460 worth of notes. In other words, 1,131,107,770 shares (or about 87% of the O/S count reported on August 18) saw the light of day at an average rate of just $0.0004 per share.
Mr. Conway will tell you that he is not responsible for the horrific toxic debt. He’ll tell you that it was all done by his predecessors, but those of you who have the habit of looking closely at the financial reports will probably have a hard time believing him. The latest 10-Q will tell you that between October 2014 and April 2015 (when Mr. Conway was at the helm), LIBE issued $232,500 worth of notes convertible into stock at discounts ranging from 39% to 55%. Basically, instead of eliminating the toxic debt left by the previous management team, Mr. Conway actually accumulated some more.
He has an explanation for his actions, though. He says (he seems to be pretty active on the discussion boards) that the proceeds from the notes issued by him were used to repay some of the old convertibles and he says that the company is now working hard on reducing as much of the outstanding debt as possible. Yesterday, he announced in a press release that the notes owned by Vis Vires Group, KBM Worldwide Inc, and Eastmore Capital LLC have been retired.
Investors weren’t impressed. Instead of pushing the price up, they dragged it down to a close of $0.0004 per share. The reason for this can be found in an 8-K from Wednesday. It says that while Vis Vires’ note was indeed repaid with cash, Eastmore Capital and KBM Worldwide got an unspecified amount of shares.
This means that the company is still not done with the dilution. Worst of all, there’s no way of knowing how much more of it it’s in for.
