Lions of Wall Street Roar about FIMA INC (PINK:FIMA)

Oil and gas exploration could be an extremely lucrative business but there are so many variables and risks, that any company, especially a small one, could quickly turn from hero to zero. Is the other way around possible, though? Can a small company really succeed? To find out, we checked into FIMA INC (PINK:FIMA).

They weren’t up to the best of starts considering the fact that we had to learn about them through the promotional email sent by Lions of Wall Street. Penny stocks are risky enough on their own and being targeted by paid pumpers make them even more so. But let’s keep a clear head for a moment and see exactly where FIMA are right now.

Some news came out yesterday that they have signed an agreement for the acquisition of an oil well in Texas. They say that it’s full to the brim with oil, costs $9 million and that it’s going to bring them quite a lot more in revenue. They also mention that they are going to pay for it via a combination of cash and shares. Now, that’s crucial information for both shareholders and potential investors, so we decided to open their filings available on the Internet and see what the proportion between cash and securities will be. Their latest financial statement covers the period before September 2012 and unless they have found a hidden treasure during the months that followed, they will have to issue shares by the millions in the coming months. The rest of the report is not impressive either and you can see for yourself the most important figures below:

• cash: $9,625
• current assets: $14 thousand
• current liabilities: $109 thousand
• no revenue
• net loss: $2,872

We can understand the fact that they still haven’t generated any revenue and that they are still in the development stage. What really bothers us is the fact that for a full quarter of a year, their expenses amounted less than $3 thousand, which leads us to believe that they are not exactly working their fingers to the bone.

That doesn’t seem to bother Lions of Wall Street, though. In a desperate attempt to persuade us that FIMA is a really solid investment, they tell us how the majority shareholder of FIMA, Mr. Marco Garduno-Chavez, is also a majority shareholder of Sino Cement, a company traded under the symbol OCEE that currently costs around $60 per share. Does that make any difference, though? Well, we opened OCEE’s latest financial report dated October 2012 and it turned out that there is a disturbing amount of zeros in there, including one under the “Cash” section. Still, some changes in management took place after the report was published so, in a word, it’s anyone’s guess what their situation is. Still, does the fact that their shares cost almost sixty dollars really make a difference to the management team in charge of FIMA?

If it does, we should mention that Mr. Chavez is also the majority shareholder of a company called SECURITY FIRST INTL (PINK:SCFR) and he has been such since July, 2012. SCFR is currently traded at $0.039 per share.

Some of the arguments listed in Lions of Wall Street’s email really do seem silly and, unfortunately, this is not the first time they have been so desperate. Not more than seven days ago, they presented us with some “proofs” that Kiwa Bio-Tech Products Group Corporation (PINK:KWBT) is your best investment bet. The chart shows what this has done to KWBT‘s chart.

If FIMA continue to rely on nothing more than paid promotions and comparisons with other companies, they might follow in KWBT‘s footsteps.