WORLD ASSURANCE GROU (PINK:WDAS) Popped up in The Stock Braniac’s Email

Shortly after the closing bell rang yesterday, we received a couple of emails from The Stock Braniac as well as a few other newsletters telling us how great an investment WORLD ASSURANCE GROU (PINK:WDAS) would be. We couldn’t remember writing about them, so we were quite eager to check how they are getting on and if there is anything behind the optimistic emails. Here’s what we managed to find.

It’s not easy doing a research on a company that with no clearly defined operations but, from the rather confusing descriptions available on the Internet, we understand that WDAS have been in the real estate business for some time now and, according to their latest filings, they have some land in a community somewhere in Colorado where they would like to build houses which they would later sell or lease. We’re going to go out on a limb here and say that they won’t be doing that any time soon. Instead of writing long sentences explaining why, we’ll just list the reasons below:

• current assets: $0
• total assets: $87 thousand
• current liabilities: $161 thousand
• no revenue since inception
• net loss (2012): $127 thousand

Having in mind that, according to their financial statement, they have been in the real estate business since 2006 and that they acquired the land in 2010, it’s fair to say that it’s not really working out for them.

That’s probably why, a couple of months ago, they decided to buy themselves a new subsidiary that operates in a completely different business sector. It’s called Cellad, Inc, it’s an Irish company and it makes ads, that appear on your smartphone when you don’t want them to (that’s what we could understand after reading the description a number of times). WDAS are very happy with their new daughter company and it seems that the pumpers share their enthusiasm.

We’re not sure if the stockholders are too keen, though. WDAS have disclosed all the details of the deal and it’s quite clear that it’s not all good news. The shareholders of Cellad received 80 series B preferred shares that give them 80% of the voting rights. If they wish to convert them, they can get 80% of all the issued and outstanding common shares. At the same time, the series A preferred shares (all 3.5 million of them) will be converted automatically into common stock over the course of the next couple of months. All in all, WDAS‘s stockholders will have to get through a lot of dilution in the coming months.

We were reading quite closely to the terms of the contract and we couldn’t help noticing that it all sounds extremely familiar – a promoted penny stock company has recently acquired an Irish business that operates in the telecommunications sector. Sure enough, it’s not a coincidence.

A couple of weeks ago we wrote about another pump – the one for AXIOLOGIX INC (PINK:AXLX). Just like WDAS, AXLX recently acquired an Irish company that deals with VoIP services and the similarities don’t end there. The newly appointed CFO of WDAS is a certain Mr. Vincent Browne – the CEO of AXLX. He’s at the helm of another penny stock company – Flint Telecom Group, Inc. (PINK:FLTT), and as we wrote in the AXLX articles, there are quite a lot of complaints filed against him, including one for securities fraud.

AXLX‘s pump is now at a standstill and they have already started their descend. As for FLTT, they are all but anchored to the bottom of the chart. Will WDAS follow in their footsteps? Only time will tell, but it’s essential to think twice about the risks involved when you are considering your investment options.