Here's the report
stocklemon.com
Note - these guys are a bit short (pun intended) on facts and specific details but they are good at spotting the obvious issues. Usually a stock does not recover as bashers use it as fodder.
The issues cited are common to many or even most birth stage microcaps. They paint with a broad brush. However, to their credit, the points they make are valid for this company and others. Managements of US companies should learn that they work for shareholders, not the other way around. Develop a business plan that works and stop trying to steal shares up front and stop dealing with scammy promoters/touts who promise quick returns.
The interlocking companies route seems to be a growing version of the dilution scam. We investors have to be very careful to be with the entity that doesn't get screwed.
I bought early yesterday at .092 and fortunately was able to get out at .0945 after I read the article. I had called the company and they didn't respond. I wanted to ask exactly how the structure provided for money flows to AMRE and how they were going to limit the future losses in the AMRE entity. So far, the filings show almost no revenue and lots of administration expenses and shares issued. Not a good sign.
Further, stocklemon doesn't even get into the nitty gritty. Take a look at the terms of the Series C preferred stock which went to the CEO in exchange for debt owed to him. The filings brag about getting rid of debt, but the Series C basically would just about double the amount of shares o/s if you do the math.
There is also a 1/2 million note that will likely lead to more dilution. The net result is that before we see real results, if ever, from NUAC, the share count could very well be over 100 million shares, with a reverse split likely.
Now all that might not be a killer. But management avoids discussion of how value is to be provided to shareholders. This leaves the door open for a piece like stocklemon. As I said, I don't think the stocklemon piece is very detailed or even well done. However, as investors gradually become aware of scammy corporate structures, it gets harder to screw us over again. So, it's good that we have websites that alert us to this type of danger.
Managements must realize that it is better to put the effort into a real business plan that points to ultimate rewards for the shareholders, than to pump, tout, dilute and screw the boss.
All my opinion only. Hopefully those here who are long can do well despite this report. |
