Ocean Power Technologies (OPTT): Expanded SEC Probe, Promotions, Revenue Decline
by Sonya Colberg, Senior Editor, 7/29/2016 9:48:49 AM
Ocean Power Technologies (OPTT) is creating waves alright ... just not the right kind.
Over 32 years, the company has failed to turn electricity-generating ocean wave power into a real business.
But the company has created waves over the years by recycling old "news." All backed by a veritable brigade of promoters eager to push the old news and thus keep the company on investors' radar.
Ocean Power has turned into swamp gas, racking up over $177 million in losses but no commercial product.
Yet the stock recently lifted off and floated to price levels not seen in over a year.
TheStreetSweeper alerts investors about what's really behind this rally ... and why the stock is precariously positioned to sink into the deep blue sea.
First, the executive bullet points:
*SEC investigation expands
*No cash set aside for SEC investigation losses
*Oddly timed stock promotions
*Nearly $1 million cash burn monthly
Investors may find other viewpoints here. Meanwhile, below are TheStreetSweeper's details surrounding Ocean Power's stormy seas:
*1. Agreement: Just Rehash
On June 1, the stock shot up some 300 percent on a company press release announcing Ocean Power's lease agreement with Mitsui for a power buoy "planned to be deployed off Kozu-island..."
(Source: Yahoo Finance, TheStreetSweeper)
All well and good, right? Except that Mitsui deal is not new. The companies began working together eight years ago.
But in October 2013, Ocean Power reeled out a strikingly similar press release which said the company agreed with Mitsui "to cooperate in the development and commercialization" of the power buoy.
Ocean Power's habit of recycling old news goes back several years. In 2012, the company announced it clinched a deal with Lockheed Martin for a demonstration project in Australia. here.
*2. Amazing: Pitiful Sum, Many Years In The Making
One thing about the recent, much-trumpeted Mitsui deal is amazing. It has taken Ocean Power three years to progress from agreeing, to agreeing some more and planning to deploy a power buoy. All that time and effort for an engineering services and licensing contract expected to be worth only $975,587 over half a year or so...
Mitsui apparently considers this arrangement no more than a science experiment; the Mitsui website doesn't even mention Ocean Power and its ballyhooed agreement.
(Source: Mitsui Engineering and Shipbuilding)
Alarmingly, Mitsui's sub-million-dollar contract is Ocean Power's "one revenue producing contract."
Lately, Ocean Power has needed to lean heavily on its one viable deal...
*3. Critical Timing: July 14 Press Release
Ocean Power's July 14 press release should have been considered skeptically.
You see, the very next day, the company was scheduled to release its fiscal year financial report. And that report was filled with shockers.
Vuzix Corp. (VUZI): Dismal Business, SEC Inquiry, Habitual Stock Offerings
by Sonya Colberg, Senior Editor, 7/27/2016 11:24:00 AM
Looking through Vuzix (VUZI) eyewear, we see a future clouded by an SEC inquiry, paid promotions, more stock-diluting raises and more investor money thrown down the drain.
Executive bullet points for Vuzix include:
1. Company is a glorified stock promotion
2. Operates a minimal, declining business
3. Under SEC inquiry.
4. Has nothing to do with PokémonGo.
5. Faces stock dilution which we believe is imminent.
Here are details on the top five reasons that TheStreetSweeper wants to toss out Vuzix and its goofy, not-that-smart eyewear:
*1. May 24: SEC Launches Vuzix Inquiry
On May 24, the Securities and Exchange Commission notified Vuzix that the company is under inquiry.
"On May 24, 2016, we received a letter from the SEC, dated May 19, 2016, notifying the Company that the SEC is conducting an informal inquiry relating to the Company, and requesting that the Company produce certain documents relating to the Company’s internal control over financial reporting. If, in connection with this informal inquiry, the SEC determines to take action against the Company, the Company’s financial position could be adversely affected."
On July 6, Vuzix finally mentioned the SEC inquiry. Instead of immediately disclosing this crucial matter in an 8-K, the company waited six weeks to disclose the news near the bottom of its prospectus.
Why? First, let's look at recent events and then we'll put it all together ... Read on ....
*2. Promotion: After The SEC Notification
On June 9, professional promoters pushed a video news release promoting a so-called collaborative agreement between Vuzix and an undisclosed party.
The CEOLive host quickly mentions that no licensing agreements or technology transfers have happened; but the parties have agreed to work toward a prototype; and that this "big" announcement is really just a follow-on effort.
So this hype appears to be an oddly timed regurgitation of an old, small, tenuous deal. Regardless, this information helped fuel the stock rally.
*3. Investors Remain In The Dark
Incredibly, that June 9 promotion hit about two weeks after Vuzix got the SEC inquiry letter. At the time of the promotion, apparently only Vuzix managers knew about the SEC's inquiry.
But investors were in the dark.
Likewise, many didn't realize the company had been struggling and stumbling along since before it ever began selling smart glasses in late 2013. Losses altogether had flown to more than $61 million. Losses last quarter alone hit $3.8 million.
The company also reported dismal losses and gross margins for 2015 versus 2014:
(Source: Company SEC filing)
And Vuzix sales - which were already pathetic - have continued to deteriorate:
(Source: Company SEC filing)
JAMN Finally Spills the Beans -- And It's an Ugly Mess
by Janice Shell, 6/2/2011 10:32:51 AM
To be sure, the 10-K offered investors little reason to sing. For starters, the filing reveals, this once-hot “coffee company” sells no coffee of its own at all. JAMN relies on a supplier based in frigid Canada – far away from the tropical Jamaican home of its co-founder Rohan Marley – to provide the company with an actual product to sell to its customers instead.
Back in April of 2010, JAMN inked a “supply and toll agreement” with Canterbury Coffee of British Columbia that gave it access to some brew. According to that agreement, JAMN relies on Canterbury to fulfill every role – save a minor one – normally satisfied by a firm that classifies itself as a coffee company. Canterbury purchases the coffee beans. It roasts them. And it then packages them in bags supplied by JAMN – the company’s only real product – for sale to the public.
JAMN signed this deal more than a year ago, right before Shane Whittle – a notorious Vancouver stock promoter – officially resigned as CEO of the company. But the company never mentioned that agreement, seemingly material enough to warrant at least a quiet 8-K report, in a single regulatory filing until now.
Jammin Java (JAMN): Hot Stock ... Bitter Aftertaste?
by Janice Shell, 6/2/2011 10:30:25 AM
It’s time to wake up and smell the coffee! That’s exactly what Jammin Java (OTC: JAMN.OB), a heavily promotedcoffee company, and – for very different reasons – TheStreetSweeper would like investors to do.
Since the beginning of the year, JAMN has miraculously risen from the ashes of the “Grey Market” graveyard to become one of the liveliest – and richest – stocks in the entire microcap arena. JAMN has seen its stock shoot straight toward heaven, soaring from 55 cents to peak above $6 a share on massive daily volume, with its market value nowtopping $355 million despite the company’s limited resources and operating history. (As covered in more detail below, two of the Internet tout sheets pushing JAMN the hardest effectively vanished -- disabled by their Internet servers -- on the day the stock’s trading volume exploded past 20 million shares.)
CCME: Few Signs of Life at 'Healthy' Chinese Firm
by Roddy Boyd, 3/23/2011 9:30:34 AM
Also, and this cannot be understated, hanging out on a sidewalk in Fujian–the sidewalks double as parking spots when the streets, which appeared to have been designed in the Han Dynasty, fill up–was not a viable option. There was also the matter of the world-class headache the Financial Investigator was developing from Fuzhou’s diabolical smell, an epic conflation of poor sewage treatment, air pollution and the smell of cabbage that made getting the hell off Dongjie street a matter of vital importance.
The Financial Investigator and his traveling companion for the trip, an American investor with extensive experience in China, decided to head upstairs despite our interview with the CFO having been cancelled at the last minute (with no explanation given.) We thought a quick tour of the offices and meeting a few other executives might open our eyes to a few things.
Though the language barrier was a little steep with the young receptionist–when we asked for writing paper, she provided Kleenex–we were in short order shown to their conference room and told to wait. It did not escape notice that pride of place in the conference room belonged to a framed certificate of participation from the Fall 2010 Rodman & Renshaw conference, the World Cup for reverse merger companies and the pumpers and touts who peddle them.
Eventually chief operating officer James Yu came down and after spending 30 minutes trying to understand who we were, concluded that giving us a tour wouldn’t hurt. Soon enough, his colleague, Vinne Ye–the chairman’s assistant–came out and took us around.
It was most eye-opening.more...
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