Another Round of Pumps for Hokutou Holdings International Inc (OTCMKTS:HKTU)

If you check out our previous article about Hokutou Holdings International Inc (OTCMKTS:HKTU), you’ll see that nine months ago, it was a nutraceutical sub-penny ticker which was frequently targeted by the pumpers, had a truly atrocious stock performance, and an equally dreadful financial statement. Many things have changed since then.

A 1 for 1063 reverse split was effectuated back in October which lifted the share price firmly out of sub-penny land. A period of silence followed, but last Tuesday HKTU announced that they have acquired a company called Platinum Pari-Mutuel Group. The Board of Directors went through an overhaul and so did the management team.

Apparently, HKTU has now ditched the plan of developing and marketing a line of revolutionary nutraceutical products and will instead give it a go at making an impact on the online gaming industry. According to a press release which came out yesterday, they even have an agreement in place which should guarantee revenues by the end of February.

Even HKTU‘s balance sheet looks different now. Back in September 2012, they had next to no assets, about $30 thousand in debt, and zero revenues whereas, according to the latest report, as of September 30, 2013, they had NO assets, about $30 thousand in debt, and zero revenues.

One thing that hasn’t changed though, is the pumpers’ attraction towards HKTU. The latest promotion started on Sunday and since then, the number of emails received in our inbox exceeds twenty. Leading the pack is David Cohen who received $75 thousand for his efforts, but there are also a number of smaller outfits helping spread the word around.

When HKTU got pumped last year, it showed us that it’s far from the most solid performer under the pressure. In fact, it plummeted from around $0.08 per share to less than a penny in just over a month and we’re not sure that the excitement around the new business plan alone is enough to stop it from repeating the drop. In fact, the 12% loss from yesterday might suggest that the effects of the latest promotion are kicking in.

Looking at Mr. Cohen’s track record, we can see some other recent disasters like RJD Green Inc (OTCBB:RJDG) – a ticker that has lost around 70% of its value since the pump from November.

In case you’re still contemplating an investment in HKTU, you might want to consider one additional fact.

Three new Directors were appointed a week ago – James Egide (who will also serve as the CEO), Keith Cannon, and Michael Bard. The press release informing us about the change indicates that they all have extensive history with publicly traded companies and some research reveals that this is indeed the case.

According to this legal complaint, Mr. Cannon and Mr. Egide were part of the management team of a small cap enterprise called Global Pari-Mutuel Investments, Inc. which was traded under the symbol GPRM. The document also reveals that while they were at the helm, a person called Russell Cannon (who, by the way, appears to be Keith Cannon’s son) manipulated GPRM’s stock repeatedly and engaged in a number of fraudulent practices.

Will this have an effect on HKTU‘s chart movement? We’re about to find out, but we reckon that the document, along with the ticker’s devastating performance under the promotional pressure and the poor fundamentals certainly warrant some extra caution.