Mantra Venture Group Ltd (OTCMKTS:MVTG) Gets Some Publicity
At the beginning of 2014, Mantra Venture Group Ltd (OTCMKTS:MVTG) was quietly sitting in the $0.10 to $0.15 range. Trading was not particularly exciting and it looked like the ticker would remain at these levels for quite some time. Then, in March, the company issued a series of optimistic press releases and investors started paying attention.
In no time, MVTG climbed to over $0.40 and on March 18, it hit a 52-week high of over $0.74. Some hesitation followed, but after the ticker got a mention in a Seeking Alpha article yesterday, it jumped up by as much as 26% and closed the session at $0.63 per share.
At that price, the market cap stands at around $38 million and this seems a bit too much considering the figures found in the latest 10-Q. Here’s what MVTG had at the end of February:
- no cash
- current assets: $33 thousand
- current liabilities: $1.3 million
- revenue: $16 thousand
- quarterly net loss: $215 thousand
It should be noted, however, that things are a little bit different right now. MVTG managed to raise some money in April and the press releases coming out of the company HQ inform us about numerous exciting developments.
On March 18, for example, they said that they’re starting work on a fuel cell vehicle prototype. A week later, they informed us that a project has been launched which will culminate in the construction of a plant based in Richmond, B.C.
What’s more, unlike other penny stock companies that issue a torrent of optimistic press releases, MVTG have actually signed some contracts in the past and they seem to be moving forward with commercializing their ground-breaking technology. That said, the ticker is anything but a risk-free investment.
Although they have been around for quite some time, they started generating revenues last year. There’s still plenty of work to be done and nobody can guarantee that success will ultimately be achieved. There are a couple of other things you might want to consider as well.
The company has been financing its operations mainly through private placements and the valuation of the equity sold during these transactions sometimes presents quite a discount. April 10’s session, for example, saw the ticker jump from $0.50 all the way to $0.60. On the very same day, MVTG completed a private placement during which fourteen people bought around 4 million investment units in exchange for $815 thousand ($0.20 per unit). Each unit consists of 1 common share and one warrant exercisable at $0.37.
Another thing you should definitely keep in mind is the fact that the company CEO, Larry Kristof, appears to be an extremely controversial figure. A quick search reveals that he was once at the helm of a penny stock company called Lexington Energy Services, Inc. Lexington is now known as Suburban Minerals Corp (OTCMKTS:SUBB) and it’s traded on the Grey Market due to the paid pump and the subsequent temporary suspension it received back in March.
As we wrote a couple of years ago, Mr. Kristof also seems to have a past of promoting stocks and he had some problems with the law when a couple of bags full of money were found in the back of his van in 2003.
This does not necessarily mean that MVTG is about to fail catastrophically with its business plan. It does, however, warrant a lot of extra caution.