Scout Exploration Inc (PINK:SCXN) With a Promotional Debut
Yes, it’s the first time that we have received an email about Scout Exploration Inc (PINK:SCXN) and, considering the fact that we’re speaking about a penny stock company dealing with oil and gas, we were rather surprised by this fact. The promoter that got the honor (and $4,500 in compensation) of promoting SCXN is The Green Baron and we decided to check if they have done it right this time.
SCXN are indeed interested in oil and gas but, unlike some of their small-cap counterparts, they are not willing to drill the ground in search of the black gold. Instead, after failing to make it with the development of revolutionary educational systems and acquisitions of mining claims, they decided to help improve the way people contain oil spills. They have recently acquired rights to use a technology, that will minimize the reaction time when accidents occur on oil rig platforms. They plan to utilize the power and speed of unmanned aircraft that will arrive on the scene and start gathering the oil way faster than the conventionally used boats.
Sounds great, and unlike other agreements that they have signed in the past, SCXN say that the deal has already been closed. Still, we checked their latest financial statement, scratched our heads, checked it again and we are still not sure how they managed to acquire the license. Here’s what we mean – as of December 31, 2012 they had:
- total assets: $409 in cash
- current liabilities: $428 thousand
- no revenue since inception
- $25 thousand in net loss for Q4 of 2012
At the same time they say that a total of $4,265,000 need to be paid at various dates so that they can use the technology. The first date is June 15, 2013 and if they don’t manage to raise the funds until then, the agreement will be terminated. All in all, they need to act quickly.
In addition to this, SCXN will be required to issue a vast number of shares, which means that if they want to keep their shareholders happy, they will need to start making quite a lot of money in a very short period of time. That’s a tall order considering the fact that revenues for the last 14 years since they started the company have been nothing but a dream.
Speaking of small cap companies with no revenue, we should mention that we did a background check on the officers in the company and we found that SCXN is not the first publicly traded company for most of them. The Treasurer and Principal Accounting Officer, Jason Walsh, for example, is also a part of another company that is firmly set in Pennyland – INTL RANGER CORP (PINK:IRNG). Their offices are located in the same building as SCXN, which, we imagine, is extremely convenient for Mr. Walsh. The problem is that they have filed absolutely no public information since 2009 and they currently have the “Buyer Beware” stamp on the company profile at the OTC Markets.
Will SCXN suffer the same fate in a few years’ time, we don’t know, but we’re quite certain that being featured in a paid pump is not the best way to keep shareholders happy and raise the company credibility. PositiveID Corporation (OTC:PSID) have quite a lot of experience with these practices and one of the pumps for them was carried out by The Green Baron back in July 2012. As you can see from the chart on the right, this did little to stop their downfall, but it did still managed to leave some angry investors behind.
There are a couple of major tasks standing in front of SCXN right now. They have to raise the money to secure the license for the oil spill technology, and they also need to turn it into a profitable business. Until they succeed, the emails that promoters like The Green Baron send out sound like nothing more than wishful optimism. That’s why it’s extremely important to do your own due diligence and be careful when making your investment decision.