Well Power, Inc. (OTCBB:WPWR) Tries to Lure Investors
We have been following the stock of Well Power, Inc. (OTCBB:WPWR) ever since the $4.1 million pump touting them began a month ago. Since then the notorious newsletter StockTips has been issuing new email alerts almost daily in an attempt to create as much artificial hype around the stock as possible. As a result they managed to lift the stock from $0.2 per share to more than 80 cents at the end of February.
That high proved to be a bit too much for the company though and it closed in the red on the very next day. Last week was even worse. On Monday WPWR suffered a crash of nearly 30% dropping down to $0.58, then tried to recover for the next three session but on Friday wiped all its gains once more. The stock slashed 17% and ended the week at $0.54.
With the effect of the email touts starting to diminish WPWR decided to help and yesterday announced that they have completed the first round of equity financing that brought $250 000 in fresh funds to the company. Each unit offered was priced at $0.58, which is not that far from the recent market price of the stock, and consisted of one WPWR share and one warrant for the purchase of one share priced at $0.9. The news certainly caught the attention of investors and the stock surged by 26% closing the day at $0.69.
Still, if you have read any of our previous articles covering the company you would realize that, sadly, $250 000 are not nearly enough to cover the company’s needs.
At the end of October, 2013 WPWR was nothing but a shell with zero assets and zero revenues. They managed to enter into an exclusive licensing agreement with ME Resource Corp., which gave the pumpers something to talk about, but even that deal raises quite a few concerns. WPWR have to pay $400 000 in two installments – $100 000 within 30 days and $300 thousand within 90 days. The 30 day period should have ended at the start of March while the only new influx of finance for the company was revealed yesterday.
In order to keep the license WPWR will also have to buy at least two of the Micro-Refinery Units each at $800 000 during the first year of the deal. With no 8-K filing covering the finance deal submitted as of yet we don’t know who the entity giving the money is or how many rounds are planned.
Coupled with the millions of extremely cheap shares held by insiders thanks to the 50-for-1 forward split done at the start of the year and the risks around the stock increase exponentially. Do your own due diligence and never invest unaffordable sums.
