Valmie Resources (VMRI), a U.S. company actively pursuing opportunities for the commercialization of cutting edge products, such as drones, in the rapidly expanding technology industry, has all the makings of a pump and dump. We received our first promotional newsletter on March 13, 2015 by WFWS Consulting.
Aside from the promotion, another factor that led us to this determination is the completion of a self underwritten public offering – a similar path that many other pump and dumps we have tracked in the past have taken. It appears that the company had first intended to operate as a mineral and exploration business, but was never able to put its “mineral and exploration” business plan in full motion, nor able to raise the capital to purchase its first target mineral property.
Taking shareholder friendly actions is a common theme of pump and dumps. This is often accomplished by reducing the outstanding share count and just happened with VMRI:
“On January 16, 2015, Fen Holdings & Investments Limited (“Fen”), a company incorporated in the British Virgin Islands and the owner of an aggregate of 237,360,000 shares, or approximately 80.1% of the Company’s issued and outstanding common stock, agreed to cancel those shares in exchange for the issuance of the 2,000,000 shares of Series “A” preferred stock described above. As a result, the number of issued and outstanding shares of the Company’s common stock decreased from 296,400,000 to 59,040,000.”
On January 22, 2015 VMRI entered into a LOI to purchase Vertitek Technologies, a company that operates in the “sexy” drone market. The company has not disclosed how many shares it would use to purchase the company.
On the surface, it appears that this zero revenue raising company could be overplaying its standing in the drone market. Via its 10-K:
“We are creating a system that we anticipate will be the most powerful and feature-rich ever for connecting mobilized machines, drones and robots to enable communication, automation and visibility. We expect to be able to offer choices from dozens of industry applications that are experiencing a growing need for visibility to help maximize operational efficiencies, and have taken into consideration the need for a seamless point of integration, empowering the best-of-both-worlds — including hardware components and process information — to work better together. We developed the AIMD platform as the intersection point for real-time operational intelligence and effective work-flow that is accessible anywhere, anytime.”
From its January 28, 2015 press release:
“Valmie`s revolutionary end-to-end cloud platform, AIMD (Autonomous Intelligence for Mobile Devices), will help users manage and control independent mobilized devices with a unique set of data services. This new platform, currently in development, will give drones – and other unmanned vehicles – an improved ability to communicate. Vertitek develops components for unmanned vehicles, leveraging the business value that comes from customizing them for specific industries and analyzing the data they collect.”
VMRI Having Trouble Closing its Drones Acquisition
VMRI is having trouble closing its drones acquisition. Of particular importance is that even thought the company claims to be a revolutionary player in the drone market, a close inspection of SEC filings reveals that the two agreements integral to the business plan have not been consummated (reverse merger and transfer of patents) as of March 17th 2015. Furthermore, there appears to be issues with closing one of these letters of intent.
“After significant discussion with Vertitek and its principal shareholder, on January 20, 2015 we entered into a letter of intent with Vertitek to acquire 100% of the capital stock of that company in exchange for the issuance of shares of our common stock to the principal shareholder of Vertitek, contingent upon certain due diligence requirements. On January 27, 2015 we entered into a share exchange agreement with Vertitek and the sole shareholder of Vertitek, Masamos Services Ltd, a Cypriot corporation, on substantially the same terms as the LOI, whereby Vertitek will become our wholly owned subsidiary upon the closing of the transaction. While the closing date was anticipated to be February 15, 2015, the transaction has not yet closed due to certain unforeseen issues associated with auditing Vertitek’s financial statements. We have agreed to extend the closing date until March 31, 2015 in order to resolve these issues and have thus far advanced a total of $25,500 to Vertitek under a line of credit in the amount of $150,000 to continue the development of the V-1 DroneSM in the meantime.”
Here is a look at the company’s business strategy, which is seemingly going to rely on software that the company doesn’t own yet:
“The first major step in our shift to the technology sector was the appointment of Gerald B. Hammack as our sole officer and director on December 8, 2014. Mr. Hammack has more than 30 years of experience in a variety of technology-related fields, including programming, digital telephony and database management, as well as substantial expertise in the setup and management of complex data processing systems.
Over the past several years, Mr. Hammack has been developing a series of software platforms and technologies designed to provide the near real-time data processing required by the ever-expanding use of commercial Unmanned Aerial Vehicles or UAV’s (more commonly referred to as drones). Towards the end of 2014 we rebranded Mr. Hammack’s development efforts to date as the AIMD (Automated Intelligence for Mobile Devices) data processing platform and adopted them as our own. As of the date of this annual report we have not yet entered into a formal agreement with Mr. Hammack regarding the assignment of this property to us; however, we expect to enter into such an agreement in the near future to formalize this arrangement.”
We believe the company is going to need to raise significant capital in order to execute its plan.
“We will need to raise additional capital to fully develop our business plan. We have a 24-month plan during which we intend to implement our business development and marketing plan. We believe we must raise approximately $1,500,000 to pay for expenses associated with the continued development of our AIMD platform as well as the development and commercialization of the Vertitek V-1 DroneSM. Of this, we plan to use $500,000 to finance anticipated activities during Phase I of our development plan as described below, and $1,000,000 to finance anticipated activities during Phase II.”
Overall, we believe the stock will go down, but there is risk involved with shorting as shares are highly illiquid and a closing announcement of the LOI or intellectual property transfer could lift shares. As with many potential pump and dump stocks, one can never predict what effect company press releases, regardless of solid content, will have on share prices.
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