Great Wall Builders Ltd. (OTC:GWBU) has been the most popular OTC stock for the last two months. Those who did their due diligence probably stayed away, but apparently there were many people who fell for the pump efforts and got severely burned.
In the last eight sessions GWBU has costed some traders approximately 87% of their investments. Even now, GWBU may not be done falling. At $0.209 per share the market cap would still be more than $73 million.
Why is $73 million too much? For starters, the amazing breakthrough technology the company is boasting about, isn’t much of a breakthrough.
Prior to the acquisition, the technology was the property of dPollition International, Inc. which traded, and still trades, on the OTC under the ticker symbol RMGX.
RMGX was featured in a number of promotions, just like GWBU. Again, the spotlight was on the supposedly revolutionary “Start” technology. RMGX claimed its product was approved for sale in the EU, and that they had signed sales agreements. However, they stopped reporting and went silent. Shareholders were left with shares worth next to nothing.
It looks like GWBU is nothing more than a modified version RMGX. One of the people involved in the two-man-operation that GWBU is, is Jay Almeida. His name was misspelled as Jay Ameida in a couple of places, including some official documents, but he is the same person who was a Director at RMGX. Additionally, the website provided by GWBU is an almost perfect copy of that used by RMGX.
On Monday GWBU said they would hold a shareholder webcast on Thursday. The CEO, Daniele Brazzi, was supposed to talk about the price volatility, recent developments and future plans. However, on Wednesday the company postponed the webcast for July 26. For some reason the press release says “this Thursday, July 26”.
Apparently, GWBU couldn’t be bothered to check for mistakes, but that shouldn’t come as a surprise, since they have filed actual documents with the SEC with obvious mistakes in them.
While we’re on filings, the latest available financial report shows GWBU had no assets whatsoever as of March 31, 2012.
In an 8-K from May 22 the company claimed it was completing a non-brokered private placement. Supposedly, as of May 15 GWBU had raised $700 thousand. For $50 thousand a buyer could get a Unit consisting of 500 thousand restricted shares and a warrant for the purchase of up to 250 thousand common shares at $0.20. The price for a restricted GWBU share comes to $0.10.
Assuming GWBU has completed the whole offering, it would give them $1.5 million. Is that enough to finance the distribution agreements? You be the judge. At any rate, at this point GWBU has provided nothing, but optimistic forward-looking statements, which are hardly enough to support a $74 million market cap.
