On Friday night, LMCO closed at exactly 80 cents, 2.44% lower than the day before. Trading volume of 6,743 shares was even more disappointing as it barely exceeded one quarter of the average for the usually very illiquid stock. One thing looks for sure: the promoter that got last Wednesday $15,000 for an IR contract will keep trying to pump the share price throughout the whole following month, but if traders can hope for LMCO jumps like those of last year is another story. After the previous promotions that led LMCO share price far above $1 last year, now a trading range of only below 90 cents seems confirmed.
It could hardly be that the electric power vehicles business does not sound so cool to traders anymore. Obviously, there is something wrong particularly with Li-ion Motors fundamentals. The three months ended October 2010 were not a success for LMCO sales team. No sales from electric power vehicles were reported, quite a progressive move downwards from almost $125,000 in sales reported for the same period of 2009.
Moreover, Li-ion Motors long-term debts are almost twice its total assets, thus new financing will most likely not come at the most favorable for shareholders terms. Some former lenders under a $3 million loan agreement already own a substantial part of the company, holding as collateral 9 million shares of LMCO common stock, issued at a ratio of 2.5 shares for each dollar borrowed. A new loan agreement for up to $2 million was signed in April last year, secured by 12 million shares, and giving the lenders even more favorable conditions to purchase LMCO shares.
