- WPWR is a $65 million shell company with assets consisting of one licensing agreement acquired for $400,000.
- There is an ongoing multi-million dollar stock-promotion campaign for WPWR in an effort to convince naive investors to buy the stock.
- WPWR does not own the technology that is continually referenced in press releases and on their website.
Editor's Note: This article covers stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.
Well Power Inc. (OTCQB:WPWR) is a shell company, as defined by Rule 12b-2 of the Exchange Act, and it has very minimal assets. The company's website attempts to create excitement about proprietary technology and clean power, despite the fact WPWR doesn't own any technologies at all.
According to the Securities Act of 1933, a shell company:
Has no operations; and either no or nominal assets; assets consisting of solely cash and cash equivalents; or assets consisting of any amount of cash and cash equivalents and nominal other assets.
This is an empty shell company with one license agreement, yet it boasts a $65-million market cap. Because there is no operational business and the stock price is based solely on an ongoing stock-promotion campaign, WPWR represents one of the best opportunities for short sellers.
We have attempted to contact Well Power, Inc. by phone for several weeks regarding our concerns about the company and the ongoing promotion, and have never received a response. Emails were also not replied to.
Well Power Inc. is the exclusive distributor of Wellhead Micro-Refinery Units (MRUs) for the state of Texas. Additionally, the company has first right of refusal on additional territories within the U.S. The operational business is a result of a licensing agreement with ME Resource Corp. (OTCPK:MEEXF) ("MEC"), and is valid for five years. The company agreed to a consideration of $400,000 for the licensing agreement with ME Resources.
According to an 8-K dated Jan. 22, 2014, WPWR's goal is to provide an economically viable method for developing wasted-gas opportunities in the oil and gas sector into revenue streams and doing so with minimal capital expenditure.
A Micro-Refinery Unit (MRU) combines commercial technologies with a micro-synthesizing system. With the addition of catalytic reactors and power-generation components, various liquid and power outputs can be achieved. WPWR's cost is $800,000 per MRU, which includes a container-sized unit with the capacity to transform 100,000 cubic feet of natural gas per day into a variety of clean power and engineered fuels.
(Source: Company 8-K)
Well Power Inc. has obtained only the license to distribute the micro refinery units in Texas. The company didn't acquire any operations of MEC, didn't enter into any joint venture with MEC, and didn't hire any of MEC's employees.
WPWR's business plan is to provide oil and gas producers a method of transforming otherwise-wasted natural gas into valued end-products, including engineered fuel.
The Big Problem
Well Power Inc. merely owns the distribution rights for Texas and possibly other territories throughout the U.S. The company doesn't own the technology. In fact, the technology is owned by MEEXF. If the MRU technology is a viable solution for oil and gas companies, investors should begin researching MEEXF. WPWR currently trades with a $65-million market cap and owns none of the technology. Meanwhile, MEEXF trades with a $15-million market cap, so if the technology proves to be successful, the clear value will be in owning shares of MEEXF.
One of the Most Actively Traded OTC Stocks
On a daily basis, WPWR ranks among the most active OTC stocks in terms of dollar volume, and the liquidity is entirely attributable to a $4.1-million stock-promotion campaign spearheaded by StockTips.com co-editor, Mike Statler.
The combination of email rhetoric and a professionally produced and very convincing marketing video is the sole reason WPWR currently is one of the hottest stocks in the OTC market.
The Stock Promotion
The notion is completely backward that WPWR trades with a $65-million market cap while MEEXF is worth $15 million. However, it becomes clearer when you consider the recent catalyst for Well Power Inc.'s stock movement. In 2013, WPWR was worth $0.25 a share, and the market was completely inactive. Before the 50-for-1 forward split that became effective on Jan. 6, 2014, there were 2,150,000 shares outstanding. This would value Well Power Inc. at $537,500.
However, due to the 50-for-1 forward split and the stock-promotion campaign that is easily identifiable in the chart below, the company's market cap increased to $65 million, valuing the business at 120 times greater than just a few months prior.
For those unfamiliar with StockTips.com, it is one of the world's largest penny-stock promotion groups and currently is managing a $4.1-million budget to promote WPWR. Prior to this campaign (Point 'A'), the stock had not traded a single share for months. However, during the first 13 trading days of the promotion, the stock has climbed from $0.20 to $0.83, with 143,252,589 total shares traded (Point 'B'). It currently trades for around $0.60, and as we will explain in a later section, we believe WPWR is headed much lower. We can't reiterate enough that this rise in stock price is due entirely to hype and the dissemination of misleading information by unscrupulous promoters.
It isn't uncommon for StockTips.com to promote penny stocks with little to no value, but as you can see from the charts below, the gains always are short-lived:
Tiger Oil and Energy, Inc. (OTCQB:TGRO) never has generated any revenue, and has $675 total assets. However, TGRO was promoted by StockTips.com, beginning on Dec. 9, 2013 at $0.35. The peak of $1.59 occurred 13 trading days later, and a total of 81,132,321 shares traded between the beginning of the promotional campaign and the peak.
Pan Global Corp. (OTCQB:PGLO) never has generated any revenue, and has $51,567 total cash. However, PGLO was promoted by StockTips.com, beginning on Oct. 21, 2013 at $0.35. The peak of $0.96 occurred 11 trading days later, and a total of 46,794,936 shares traded between the beginning of the promotional campaign and the peak.
Amarium Technologies, Inc. (OTCPK:AMMG) has generated losses totaling $5,762,541 since inception, and its cash position and line of credit total $105,382. However, AMMG was promoted by StockTips.com, beginning on Aug. 19, 2013 at $0.25. The peak of $0.59 occurred 17 days later, and a total of 12,027,622 shares traded between the campaign's beginning and its peak.
Comparing WPWR to Past Promotions
Among the three most-recent stock promotions by StockTips.com, the average span between beginning and peak is 13 days. WPWR also peaked on the 13th day of the promotion, and has bounced several days since then.
# DAYS TILL PEAK
TOTAL SHARES TRADED
The total volume generated during the WPWR campaign until the peak pales in comparison to those of past promotions, and as we stated in a previous article, we believe there is a strong indirect correlation between the number of shares traded and the performance of a promoted stock. Therefore, WPWR should continue to fall much greater than their past promotions, AMMG, PGLO and TGRO.
To date, the MEC technology hasn't been commercialized. Unless that technology becomes a viable solution for oil and gas businesses, WPWR common stock will be completely worthless. If the technology does help oil and gas businesses save money by turning wasted natural gas into clean energy, then begin researching MEEXF instead.
The Fraud Research Institute's track record exposing overvalued and overhyped promoted penny stocks is uncanny. The first two promoted penny stocks about which we have published investigative reports in 2014 dropped 45 percent and 68 percent, respectively, within two days of publication of each of those reports. Last year, we went out on a limb and predicted that a promoted graphite stock would drop by 85 percent. It took less than one month for that to happen.
Considering Well Power Inc. doesn't own any of the technologies it continues to tout in emails and marketing videos, it is obvious that investors should stay away. This is a shell company, as defined by the SEC, and it is undergoing a $4.1-million stock-promotion campaign. We expect it to drop by a minimum of 80 percent during the next year.
Additional disclosure: The article states that we have stated that we have attempted to contact Well Power, Inc. by phone for several weeks regarding our concerns about the company and the ongoing promotion, and have never received a response. Emails were also not replied to.