Is Octillion Really Worth $134 Million?

Nov.30.07 | About: Octillion Corp. (OCTL)

Seriously, I do not understand how anyone can read the following and still believe the company from which it comes should be worth $134 million:

We may compete for the time and efforts of our officers and directors.

Some of our officers and directors are also officers, directors, and employees of other companies, and we may have to compete with the other companies for their time, attention and efforts. Other than our President, Mr. Nicholas Cucinelli, none of our officers and directors anticipate devoting more than approximately five (5%) percent of their time to our matters. Other than with our President, Mr. Cucinelli, we currently have no other employment agreements with any of our officers and directors imposing any specific condition on our officers and directors regarding their continued employment by us.

Yet that is the market cap of Octillion (OTC:OCTL). How can a company where, not even the officers spend time, be a viable company? It can’t. Furthermore, the company does not even own what would be considered its sole asset:

We have yet to obtain a license and our intellectual property rights may not provide meaningful commercial protection for our interests in the UIUC Silicon Nanoparticle Energy Technology.

Our ability to compete effectively depends in part, on our ability to maintain the proprietary nature of our technologies, which includes the ability to license patented technology or obtain, protect and enforce new patents on our technology and to protect our trade secrets. Since we have not yet obtained a license to either the UIUC Silicon Nanoparticle Energy Technology, it is not clear what rights, if any, we may have under the UIUC Patents.

Not only does the company not own the technology, it doesn’t even have a license. And the company does not have enough money to pay for a license should the technology be proved viable. (I should note that the company has a subsidiary with a similar ‘asset’ that it is about to spin-off.) All of the above quotes come from the company’s recent 10K.

Anyone who invests his or her money in such companies is a fool. They would do much better to just stick their money in index funds or a target-date fund.

Disclosure: I am short OCTL. I was not short when I first wrote about this horrid little company. I have a disclosure policy.

OCTL.OB 1-yr chart: