With all the great news why were insiders selling all year to where the stock currently trades?
On September 3rd 2010 when the stock was trading at .20 cents on very little volume the company issued 910,000 shares to Chesapeake for investor relations services canceling out debt of 180,000 dollars and then on November 5th created 7,590,663 restricted shares of stock to eight note holders and existing shareholders canceling another $1,696,399 million of debt at prices from .15 to .23 cents per share.
With the stock trading at .20 cents on a volume of only 30,000 shares a day the company did two things; first on November 10th 2010 just five days after creating and distributing these new shares they created the “Flexpoint Updates Advances for the Automotive Industry” press release suggesting several automotive-related products and platforms suggesting that they would begin production in the near future on multiple long term contracts. Second, the company changes accounting firms which delays release of both quarterly and year end annual reports making it impossible for shareholders and new investors to know about these newly created 8.5 million shares. This caused continued buying on the good news and allowed the insiders to sell at artificially higher prices.
Here is the press release that started what most people today would call a pump and dump scheme. This press release was taken off the company website after the first of the year. Flexpoint Updates Advances for the Automotive Industry where Clark Mower says "We have recently experienced significant success in presenting our technology to automotive manufacturers and suppliers and believe that this will lead to integration of our patented Bend Sensor® technology into several automotive-related products and platforms in the near future. I feel confident that we are moving toward applications that will lead to multiple long-term production contracts.”
After insiders were intitailly able to sell millions of shares early on the company was able to condense the several automotive related products and platforms down to one major contract slated to begin in Q3 advertising this contract using press releases, the company website's power point and fact sheet.
All of this created solely to help insiders and friends of the company paid by stock to dump 8.5 million shares so they could make millions since the business of selling sensors was failing miserably.
On February 8, 2011, the Company issued 200,000 restricted shares at $.45 per share, in lieu of cash, for payment to the Chesapeake Group for investor relations services valued at $90,000. Unable to sell as the share price dropped to .23 cents on April 23rd 2011 the Substantial growth press release is created on May 10, 2011 by the company giving specific revenue guidance for years end and for the following year based on all the multimillion dollar deals they would be signing even suggesting that the numbers were conservative which then leads to another selling opportunity as the stock again shoots up to 50 cents.
The UPDATE PRESS RELEASE for Dec 14th 2011 was timed perfectly just three weeks after the last group of insider shares were dumped between November 15th and the 22nd in anticipation of the big auto announcement followed by the November 16th press release where Clark gets a bit greedy when in an attempt to move the share price higher even though they had known all year that there weren’t any actual contracts he says, "We expect to receive multiple large scale multi-million dollar purchase orders during the later part of 2011 and early 2012." The November 16th press release was not added to the website for obvious reasons.
If you have a hard time understanding why any of this makes sense then explain why insiders aren’t loading up on shares today at these prices?
The stock is selling off because bankruptcy is the next realistic step.
They've been doing this for years. First with Summit now with Chesapeake (I just realized it's same people different name). No big surprise, it's been in the 10Qs all year. Don't know if they really had any viable alternatives for financing. Did they dip a little- probably but that's par for the course in corporate America.
I don't think we're done yet- not at 11 cents a share.
So it's payday or class action lawsuit- take your pick. I'm going for payday.
The q3 report said they were down to their last 100,000 bucks at the end of September so how do they pay back the 550000 they borrowed last year and convince anyone to loan them more money since they can't give their sensors away?
Thats another 5 million shares to create and try selling them all at .11 cents on 50,000 a day volume.
Maybe they have one more pump and dump scheme up their sleeve but I doubt they will have time before the lawsuits start flying.
Add a couple shareholder lawsuits and a Fraud inquiry from the Utah division of consumer protection and I think its game over.
If the Utah attorneys office gets involved it could lead to an 8 by 10 cell for a few of these people.