Borislav Tonev

Liberty Coal Energy Corp. (OTCMKTS:LBTG) Soars for No Particular Reason

by Borislav Tonev March 12, 2014
95LBTG.pngLiberty Coal Energy Corp. (OTCMKTS:LBTG, LBTG message board) entered the mineral exploration industry in March 2010 and it's safe to say that things haven't been going quite according to plan. As you can see from our articles, about three years ago, the share price was hovering around $1. Right now, the ticker is struggling to stay above the $0.001 mark. What's the reason for this?

The promotions over the years have certainly played their part. As you can see from our database, we have received around 80 alerts over the email from various newsletters and back in the spring of 2013, LBTG received a skulls and crossbones badge due to a suspected spam campaign. They issued a few press releases denying any involvement in the illegal pump and the caveat emptor sign was eventually removed. Despite this, the ticker continued to slide towards the bottom and in September, it slipped into the land of the triple zeros.

With this in mind, entrusting your money with this particular stock is not easy, but unfortunately, there are some other problems as well. LBTG issued the 10-Q covering the fourth calendar quarter of 2013 a month ago and we should say that the balance sheet paints a rather grim picture. Here's a summary of the most important figures:

  • current assets: $3,293 in cash
  • current liabilities: $457 thousand
  • no revenue since inception
  • quarterly net loss: $150 thousands
  • accumulated deficit: $2.7 million

Read on through the rest of the statement and you'll spot a few other issues. In February 2012 they signed a letter of intent for the acquisition of mineral leasehold rights to a mining property in Kentucky. It apparently contains around 3.6 million tons of coal and it could bring in a lot of much-needed revenues to LBTG's balance sheet. Unfortunately, they are having some problems completing the payments related to the agreement and they wrote in the latest 10-Q that there are some uncertainties around the company's ability to put the project into production.

Then there's the question of convertible debt. There have been quite a lot of financing agreements with a familiar entity of ours called Asher Enterprises. If you are a regular reader of our articles, you'll know that they have something of a reputation for providing toxic debt to penny stocks. Looking at LBTG's report, we can see that some of the features of the notes currently held by Asher and not exactly favorable to the company and its shareholders. During the period ended December 2013, for example, Asher converted $40 thousand worth of debt into 239 million common shares. The subsequent events section tells us that a further 118 million shares saw the light of day as a conversion of just $13,600 worth of notes.

At the moment, Asher Enterprises and the rest of the people who received the massively discounted stock could be in for quite a profit. LGTB has been on the run over the last couple of days and it has managed to increase its market cap by a whopping 400% in a matter of just two sessions. All this while registering some extreme volumes.

Curiously, there doesn't seem to be an immediately obvious reason for the jump. There are no new press releases, the latest SEC filings are now a month old, and there isn't a paid promotion running right now. This, in turn, makes the threat of a sudden and violent drop even more real.

LBTG_logo.jpgSpeaking of which, the slide seems to have started. An hour and a half after today's opening bell, LBTG is hovering around $0.0015 per share which is 25% below yesterday's close. Make sure you consider the risks carefully before making any investment decisions.

LBTG wasn't the only OTC stock to register some increased volumes yesterday. Hydrogen Future Corp. (OTCMKTS:HFCO) reappeared on investors' radars as a fuel cell company and the increased buying pressure helped it double its value. Easton Pharmaceuticals, Inc. (OTCMKTS:EAPH) too had an interesting day. Some exciting updates resulted in a lot of interest and 69% in gains after just six and a half hours of trading.

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