Avoid this stock!

Here are my notes on SCEY.OB. I wish I could short it, but retail investors like you or me cannot short OTCBB stocks [edit 8/15/07–actually, yes they can, but only through certain brokers. I will deal with that in a future post]. I bet this stock will be down 90% within a year.
$265 million market cap (78.2 million shares outstanding @ $3.39 per
share) and $1 million in assets.
see article here: http://biz.yahoo.com/seekingalpha/070713/41002_id.html?.v=1
“neutral” analyst report here: http://investrend.com/Admin/Topics/Articles/Resources/466_1182751792.pdf
(not a pump & dump, but the analyst company is paid a flat fee to
cover the company. The report is way too optimistic.)
Following are notes on their assets. Yes, the predecessor company was
capitalized with 23 million shares purchased for $0.001 per share. Not
a bad return for the current CEO/President/Director/Secretary.
from: http://www.sec.gov/Archives/edgar/data/1315373/000106299307000972/for…
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Note A .
On January 31, 2007, we entered into a Share Exchange Agreement with
the shareholders of Sun Cal Energy, Corp. (“Energy”) to acquire all of
the issued and outstanding shares of common stock of Energy. Under the
terms of the exchange agreement, we will issue one share of our common
stock for each common share of Energy we purchased. On the acquisition
date, Energy had 26,925,000 shares outstanding. After we acquire
Energy, we will have a total of 78,175,000 shares of our common stock
issued and outstanding
Of the 26,925,000 shares of Energy shares issued and outstanding, our
president, Mr. George Drazenovic, owns 23,000,000. After the
acquisition, Mr. Drazenovic will own a total of 42,800,000 shares of
the 78,175,000 shares of our common stock issued and outstanding
(54.75% of our total common shares outstanding).
Energy was formed in the State of Nevada on June 2, 2006. It was
originally capitalized by Mr. George Drazenovic with $23,000 for which
he received 23,000,000 shares of Energy’s $.001 par value common
stock. During 2006, the Company received $1,125,000 in several
installments through a private offering in exchange for issuing
1,125,000 of Energy’s common shares. As discussed further in Note B,
Energy issued 2,800,000 shares of its common stock in connection with
the purchase of its oil and gas interests.
Note B.
On October 18, 2006, Energy entered into an agreement to purchase 1.5%
of 8/8ths overriding royalty in the City of Hobart lease located in
Oklahoma for $525,000 and 1,500,000 shares of its common stock. Under
the terms of the agreement, $375,000 was paid and 1,500,000 shares of
Energy common stock were issued in October 2006. The remaining
$150,000 was paid in January 2007. Energy is required to issue an
additional 1,000,000 shares of common stock following the permitting
of a second well as stipulated in the agreement.
On October 4, 2006, Energy entered into an agreement to purchase a 45%
undivided interest in 34 separate leases known as the Lokern leases in
addition to any leases taken in the prospect area. The Lokern leases
are located in California. The Company purchased its interest for
$125,000 and 1,300,000 shares of common stock. The $125,000 was paid
and 1,300,000 shares were issued in October 2006. Under the terms of
the purchase, Energy will receive 75% of the net revenue produced by
wells located on the leased properties. In addition, Energy is
responsible for its allocated share of all costs associated with the
leased properties including, but not limited to land, title, lease
bonuses, and drilling
The properties acquired by Energy are in the exploratory stage. In
valuing the properties acquired in the merger, we assigned no value to
the shares issued due to the status of the properties acquired and the
lack of marketability of the shares issued.
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Disclosure: I currently have no interest in scey.ob, although I wish I could short it. My disclosure policy is rock solid, unlike this company’s balance sheet.

0 thoughts on “Avoid this stock!”

  1. Your comments are well reasoned. It is obvious you know what you are talking aobut. I have been looking to invest some money in some speculative buys. Can you suggest an avenue to either do research or is there an investment guro / investment letter you trust?

    Regards,

    Patrick Dulany

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