From Jewelry to Graphite with Next Graphite

In previous posts, we expounded upon the lack of viable opportunities for investors to gain exposure to graphene. We also discussed how mining graphite hardly constitutes a play on graphene. In the past, we have seen many over-the-counter companies jump on the bandwagon when exciting disruptive technologies gain appeal with investors. One company that provides a good example of how to create a “$50 million junior graphite mining company” out of essentially nothing is Next Graphite.

From Jewelry to Graphite

The last 10-Q filed by Next Graphite (OTCBB:GPNE) was in August 2013 at which point they were still “Zewar Jewelry”, an online imitation jewelry company with headquarters at Nizami’s Family Shoppee in Margao India. At that point in time, the Company had no revenues, $8,858 in cash, and the ambitious plan of building a website in the “next 2-3 months” which they appear to have executed upon. Zewar also stated in the 10-Q:

We have no plans to change our planned business activities or to combine with another business, and we are not aware of any events or circumstances that might cause these plans to change.

Don’t go placing those jewelry orders just yet though, because just three months later, Zewar underwent a serious of complicated transactions that resulted in the following entity being formed along with a name change to Next Graphite:

Next_Graphite_Structure

As part of this transaction, Next Graphite now holds an exclusive option to purchase 90% ownership interest of a mining license over 125,000 acres of previously producing graphite properties in Namibia. This area includes the Aukum Graphite Mine which was producing from 1940 to 1974 according to the ministry of records. In that same announcement, a private placement was made to “certain accredited investors” for 31,051 shares at $7.80 per share. Another private placement was also made this year for 271,400 shares at $1.00 per share. In a press release last week, Next Graphite stated:

In simultaneous and subsequent financings the Company sold common stock in private placements to certain investors valuing the company at $50 million.

While the company lists [email protected] as a contact email address in their press release, this domain does not yet have a website. If Next Graphite (OTCBB:GPNE) follows the path of other OTC companies, they should inevitably build a website that pontificates about the future potential of graphene/graphite,  invoke the services of an “investor relations” firm to spread the news of their ambitions, and ultimately try to survive as long as they can by diluting shareholders through secondary offerings. Investors who are soon to come across this company should be very wary of just what they are purchasing should they buy shares in Next Graphite (OTCBB:GPNE). 

Pure-play disruptive tech stocks are not only hard to find, but investing in them is risky business. That's why we created “The Nanalyze Disruptive Tech Portfolio Report,” which lists 20 disruptive tech stocks we love so much we’ve invested in them ourselves. Find out which tech stocks we love, like, and avoid in this special report, now available for all Nanalyze Premium annual subscribers.

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