In a confusing press release that described a letter-of-intent, a penny stock called Nilam Resources announced that, along with Mauritius-based company Xyberdata, it would be acquiring a yet-to-be-established special purpose entity called MindWave so it can get its hands on 24,800 bitcoins.
However, the letter doesn’t detail how it will obtain the billions of dollars worth of the cryptocurrency.
The confusion around the acquisition is compounded by the current financial status of each firm, with Nilam Resource’s corporate snapshot projecting it will have only $2 million in earnings before interest, taxes, depreciation, and amortization (EBITDA).
Xyberdata’s unaudited financial statements reveal it had approximately $70 million in ‘shareholder funds’ with only $1.5 million cash in hand. This is significantly less than the approximately $1.2 billion price of the bitcoin these firms are supposedly acquiring, and it’s not clear how either firm would raise that much. However, the press release did note that Nilam will be issuing new Class C stock as part of this transaction.
Unfortunately, despite seeing a more-than-1,000% increase in the stock price, it seems as though it’s not all good news for Nilam Resources.
Read more: Struggling bitcoin miner Hut 8 links to penny stock ring
CEO cries foul
Protos called Nilam Resources CEO Ron McIntyre to ask about the bitcoin acquisition and was told in no uncertain terms that “as of today [he has] resigned as CEO and had his name removed from all corporate documents.”
When asked why Mr. McIntyre resigned from his position, he told our reporter to “just look at the chart — it’s a classic pump and dump.”
“There will be a FINRA investigation into Nilam Resources,” he added.
McIntyre stated that while his coworkers had “indicated there was a transaction forthcoming,” they never gave him the details of the deal and issued the press release without letting him review it or even telling him about the announcement. “I will be going to the appropriate state bar,” he said.
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