Legends Business Group Inc (OTCMKTS:LGBS) Making Big Moves

Shares of Legends Business Group Inc (OTCMKTS:LGBS) surprised market participants this month. Shareholders obtained 200% return in just a few days, as the market celebrated the announcement of a new era in the history of this business entity. In this piece, we will explain briefly what was put out to cause such a market reaction.SourceLegends Business Group, Inc.LGBS is a Nevada holding company formed in February, 1999. The business objective is said to be "acquiring and managing a diversified portfolio of profitable, growth-oriented companies". In the company documents, we found that the company specializes in the following industries:

"- The development and testing of various alternative and exotic energy products for marketing to the general public through a manufacturing partner or licensee.- Manufacturing and/or testing various battery charging products for which it has applied for patent protection. The Company focuses on manufacturing (either internally or through a partner) and marketing these battery products." Source

The alternative energy sector and the development of patents for manufacturing are exciting activities that, at this point in time, are bringing interesting returns to the market participants. We have also reviewed other companies operating the same businesses. Market participants can check, for example, Dolat Ventures Inc., which focuses on the development of batteries for “New Energy Vehicles”, or Mass Megawatts Wind Power Inc, the energy systems company developing environmentally-friendly technologies. By checking these articles, market participants will be able to understand the positive reaction in the share price that caused the new developments of companies operating in those sectors. LGBS' management has demonstrated its capabilities, being quite smart, by opting to enter into these industries.Recent news and Financial perspectiveOn June 14, 2017, the company announced that it would commence a "Brand New Era". Why? A new CEO with expertise in the oil and gas sector was about to be elected. On June 20, 2017, the new business executive was introduced to the market:

"Brian Estrada was appointed as Chief Executive Officer of the company. Estrada brings with him knowledge and background in the Oil & Gas sector for the company moving forward." Source

Let's review the financial statements. The company had not yet reported the revenues, thus we will focus on the BS. The following are the most important assets and liabilities of LGBS from the last quarterly report:

• Developments Costs: $440,000
• Intellectual Property: $85,000
• Marketable securities: $30,000
• Notes Payable: $790,000

Additionally, there is an interesting account to mark in this company. The accumulated deficit is $9,541,112. What does it mean? These are Non operating losses, which will be tax deductible for the company. Once the company acquires businesses that report revenues, the amount of taxes paid will be less because of this NOLs. The following text is from the Investopedia:

"A net operating loss (NOL) is a loss taken in a period where a company's allowable tax deductions are greater than its taxable income. When more expenses than revenues are incurred during the period, the net operating loss for the company can generally be used to recover past tax payments." Source

Is this a normal practice? Yes, holding companies usually chose business entities with large deficits. Biggest Catalyst and ConclusionUndoubtedly, the biggest catalyst is the company's entrance into the Oil and Gas sector and the election of the new CEO. These are very recent events that many not have been fully incorporated into the share price. Entering a new market means that the company will be able to compete in another domain, thus potential revenues increase. In addition, a new face in the company will probably bring about a lot of changes. The new executive may want to create new teams, increase efficiency, and the company's flexibility. This is always good for the organization. Market participants may believe that the new changes are a good reason to buy shares of the company. If enough market participants act in this way, the share price may creep up. Hence, we encourage email subscribers to be alert regarding the price action. Additionally, we expect the new CEO to release new corporate developments, thus check the company announcements as they happen.We will be updating our subscribers as soon as we know more. For the latest updates on LGBS, sign up below!Image courtesy of FlickrDisclosure: We have no position in LGBS and have not been compensated for this article.