Clean Coal Technologies Inc (OTCMKTS:CCTC) Wipes More Of Its Gains
Starting from November 19 the stock of Clean Coal Technologies Inc (OTCMKTS:CCTC) registered seven consecutive sessions of gains. In just two sessions, however, all of that was erased – on Tuesday the ticker crashed by 13.5% while yesterday it slid by another 11.7% closing at $0.68 per share. It should be noted that yesterday’s correction took place on close to 500 thousand traded shares, the biggest volume registered by CCTC since mid-October. But why is the stock falling? On Tuesday CCTC did host a webcast that according to investors who participated in it was rather positive, didn’t they? Well, actually there is no shortage of reasons that could explain the current drop.
If you take a look at the SEC filings of the company you will see that CCTC have not filed a single quarterly for 2015. In fact, the annual report for the fiscal year ended December 31, 2014, was finally completed just a little over a month ago and to say that the information inside it is nothing short of depressing would be an understatement. CCTC finished 2014 with:
• $1130 cash and total current assets!!!
• $7.1 million total current liabilities
• ZERO revenue
• $7.57 million annual net loss
The subsequent events section of the report revealed that since the start of the year and through to October 15 close to 20 million shares were issued and as a result CCTC‘s outstanding shares had surpassed 60 million as of October 21.
And if you are starting to wonder how exactly has the company been funding its operations you are in luck – just open the 8-K filing from November 27. There you will learn that CCTC has received $1.5 million under three senior secured notes that were issued on May 12, 2015, May 22, 2015 and June 5, 2015. Now, however, the company has entered into a new subscription agreement with its lender for up to $7.6 million. The difference is that this time CCTC will be issuing convertible notes that can be turned into shares at prices ranging from $0.15 to as low as $0.08. You might want to scroll back to the start of this article where we mention that currently CCTC trades at $0.68 per share.
If the company announces some positive results from its demonstration plant at the AES Coal fired utility in Oklahoma it might be able to at least sustain its current prices. The potential dilution and the possibility of millions of severely underpriced shares finding their way to the open market should not be underestimated though. Do your own due diligence and adjust your trades accordingly.