Ecosphere Technologies, Inc.(OTCMKTS:ESPH)’s Surge Gathers Momentum
Ecosphere Technologies, Inc.(OTCMKTS:ESPH) has been glowing bright green for a couple of sessions now, thanks to the company’s announcement that it has acquired the funding it needs to take some significant steps forward.
The news that ESPH published that time was universally taken as an excellent development – but was it, really?
Sure, ESPH may talk big, but perceptive investors would have already noticed that the company in question spent the last “two years researching and locating the property and designing its turn-key growing facilities” and is just now entering its ”first phase”. Those facts sort of make the company appear less like a promising up and comer and more like an idle underachiever.
Further examination of ESPH‘s affairs all but affirms this observation, as the company’s fianncials looked positively dreadful last time it filed a quarterly report:
- Cash – 2 thousand
- Total current assets – $943 thousand
- Total current liabilities – $11.3 thousand
- Quarterly revenues – 6.9 thousand
- Quarterly net loss – 1.9 million
Those numbers are far from encouraging, and as far as due diligence can tell, the only thing that’s changed since that time is that now ESPH has gotten its hands son some fresh cash. Then again, it had millions of dollars in cash a couple of years ago. The company doesn’t seem to have spent them making much progress with respect to becoming profitable – so what is to guarantee that this time around things will turn out differently?
Those glaring red flags are bad enough in and of themselves – but even if you completely disregard them, there’s the serious issue of ESPH‘s past stock-related shenanigans that definitely deserve some thought.
Because, as per the company’s latest 10-Q, the company currently has about $4 MILLION worth of convertible debt. This has not been a big deal until recently, because before this latest climb, most of the above mentioned notes converted at a rate much higher than the current price per share. Now that the ticker has reached the $0.12 mark, this is no longer the case.
But that is not the last of it – no, not by a long shot. Due to defaulting on $595 thousand worth of that debt a couple of days ago, ESPH was forced to reduce its conversion price to $0.045 per share.
Suffice it to say that all of these facts don’t really bode well for ESPH‘s chances of continuing its surge, or even retaining its ground.