Ener-Core, Inc. (OTCBB:ENCR) Rises on Record Volume

ENCRchart.pngSo far 2014 has not been kind to the stock of Ener-Core, Inc. (OTCBB:ENCR). In just four months since the start of the year the company has suffered a dramatic loss dropping from $1.5 to less than 30 cents at the end of April, a decline of over 80%. 

Still, thanks to a couple of encouraging PR articles ENCR has started to recover some of its lost positions. The company offers a rather unique product that helps decrease the emission of waste gases but more importantly it uses them to generate energy and on June 19 they announced that their first installation located in the Netherlands has been officially launched. 
On that day the stock surged up the chart by 43%. This week the positive momentum is still pushing ENCR higher and yesterday the company rose by another 10% closing the session at $0.66 per share. Even more impressive though was the record for the company number of 912 thousand traded shares. 
Although ENCR is far from the typical pennystock there are some serious warning signs that demand the use of caution. The company’s financial results for the first quarter of the year were not exactly stellar:
• cash: $192 thousand
• current assets: $1.1 million
• current liabilities: $1.6 million
• no quarterly revenue
• quarterly net loss: $1.9 million
On April 14 they boosted their financial reserves by conducting a private placement of stock for total proceeds of $4.6 million. Initially the notes that were sold had a conversion price of $0.67 which was just a little lower than the market price at the time but that is no longer the case. According to the recently filed S-1 statement the notes now have a conversion price of $0.35 which is more than 50% lower than yesterday’s closing price. In our previous article we also warned you about the 25 million shares priced at just $0.05 that were issued four years ago.
The existence of so many cheap shares usually means that sooner or later the company is going to become the target of a paid promotion and unfortunately ENCR is not an exception. Back in February the former Fox News contributor Tobin Smith launched a landing page touting ENCR. In it he put a near term price target of $3 for the stock and as you can see he couldn’t have been further from the truth. Still, the $1 million budget of the pump means that the people behind it are not going to give up easily. On June 23 the newsletter Stock Junction also joined the pump by sending an email alert featuring some rather bold, or laughable, statements. 
ENCR‘s technology certainly has potential and just two days ago they announced that a new purchase order from the Canadian oil company Cenovus Energy, Inc. Doing your due diligence is still necessary though. The millions of cheap shares that could WSTIchart5.pnghit the market and the still ongoing paid pump shouldn’t be underestimated. Plan you position carefully in order to avoid any unnecessary losses.
Yesterday the stock of Novagant Corp. (OTCMKTS:NVGT) crumbled under the promotional pressure. The latest round of pump emails resulted in a devastating drop of 32% and a close at $0.23. At the same time Windstream Technolog (OTCBB:WSTI) continued to conquer new heights after it added another 11.9% and reached $2.07 per share.

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