Evcarco Inc (PINK:EVCA)’s Promotional Engine Roars into Life
Electric cars, mobile and desktop applications and fishing gear – if we are to believe everything they say, Evcarco Inc (PINK:EVCA) are experts in all three fields, but is it a case of Jack of all trades, master of none?
EVCA started back in 2008 and since then, they have been dealing with building and converting cars and commercial vehicles to run on electricity. They have a website in which they explain the benefits of alternative propulsion and they even have videos in which they say that they are one of the few companies in this business, focused on providing their services all over the US. When you click on the Dealers link, however, you will find no information about either the number, or the location of their showrooms, which makes us wonder if there are any at all.
Because of these doubts we weren’t expecting much from their financial statement and we weren’t pleasantly surprised when we read through it. Here are the figures for the third quarter of 2012:
- cash: $14 thousand
- current assets: $176 thousand
- current liabilities: $2.9 million
- revenue: $241 thousand
- net loss: $1 million
Apparently, at this point at least, the general public is not willing to accept EVCA as a trustworthy electric vehicle manufacturer. About five years after they started, they realized that and they began searching for additional sources of revenue. First, in July 2012, they acquired a company called Third Stone Corporation, a developer of mobile and desktop applications that will help you with anything from finding the best spots for recreational fishing to managing your personal finances. Quite a diverse range, you would agree, and it would seem that while they were checking out the fishing application, EVCA‘s bosses got inspired and started looking for yet another way to generate positive cash flow.
In January, they completed their second acquisition in less than twelve months. They took control of a company that is dealing with the production, marketing and selling of fishing rods called American Rodsmiths, Inc. The promotional campaign that is currently in full swing is aimed at convincing investors that this is the way forward for EVCA. The pumpers talk about the $65 billion recreational fishing industry, and they say that American Rodsmiths is a well-established name on the market.
We’re not big fans of sitting in the scorching sun all day, waiting for something interesting to happen, so it’s fair to say that we know nothing about fishing rods or any other type of gear necessary for this, supposedly extremely satisfying activity. Still, we did what any person would do and we opened American Rodsmiths’ website to find some more information about their products. Unfortunately, half the links don’t work. You would agree that this is not the best way to raise brand awareness, and if they want to be taken seriously, they will need to do something about it quickly.
While we’re completely ignorant when it comes to fishing, we do know a thing or two about dilution of investments. Having scrolled through EVCA‘s financial reports, we can say that there’s a lot of it. Due to the lack of positive cash flow, EVCA were forced to issue a lot of shares in order to complete the acquisitions of Third Stone Corporation and American Rodsmiths. A lot more stock saw the light of day when they needed to cover unpaid salaries to the officers as well as other services and there’s still quite a lot of debt waiting to be converted into common shares at a discount. We reckon that because of these factors, the price will continue to follow the downward trend that it took up a couple of years ago.
Pumpers have attempted to bring the stock back to life several times in recent years but it was all in vain. A series of promotional efforts took place in February 2011, March 2011, June 2011, August 2011 and November 2012 but, as evident from the chart, they didn’t really affect the performance of the shares all that much. We’re struggling to see how the one that is currently under way will be any different, especially when you consider the fact that we have yet to see some actual results from the new subsidiaries. Until we do, all the emails and PR’s sound like nothing more than optimistic projections.