MyEcheck Inc (OTCMKTS:MYEC) Moves To The OTCQB Market, Crashes
In early October MyEcheck Inc (OTCMKTS:MYEC) became a fully SEC reporting company. Yesterday, close to a month later, they managed to uplist to the OTCQB Venture Market improving their credibility even further. If you take a look at the recent chart performance however you might be left a bit puzzled – for the past three sessions MYEC has been hurtling down the chart.
Yesterday the stock crashed by over 14% and closed at $0.0145. The traded volume of more than 10 million shares was the biggest seen by the company for the past two months. Investors should keep in mind that MYEC is sitting precariously close to its current 52-weeks low of $0.01, which is also the minimum bid price for the OTCQB market.
MYEC may have taken some steps in the right direction but becoming more transparent with their filings doesn’t make the red flags around them any less dangerous. The financial state of the company is dire – at the end of June MYEC had:
• $22,850 cash
• $154 thousand total current assets
• $2.1 million total current liabilities
• $181 thousand revenues
• $1.6 million net loss
The main source of funds for the company has been the issuance of convertible debt and at the end of the second quarter MYEC had over $800 thousand in outstanding convertible notes. They tried to restructure some of the debt and as part of the new agreement MYEC had to make three $30 thousand payments. Well, they failed to meet their obligations and defaulted on the payments.
Investors have a lot more to more to worry about though. In an 8-K filed this Monday MYEC announced a $1 million financing deal with the company already receiving a quarter of the sum. MYEC definitely needed fresh capital but they got the money from Typenex Co-Investments, LLC. If you are not that familiar with the world of pennystocks Typenex is among the most infamous toxic funders. Not only that but the person controlling Typenex is Mr. John M. Fife who a few years back was charged by the SEC.
As of October 15 MYEC had more than 4.1 BILLION outstanding shares. The O/S of the company is getting closer and closer to the authorized amount of 4.9 BILLION common shares. MyEcheck tried to recover a significant portion of its outstanding shares through a lawsuit and back in April they did receive 275 million shares that were subsequently canceled by one of the defendants. Unfortunately it seems that this is as far as MYEC could go according to this court ruling.
Despite its positive PRs MYEC is an extremely dangerous choice. Investors have been waiting for the identity of the company’s bank partner in Africa to be revealed for months now, it was supposed to be PRed back in August but even now it still hasn’t been. And yesterday yet another delay was announced on MYEC‘s Facebook profile – apparently the bank is having a “security token issue” that will take several days to be resolved. Even if you believe in the potential of MYEC‘s technology you should approach the stock with caution and only after doing extensive due diligence.
