MyEcheck Inc (OTCMKTS:MYEC) Slips Before Q1 Results

4MYEC.pngAs the rather colorful 2013 report can tell you, last year, MyEcheck Inc (OTCMKTS:MYEC) made a few changes to their business model and set themselves the task of restarting the revenue generation process. So far, things seem to be looking good.

A new version of their electronic payment system was launched, some licensing deals were signed, and MYEC even entered the booming marijuana industry through a contract with an entity called GreenPay LLC. There’s no shortage of positive developments, but for some reason, the stock performance is not that brilliant.

The announcement about MYEC‘s cannabis adventure came through during the so-called green rush and it gave the ticker a rather big push. Shortly after, the company filed the annual report for last year and although it wasn’t perfect, it contained figures which suggested that they are moving in the right direction. The ticker, however, wasn’t.

Immediately after the publishing of the annual statement, MYEC wiped out nearly a third of its market cap in a single session. Since then, it has managed to avoid serious drops, but it also seems incapable of climbing back up. Is this about to change?

Well, after yesterday’s closing bell, the company published the financial report for the first quarter of 2014. Here’s a summary of the most important figures as of March 31:

  • cash: $19 thousand
  • current assets: $1.6 million
  • current liabilities: $499 thousand
  • quarterly revenues: $1.36 million
  • quarterly net income: $1.32 million

Some of you will probably note that the cash reserves are somewhat limited, but apparently, MYEC have addressed this issue as well. The report says that some of the receivables have been reduced and it informs us that yesterday, they had around $1.1 million in the bank.

All in all, the first quarter has been a resounding success and, with the marijuana payment application in the pipeline, the prerequisites for share price growth are in place. Bear in mind, however, that penny stocks don’t always follow the logical path. As we mentioned already, the annual report was certainly a cause for optimism for a lot of people and yet, it failed to give the stock a push. There is another thing as well.

Back in February, MYEC‘s CEO and largest shareholder, Edward Starrs, decided to retire 1 billion of his own shares in an attempt to improve the share structure a bit. As a result of this, the O/S count on March 7 stood at just over 3 billion. Yesterday’s report, however, tells us that currently there are around 4.1 billion shares issued and outstanding.

0MYEC_logo.pngPeculiarly, the document doesn’t tell us who and why got the stock and we can see that plenty of people around the message boards are confused by the newly issued shares. Speculations are plentiful, but nothing is official as of yet. The only thing that we do know for certain is the fact that some old debt is still being converted at rates of under $0.01 per share (MYEC currently stands at over $0.04).

Despite the positive results from the company’s operations, the threat of further dilution has placed fears in the hearts of a lot of investors. This means that the stock could go either way and it also means that considering the risks is an absolute must.

MYEC wasn’t the only penny stock to end yesterday’s session in the red. Vapor Group, Inc. (OTCMKTS:VPOR), for example, continued its slide and lost another 17%. It finished the day with a price of $0.09 per share and a dollar volume of around $1.1 million. Medijane Hldgs Inc (OTCMKTS:MJMD), on the other hand, logged 20% in gains and right now, it stands at $1.08 per share.

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