MyEcheck Inc (OTCMKTS:MYEC) Files Form 10 and Obliterates 20%
After two positive sessions on Thursday and Friday, which resulted in an 18% increase, yesterday MyEcheck Inc (OTCMKTS:MYEC) made a giant step backwards by wiping out 20%. The stock racked up four times its average volume – 39 million shares, with a dollar value of $1.46 million, and closed at $0.0316.
Yesterday MYEC finally filed the Form 10 required for it to become SEC reporting, which is good news since its filing was announced more than two months ago. However, instead of this resulting in a positive session, it caused quite the serious drop. MYEC announced that it has filed the long-awaited form via a press release issued after the session’s opening bell. Supposedly, MYEC “will now file regularly with the SEC”. The company is still listed as Alternative Reporting on its OTC company profile, but that will change “after a series of SEC questions and company responses”.
After looking through the Form 10, which contained information on MYEC‘s financial statements for the years 2012 and 2013, Q1, Q2 and Q3’s July and August, one would hardly be surprised by yesterday’s drop. The form showed that MYEC has made quite a lot of share issuances at some serious discounts. For example, MYEC issued 1 billion shares at $0.00001 each, 425 million at $0.000129, another 400 million at $0.00007, and 25 million at $0.000128.
The discounts are quite substantial, but an even greater issue is the fact that discrepancies pop up when you compare MYEC‘s latest quarterly to the financial information listed in the Form 10. According to MYEC‘s quarterly filed on Aug 13, the revenue amount for Q1 and Q2 amounted to a total of $1,544,063. When you look at the Form 10, it shows that as of Aug 31 the revenues amounted to $752,075. The current assets for the quarter ended June 31 surpassed $1.6 million, and the form 10 showed that as of Aug 31, they amount to nearly $299 thousand. The cash surpassed $1 million as of June 30, but as of Aug 31 it was barely $228 thousand, and the current liabilities were at $501 thousand by the end of Q2, but have grown to $935 thousand in Q3. It is no wonder the stock crashed yesterday.
Prior to the Form 10 announcement, on Oct 17 MYEC disclosed an agreement deal with a “national coffee vendor” by the name of Dad’s Roast Custom Coffee. On Oct 13, the company released more positive news. MYEC stated that it has filed a lawsuit for damages and injunctions for “Breach of Contract and Patent Infringement” against Zipmark, Inc., and Jay Bhattacharya. Both PRs pushed MYEC higher in the charts, before the hype ran out.
In August, aside from the Form 10 filing announced on Aug 13, on Aug 14, MYEC disclosed the launch of their MJ – Pay App. They stated that it launched and was available on Android Play and iTunes, when in reality it neither launched, nor was available anywhere.
It was later revealed that the hold-up was due to “a service partner delay” and now the launch is expected to happen in “January 2015”. In light of recent events (finally filing the Form 10), we are willing to give MYEC the benefit of a doubt. Maybe the company will come through with this promise and actually launch the app on schedule.
Do your own research and take into account all the risks associated with the company before putting any money on the line.