BioElectronics Corp. (OTCMKTS:BIEL) Drops As Enthusiasm Cools Off

For the past five months the stock of BioElectronics Corp. (OTCMKTS:BIEL) was deeply rooted in the triple zero price ranges dropping to an all-time low of $0.0002 at the start of February. The depressing performance is certainly not a recent development as BIEL has been losing positions for years now. At first glance such a discouraging chart might be a bit puzzling when BIEL have a whole range of completed products and have been generating respectable revenues.

The recent FDA proposal for the reclassification of shortwave diathermy from a class III device into class II gave BIEL a much needed push and they surged by 460% on the day of the announcement. A couple of PRs issued in the following days kept interest in the stock high and the ticker managed to break through $0.0065 per share for the first time in close to a year.

But now the company is finding it difficult to support the inflated share price and for the past 5 sessions has slashed close to 50% of its value. Yesterday BIEL dropped by 16% and closed at $0.0035.

As we said BIEL may look like a solid company but when you dig a little bit deeper some rather worrying facts start cropping up. Despite having approved products for the whole European Union their sales have been less than lackluster. According to the latest financial report for the quarter ended September 30, BIEL had:

• $35 thousand cash
• $869 thousand total current assets
• $3.3 Million total current liabilities
• $110 thousand sales
• $5 thousand gross profit from sales
• $734 thousand net loss

While the considerable net loss, the negative working capital of $2.5 million and the accumulated deficit of $21.8 million are enough to demand caution when dealing with the company what really keeps investors away is the massive dilution of the common stock. Just for the three months covered by the report BIEL issued 400 million fresh shares bringing the outstanding shares to 3.4 billion out of the 4 billion authorized. The annual report for 2013 should be filed by the end of the month so by then we will get a bit more current information about the share structure.

Still the dilution is unlikely to stop any time soon when they have the revolving convertible promissory note coupled with various others convertible notes. Just for the nine months ending September BIEL entered into another $591 000 worth of convertible notes. The fact that most of the financing deals are done with relatives of BIEL‘s President doesn’t help boost investors’ confidence in the stock.

Another medical pennystock – OncoSec Medical, Inc. (OTCMKTS:ONCS) managed to stop its recent downwards slide after it added 8% to its value during yesterday’s trading. Sitting at $0.87 is still keeping close to its 52-week high of $0.97 posted last Wednesday.