4Cable TV International Inc (OTCMKTS:CATV) Increases its A/S Count
4Cable TV International Inc (OTCMKTS:CATV) started the year with a price of over $0.10 per share, but unfortunately, nobody was really that interested in the stock. The volumes were practically non existent and the ticker was slowly but surely sinking towards the bottom. In June, it finally dropped in the sub-penny levels and it looked like that would be the end of that. Some people, however, had other ideas.
A few weeks after slipping under the $0.01 mark, there was an outburst of activity around CATV and after just two wild and exciting sessions, the ticker peaked at over $0.02 per share. There was no clearly visible reason for the massive buying, but despite this, a lot of investors were putting their hard-earned cash on the line. They claimed that they had spoken to the CEO on the phone and they were explaining in detail how great the business plan is. Right now, they’re pretty angry. They’re angry because the stock that they were buying for more than $0.02 per share is now worth $0.0008.
Seeing your investment shrink by 96% in a matter of a month and a half could indeed ruin the day for most people, but it must be said that there were one or two things to suggest that the surge from the beginning of July wasn’t really sustainable. The lack of news was one of them. The company hasn’t issued any press releases since February and when you add this to a sudden and inexplicable increase in the price and volume, you end up with a volatile mix.
Unfortunately, there’s nothing in the latest 10-Q to save the day, either. The figures for Q1 look like this:
- cash: $42,490
- current assets: $339,092
- current liabilities: $894,728
- quarterly revenues: $112,290
- quarterly net loss: $178,527
CATV has never really been renowned for its solid balance sheet, and as if that wasn’t enough, there is also a drop in revenues to worry about in the latest 10-Q. On a year-over-year basis, the decrease is 53% while the Q1 of 2015 sales are 45% down from the ones for Q4 of 2014.
Even that, however, isn’t the biggest problem. Between October 2014 and February 2015, the company issued more than a few convertible notes with an aggregate principal amount of around $430 thousand. All of those notes are convertible into stock at discounts ranging from 30% to 45% which has, in turn, led to some dilution.
Quite how much is anyone’s guess, but we can say for sure that the number of issued and outstanding shares grew from 50 million in May to around 61 million in July. We can also be fairly certain that it’s much higher right now because in a matter of just six and a half hours yesterday, investors traded nearly 140 million shares.
The number of authorized shares has also seen some growth. Without announcing anything, the company filed an amendment to the articles of incorporation the other day which upped the A/S count from 300 million to 5 billion. Somewhat understandably, investors were rather upset and they pushed the ticker down to its brand new 52-week low of $0.0008. A shareholder was particularly concerned and he demanded an explanation. Apparently, he got a reply.
The email from Steve Richey, the company CEO, was posted on a message board which means that we can’t be 100% sure about its legitimacy, but since Mr. Richey decided that a sixteen-fold increase in the number of authorized shares isn’t significant enough to be covered by an official press release, we (and you) have nothing better to work with. In his email, CATV‘s CEO said that he and his colleagues are doing everything they can to get rid of all the convertible notes. He announced that the consultant that dragged the company into the toxic debt deals has been sacked and he promised that from now on, CATV‘s financing contracts will be more favorable for the shareholders.
It’s up to you to decide whether you want to trust him.
