Bioelectronics Corp (OTCMKTS:BIEL) Shoots Upwards

Last week wasn’t particularly eventful for Bioelectronics Corp (OTCMKTS:BIEL) with their stock closing at $0.0006 for three sessions in a row. On Friday, however, the ticker simply exploded. Investors shifted over 458 million shares bringing the dollar value for the day to $334 thousand. The buying pressure pushed BIEL more than 66% up the chart and they closed at exactly $0.001. Is the positive momentum going to survive the weekend though?

Well, Friday’s surge wasn’t supported by a new PR published by the company. In fact, the last press release was issued on September 21 and it wasn’t particularly exciting. The financials of the company also leave a lot to be desired. Despite generating respectably revenues for the second quarter of the year BIEL‘s balance sheet has remained quite depressing with:

• $29,203 cash
• $668 thousand total current assets
• $5.46 million total current liabilities
• $675 thousand revenues
• $732 thousand net loss

Furthermore, after issuing 1.6 billion shares just for the first half of 2015 BIEL‘s outstanding shares had reached 7.99 billion out of the 8 billion authorized. Since 2009 the company has been increasing its authorized shares once per year but this year that was not enough – despite approving the increase to the aforementioned 8 billion shares earlier in 2015 BIEL had to further increase their A/S to 9 billion shares. How long will it take the company to run out of room for the issuance of new shares this time though?

If the past history of the company is any indication it wouldn’t be that long. BIEL has been financing its activities primarily through convertible debt issued to related parties – mostly the family members of the company’s president. The latest quarterly report states that the related party loans could be turned into 7,178,011,959 shares if converted entirely.

With so many red flags around the stock what could explain Friday’s massive gains? Tomorrow the Food and Drug Administration is going to issue “a final order to reclassify shortwave diathermy (SWD)” from a class III device into class II. The hype could propel BIEL‘s further up but the volatility of the stock shouldn’t be underestimated. Do extensive due diligence before committing to any trades.

In early trading today BIEL is soaring even higher currently sitting 90% in the green at $0.00190.