Coates International Ltd. (OTCMKTS:COTE) Stumbles Further Down
Coates International Ltd. (OTCMKTS:COTE) lost another 20% of its market value on increased dollar volume yesterday, once more dipping just below the penny threshold.
Truth be told, this turn of events was all but inevitable, and should have not been hard to predict for investors that do serious due diligence before committing to a stock. Why?
Because even the most superficial due diligence on COTE reveals a pretty grim picture. The company’s financials for the last reported quarter are downright horrifying:
- Cash – $72 thousand
- Total Current Assets – $190 thousand
- Total Current Liabilities – $7.1 MILLION
- Total Revenues- $5 THOUSAND
- Net Loss – $2.8 million
And these numbers do more than fail to impress – they hint at appalling idleness, paired with crushing debt. Needless to say, that is neither a viable business plan, nor something that long term investors like seeing in a company.
The situation gets even more discouraging when you consider the fact that a substantial portion of the company’s current liabilities are in the form of toxic convertible notes, with horrible discount provisions. And, even worse, said notes are not a thing of the past – COTE just keeps issuing them, seemingly without regard to the damage they are doing to investor value.
For instance, the latest agreement that the company signed with Vis Vires Group, Inc. specified that COTE‘s debt to the lender converts at “61% multiplied by the average of the three lowest closing bid prices during the ten trading-day period ending one trading day prior to the date of conversion”.
Investors need to take note of this, since this seems to be the norm with COTE. Which, in turn, is why it is unsurprising that the ticker is stumbling every few days. Under the circumstances, hype can only push it so far, before it comes crashing down.
