Eco Building Products, Inc. (OTCMKTS:ECOB) Loses Investor’s Trust
Rough times are in store for Eco Building Products, Inc. (OTCMKTS:ECOB). Yesterday they dropped by another 26% to close at $0.022 following the 14% decrease from the previous session. The stock was making a strong positive movement during the past two weeks jumping rapidly from $0.0064 to $0.035 or in other words a 500% gain. All that changed two days ago.
First a news was released that Alpha Capital Anstalt has filed a complaint against ECOB accusing them in breach of contract and injunctive relief regarding a default under a secured debenture in the amount of $1,080,000. Not a good sign for the image of any company and until this case has been resolved investors will be hesitant to keep their holdings.
On the same day the company also filed its 10-Q report for the period ending March 31 so lets see what their financial situation is:
- no cash
- $1.9 million total current assets
- $11.8 million total current liabilities
- $1.7 million revenue
- $1.1 million net loss
The debt in the balance of the company takes up a significant portion. It gets even worse when you add that for the last nine months the net lost is nine million and the accumulated deficit amount to $30 million.
ECOB are still dependent on the issuance of shares in order to finance their activities. Currently they have 350 million shares issued of the maximum authorized amount of 500 million. The company was even forced to cancel the stock options provided to its employees.
If they want to regain the confidence they lost, the company must take measures towards a positive bottom line.
They are able to generate revenues and their treated wood products show promise. But for now they are a risky venture for investment without doing your own due diligence.
