Event Cardio Group Inc. (OTCMKTS:ECGI) Crashes Hard
Event Cardio Group Inc. (OTCMKTS:ECGI) managed to rise on some impressive news two weeks ago, but it appears that the ticker is now once more buckling under the pressure.
The successful completion of the first audit of compliance to Canadian Medical Devices Conformity Assessment System (CMDCAS) was certainly a positive development for ECGI. The company itself described it as “a significant milestone towards both Health Canada and FDA certification” – and that it most certainly is. However, investors may have gotten a little bit ahead of themselves when they jumped onto ECGI stock back on September 1 and pushed the ticker 129.17% up the charts.
After all, step forward or no, we’re still dealing with a development stage OTC Markets company, whose financials for the quarter ended May 31, 2015 looked like this:
- Cash – $37 thousand
- Total Current Assets – $914 thousand
- Total assets – $1.6 million
- Total Current Liabilities – $865 thousand
- Total Liabilities – $1.4 million
- NO REVENUES EVER!
- Net Loss – $648 thousand
There doesn’t seem to be much going on in this report. True, the company seems to have secured some more funding – in fact, it is reported to claim that it now has enough money to fund the development of the NowCardio device. But was that enough to warrant market cap of more than $20 million?
Assuredly not. Which is why ECGI suffered a correction – or so logic dictates.
Another factor that may be driving the price down right now is conversions of debt into common stock. Investors should note well the fact that most of the company’s promissory notes convert into common stock at fixed prices of $0.15 per share.
As of May 31, 2015 ECGI had 190 million shares authorized and just 104.5 million common shares issued and outstanding – which means that if investor value hasn’t been drowned in discounted shares yet, there is plenty of opportunity for note holders to do so at their leisure.
Investors should definitely keep that in mind as they make up their mind about ECGI stock.
