Eventure Interactive Inc (OTCBB:EVTI) Announces New Financing Deal, Fails To Move Up
On Tuesday, without any official announcements to support the stock, Eventure Interactive Inc (OTCBB:EVTI) were able to surge by exactly 25% for a close at $0.004 Yesterday, however, the exact opposite happened – EVTI revealed that they have secured a $7.75 million equity financing. This is a major event for the company but it had minimal impact on the stock’s movement. In fact, EVTI closed the day completely flat at $0.004. What could explain the lack of enthusiasm show by investors?
EVTI‘s chart performance has been rather horrific for quite some time with the stock dropping lower and lower reaching a new 52-week low of $0.0011 on August 25. The devastating drop could be explained by the underwhelming financial results of the company. The report for the quarter ended June 30 contained the following numbers:
• $13,663 cash
• $28,859 current assets
• $3,089,622 current liabilities
• $348 revenues
• $2,653,711 net loss
With over $1.16 million in outstanding convertible debt as listed in the report investors should have been prepared for even more dilution of the common stock. Not to mention that EVTI were even contemplating an increase of their authorized shares from 1 billion to 2 billion. Ultimately the company decided not to go through with the increase and they even terminated an equity purchase agreement that allowed an entity called Aladdin Trading to buy shares at a 50% discount.
EVTI were definitely facing a lot of problems but yesterday’s financing deal should improve their state tremendously. Under the terms of the agreement GHS Investments, LLC. are going to provide EVTI with up to $7.75 million over 24 months. The company plans to utilize these funds to “pay down convertible and operational debt, fuel promotion of its newly designed Android, iOS and Web-based applications, expansion of the Eventure operational team and strategic acquisition opportunities”.
While it is true that some of the $1.16 million convertible debt could have been converted into common shares at a truly massive discount to the market price the new financing also features a discount. In order for EVTI to receive any money from GHS Investments they will have to sell shares priced at 80% of the lowest volume weighted price for the Ten (10) consecutive trading days preceding the date of the transaction. This means that the issuance of shares at prices below what investors are paying on the open market is going to continue for quite a while.
$7.75 million is a lot of money but that alone may not be enough to turn EVTI into an appealing choice for investment. Don’t forget that the company finished 2014 with ZERO revenues and $23.5 million operating loss. For the first half of 2015 they have generated the aforementioned $348 in revenues while incurring an operating loss of $6.2 million. Even if yesterday’s announcement manages to create some hype around the stock you should still take into account all of the various risks before putting any money on the line.
