Eventure Interactive Inc (OTCBB:EVTI) Bounces At Long Last
Earlier today, a website called Daily Stock Reporter came up with an article which suggests that Eventure Interactive Inc (OTCBB:EVTI), as well as a few other OTC stocks, somehow led the reversal that Wall Street experienced after the massive sell-off from a few days ago. That’s not strictly true. In fact, people on Wall Street have never heard about EVTI, and if they do by chance get familiar with the company, they probably wouldn’t touch it with a ten-foot pole.
You’ll see why in a few seconds, but we should first point out that unlike their colleagues on Wall Street, penny stock investors are quite eager to jump in. Yesterday, they traded nearly $180 thousand worth of shares and they pushed the ticker on a bounce which saw it gain as much as 69%. About fifteen minutes into today’s session, it’s another 9% up and if it continues surging, it might soon be knocking on the door of $0.003 per share. The question is: Does it really deserve it?
The latest 10-Q is not particularly encouraging. Here’s what the Q2 results look like:
cash: $13,663
current assets: $28,859
current liabilities: $3,089,622
quarterly revenues: $348
quarterly net loss: $2,653,711
But if it isn’t the 10-Q, then why did people suddenly started buying? It’s all because of a press release from yesterday which says that EVTI have ditched their previously announced plans of raising the number of authorized shares from 1 billion to 2 billion. They have also terminated an equity purchase agreement.
On its own, the PR doesn’t sound too nice. In light of the appalling financials, the cancellation of the equity line actually raises some questions around the company’s future stability. Once you take a closer look, however, you’ll see that the shareholders do have one or two things to be excited about.
The equity line agreement allowed an entity called Aladdin Trading to buy shares of common stock at a whopping 50% discount to the market price. The fact that it’s now terminated and the fact that the A/S count remains the same means that dilution should be limited, at least to some extent.
But is this really enough to turn EVTI into a solid performer?
Unfortunately, that’s questionable. The number of issued and outstanding shares grew from just over 61 million on May 14 to 304 million on August 19. That’s a pretty severe dilution, but even at 1 billion, the authorized share count still provides plenty of room for stock printing.
And although Aladdin Trading will no longer have the right to receive shares at a discount, other entities will still be able to do that. On June 30, there were convertible notes with an aggregate principal amount of more than $1.1 million and discounts on the conversion rates that ranged from 40% to 50%. In July and August, EVTI converted about $523 thousand of that debt into more than 237 million shares (an average rate of $0.0022 per share), and it issued $307 thousand worth of new notes which are convertible at discounts that range from 40% to 45%.
The last paragraph alone could be enough to scare away most of the people who are looking for a real investment.
