Green Automotive Co. (OTCMKTS:GACR) On Its Way Down Again
Green Automotive Co. (OTCMKTS:GACR) started last week deep in the red, but looked like it would do well from then on. Sadly, this was not the case – the stock crashed 13.45% as soon as the market could react to the filing of the company’s latest financial report.
GACR has had a bad couple of months – a look at the charts reveals the fact that they are mostly painted red. This state of developments can largely be attributed to the combination of multiple unsuccessful paid pump campaigns that have targeted GACR over recent months and the meager results it has shown investors in its recent financial reports. Said results are unimpressive to say the least:
- cash – $224 thousand
- current assets – $1.3 million
- current liabilities – $13 million
- quarterly revenues – $1.2 million
- operating loss for the period ended March 31 – $6.1 million
One look at said report reveals a perplexing number – the $56.4 million that are listed under “net income.” To give the company some credit, the origin of the sum has been clarified in the paragraph directly under the stat block – “non-cash income due to a change in the fair value of derivative liabilities”. As the same paragraph explicitly states, this figure “is not indicative of the results of operations and should not be viewed as an indicator of future results”.
GACR goes to a great length to promote decency in this particular report, even going as far as to declare that the “operating loss of $6.1 million [for the quarter] is a more accurate indicator of current results”, which certainly is a commendably honest attitude towards investors. However, this does not change the fact that said investors may end up greatly disappinted.
Because even if the paid pump campaigns and the $6 million net loss is ignored, there are still some serious red flags around GACR. The latest financial report showed that it is literally drowning in debt, currently owing $13 MILLION – approximately 10 times more than the company’s current assets.
Another huge red flag can be found on page 24 of the aforementioned report, which contains a current list of all of GACR‘s notes payable. Again, the company’s openness and transparency is praiseworthy, but the news is all bad. Because the list contains evidence of some pretty horrible toxic funding, with conversion rate discounts varying between 35% and 50%.
With this in mind, it becomes clear why GACR is currently crashing as hard as it is, as well as why this disappointing state of developments could continue for some time.
Another company that crashed on Friday is Well Power Inc. (OTCMKTS:WPWR), who lost 17.89% of its market value in a single session.
