MEC Inc (OTCMKTS:MYEC) Crashes On Massive Volume

The stock of MEC Inc (OTCMKTS:MYEC) closed in the red four times out of the five trading sessions last week. The performance was rather depressing but at least the daily losses weren’t that alarming. Well, that is no longer the case – yesterday the ticker suffered a devastating crash wiping close to 30% of its value. When the closing bell put an end to the session MYEC were sitting just above $0.004 per share. The fact that the drop took place on more than 31 million traded shares, compared to the monthly average volume of 6.9 million shares, makes the picture even grimmer.

At the start of last week the company decided to change its name to MEC Inc from the previous MyEcheck, Inc. but this move failed to get investors excited. After all, the red flags that surround the company are still as serious as ever. Although MYEC have yet to submitted their quarterly report for the first three months of the year, and as a result still carry the OTC Pink Limited Information sign on their OTCMarkets profile page, at least on June 9 they filed their annual report for 2015. The numbers in the report are nothing short of abysmal – as of December 31, 2015, MYEC had:

• $5,425 cash!!!
• $58 thousand total current assets
• $3 million total current liabilities
• $731 thousand total revenues
• $5.1 million net loss

Compared to the previous year the balance sheet of the company shows signs of deterioration in almost every aspect. The generated revenues are down by more than $200 thousand while the net loss has grown from around a million at the end of 2014 to more than $5 million. Not to mention the extremely limited cash reserves and the working capital deficit of $3 million that MYEC had less than six months ago. About a third of MYEC‘s current liabilities consists of convertible notes.

Investors should also take into account the continued dilution of the common stock that has been taking place. As of October 20, 2015, MYEC had 4.1 billion outstanding shares but by the end of December that number had already surpassed 4.23 billion. As of May 25, 2016, 4.3 BILLION shares were outstanding.

In early trading today MYEC are trying to recover at least some of their losses, currently trading 2.5% in the green at $0.0041.