MyECheck, Inc. (OTCMKTS:MYEC) Fails To Recover

[[tagnumber 0]][[tagnumber 1]]MyECheck, Inc. (OTCMKTS:MYEC) has had a grand start of the month in which it gathered upward momentum, but things haven’t been going so well recently, especially since they filed their Form 10 in order to become a SEC filer once again.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Unfortunately, the consequences of the filing weren’t positive. This is most likely because of the major discrepancies in the balance sheet of [[tagnumber 6]]MYEC [[tagnumber 7]]that we pointed out in our previous article and that add up to the misleading information we have been receiving from the company.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]It is really quite strange when you report $1.54 million in revenues for Q1 and Q2 of this year and suddenly it turns out that you have $752 thousand for the eight months ended August 31. It is also interesting how $1.6 million in assets recorded for the period ended June 31 can shrink to $299 thousand on August 31.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]The current liabilities have almost doubled and went from $501 thousand in the end of June to $935 on August 31, while in the same time the cash positions that surpassed $1 million as of June 30 have shrunk to $228 thousand on August 31.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Such discrepancies are quite big and, in our opinion, can’t be explained with book–keeper error. When you add to that the fact that the company announced the launch of their MJ – Pay App back on August 14 and it later turned out that due to “a service partner delay” the piece of software will be available in January 2015 the credibility of the claims and the intentions of [[tagnumber 6]]MYEC’s[[tagnumber 7]]  management is put at doubt.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]The latest press release from the company might put investors at ease, but we are not quite sure what is going to happen in the future. Earlier today [[tagnumber 6]]MYEC[[tagnumber 7]] announced that it has secured a [[tagnumber 6]]$5 million[[tagnumber 7]] line of credit from [[tagnumber 6]]TCA Fund Management Group[[tagnumber 7]]. The first cash injection will be of $550 thousand at the cost of $60 thousand in fees and the issuance of 3.8 million in shares as well as the establishment of a share reserve fund for TCA and their associates.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]A simple calculation reveals that the price per share of the 3.8 million that will be issued for the $550 thousand that the company will receive comes at $0.14, which is well above the current price and leads to the suspicion that we might see a lot more shares issued in the near future.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 38]][[tagnumber 39]][[tagnumber 2]] [[tagnumber 0]]This of course might cause further dilution to a company so overvalued like [[tagnumber 6]]MYEC[[tagnumber 7]], whose market cap is sitting at $139 million, and we might see some grim things happen to its stock. As always, you should not skip doing your due diligence and weighing out all the risks before making an investment decision.[[tagnumber 2]]