Promoter The Bedfort Report Picks Up Echo Automotive, Inc. (OTC:ECAU)
Ever since fuel costs began rising long time ago, developing energy-efficient technologies has not only become top priority for a great many companies worldwide, but also a longed for manna from heaven for pretty much every driver out there. Now, there is one particular company whose managers are claiming full responsibility for having developed a novel technology capable of converting any conventional vehicle into a “highly fuel-efficient plug-in hybrid”.
The company in question is Echo Automotive, Inc. (OTC:ECAU) and its claims could have sounded much more credible had it not been for the mere fact that that same company has just fallen victim to a full-on paid promotion. According to our database, a third party known by the name of DH Media LLC has paid The Bedford Team a total of $75 thousand to spread the word on ECAU for the next 30 days. If this were not enough, the advertising could also be extended for two more months for an additional $150 thousand.
The information mentioned above is more than enough to raise a huge red flag to warn investors to avoid dealing with promoted stocks such as ECAU. If, for the sake of argument, we have to summarize the main reasons why we would stay away from this stock we would lay emphasis on:
- the company’s compromised past
- the overnight change of business
- ECAU‘s terrible financial condition
- the promoter’s notorious historical record
Prior to fully embracing the automotive industry, the company used to explore for mineral properties operating as Canterbury Resources Inc. What came out of it was a total failure and four years of wasted opportunities passed before the company adopted its current name. Better late than never, yet not convincing enough of a better outcome this time.
According to a recent investor presentation, the guys at ECAU have a patent pending technology up their sleeves. Since Echo Automotive Inc. has only been active for four months or so, it is kind of hard to believe that the company has made a breakthrough in such a short period of time in the light of its dismal previous business experience.
Needless to say, ECAU‘s finances are dreadful, too. As of Sep. 30, 2012, its quarterly report included:
- $80 thousand of cash
- working capital deficit in excess of $1 million
- zero revenue and a quarterly net loss of approx. $1.5 million
- no investments in R & D
The main culprit for the aforementioned loss is the $1.47 million allocated for general and administrative purposes, including executive compensation. On the other hand, managers have not spent a dime on research and development for the period. We will be keeping a watchful eye on the Q4 report once it comes up to see the total investment in the new technology.
To wrap it up, examining the historical record of the promoter itself is also an integral part of the research process of any pumped stock. In retrospect, The Bedford Team was liable for the three-month promotional campaign on Oryon Technologies, Inc. (PINK:ORYN) for a total of $150 thousand. As shown on the accompanying map, ORYN enjoyed moderate success at the beginning, only to take a huge nosedive in October once the promo well ran dry.
