BOREAL WATER COLLECT (OTCMKTS:BRWC) shed all of its early gains yesterday, which is a usual trend for any company with a higher dilution. After ascending by nearly 50%, the stock fell down, giving away half of the gains and returning to triple zero level.

Retired convertible notes

The press release that was being published by the company stated that it has retired all of its outstanding convertible notes. As a result of the conversion of all the convertible notes held by a number of financial companies, BOREAL WATER COLLECT (OTCMKTS:BRWC) claimed that its balance sheet has improved. Besides this, the company confirmed that it has not entered into arrangement since October 2014 that led to the further issuance of convertible notes.

Additionally, it has reassured the investors that it does not intend to issue anymore convertible notes in the near term. Moreover, BOREAL WATER COLLECT (OTCMKTS:BRWC) has expressed confidence that it will systematically reduce the dependence on convertible debt financing for funding expansion and operations.

Big dilution of stock

The company’s CEO Francine Lavoie said that retiring the convertible debt was among the primary goal of it. He added that by discarding such debt instruments, the company is better prepared to concentrate on boosting its business and creating value for the shareholders. Though the announcement is positive, but a closer look at the conversion of debt reveals that nearly 2.14 billion common stock of the company were issued in between November 2014 to June 2015.

Further, the 8-K indicates that the company has issued as much as 1.15 billion stock within a short period of three months, which is not desirable even for a pink sheet company. Clearly, such quantum of dilution does not make the company’s fit for investors at this point of time.

The stock of BOREAL WATER COLLECT (OTCMKTS:BRWC) traded lower by 25% to $0.0009 during the previous trading session as 147 million shares changed hands on the day.