Last week proved to be uneventful for stock of BioElectronics Corp (OTCMKTS:BIEL) as it closed flat at $0.0006 for three consecutive trading sessions. However, on Friday, the stock jumped more than 66% and closed the week at $0.001. Investors traded more than 458 million shares resulting in $334,000 dollar value for the day. The stock started strong on Monday but failed to close in green in yesterday’s trading session.
The gains recorded on Friday and Monday were not supported by any new press release coming from the company. In fact, Bioelectronics issued its last press release on September 21, and it was not exciting. Also, there was nothing to cheer about in latest financial report.
As per the last financial report, the company reported cash of $29,203. The total current assets and total current liabilities came at $668,000 and $5.46 million, respectively. Bioelectronics reported revenue of $675,000 and net loss came at $732,000.
After issuing 1.6 billion shares in the first half of 2015, Bioelectronics outstanding shares count stands at 7.99 billion. Since 2009 the firm has been increasing the count of authorized shares once per year. However, despite approving the count to the eight billion shares earlier in this year, Bioelectronics further increased authorized shares to 9 billion shares.
If the company continues to issue the share at this pace, it will soon run out of room in the near future. Bioelectronics has been financing its businesses primarily through convertible debt given to related entities.
The latest quarterly report highlights that loans issued to related parties could be converted into over 7 billion shares. It is evident that if this happens it can result in massive dilution for the shareholders of the company. In such a case, it would be wiser for investors to perform due diligence before putting in money into Bioelectronics stock.
Bioelectronics Corp (OTCMKTS:BIEL) totally retraced all the gains made in the previous session and ended the last trading session with a major loss of 35%. The volume of the day surged to 555 million, more than 3 times higher than the daily average of 147 million. The stock had been moving in a broad range of $0.0003-$0.0015 for the last few months but managed to break out on the upside in the previous day. The volume pattern looked promising but the price action of yesterday proved the breakout to be a false one. The bulls may find any turnaround a difficult job in the short term at least.