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In last trading session, the stock price of Bioelectronics Corp (OTCMKTS:BIEL) gained more than 16% to close the day at $0.00140. The gains came at a share volume of 44.91 million compared to average share volume of 30.43 million.

The momentum

After hovering around $0.0014 for three consecutive sessions on low volumes yesterday the stock price of Bioelectroncis witnessed far more volatile trading. Investors shifted over 44 million shares throughout the day, and the increased attention from the investors translated into a positive green close on charts. In fact, the stock managed to recoup all its losses recorded in the preceding trading session.

The reason for Bioelectronics’ plummet in the preceding trading session can be found in recent PR. The company reported that it is still in discussions with the U.S. FDA pertaining the firm’s 510(k) premarket notification for “ActiPach Musculoskeletal Pain Treatment.” Market was not particularly excited to know that apparently the U.S. FDA considers that the 510(k) course is inappropriate.

The highlights

A couple of months earlier, another agency identified some problems with Bioelectronics. The SEC stated that public administrative and stop-and-desist process had to be instituted against company. The SEC claimed erroneous public disclosure and the illegal distribution of securities by Bioelectronics and related entities and persons.

Even if it is ignored, the investors need to consider the dire financial performance of the company. As per the last released report for FY2015, the company reported $144,000 in cash. The total current assets came in at $993,000 while total current liabilities amounted to $5.7 million.

Bioelectronics reported $2.34 million in sales on net loss of $2.47 million. Moreover, the company issued more than 4 billion shares bringing the count of outstanding shares to over 10.7 million at close of FY2015. Investors should approach Bioelectronics stock with utmost caution as the red flags surrounding the firm are extremely serious.

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