Eventure Interactive Inc (OTCBB:EVTI) first attracted some serious attention from investors back in November 2014 when the price was hovering between $0.40 and $0.50 per share. By contrast, last Thursday’s session was closed at $0.0017. In other words, EVTI siphoned quite a lot of cash into oblivion. Why did it do that?
Two main reasons stand out. The first one lies with the business plan. It sounds interesting enough. We’re certainly accustomed to using social networks and several newcomers to the industry have shown that although the market seems overcrowded, there’s still money to be made from it. So, the plan certainly sounds solid, but sadly, the same can not be said about its execution.
A few acquisitions were completed during the first three quarters of this year, but EVTI are still in the process of integrating the newly purchased technology and coming up with a finished money-making platform. Up until recently, the company wasn’t prepared to give us any deadlines as well which, especially in light of the laughable Q2 revenues, made some people quite nervous.
The dismal financial reports EVTI put out over the last year or so have certainly acted as a ball and a chain around the stock’s neck, but they weren’t the only thing dragging it down. The lack of revenues meant that EVTI‘s management team was faced with the rather difficult task of funding the company’s operations. They did just about managed to keep the company afloat, but they were forced to issue a massive amount of convertible notes along the way. This has wreaked absolute havoc with the share structure. The discounts on some of the notes reached 70% and the debt providers didn’t really wait for a second invitation.
The number of issued and outstanding shares grew from just over 25 million at the beginning of the year to almost 305 million on August 19. Recently, EVTI was hit by another massive wave of conversion which pushed the O/S count up to a staggering 672 million. That, for the statisticians among you, means that the stock has been diluted by more than 2,500% in a matter of just under nine months.
The 8-K detailing the most recent wave of share printing hit the SEC’s EDGAR system a few hours before Friday’s opening bell, but curiously enough, it didn’t enrage investors. In fact, they helped EVTI finish the week with 29% in gains at $0.0022 per share.
The reason for their enthusiasm stems from a press release published on Thursday. In it, EVTI announced that they are working towards solving the two problems outlined above. They said that the long-awaited social media platform will be launched during holiday season and they said that although there’s a fair chunk of toxic debt still outstanding, a recent financing agreement will help them pay most of it off with cash. Sounds like the people at EVTI‘s helm know what the company needs and they are working towards providing it. As always, however, there is another side of the coin and we reckon that potential investors should consider it carefully.
For one, they mustn’t forget that EVTI isn’t the first company to come around and say that it has a Facebook, Instagram, or Snapchat-rivaling idea. In fact, many have tried, but not many have succeeded.
As for retiring the toxic debt, the new financing agreement with GHS Investments which was first announced a week ago does feature some more favorable terms and it might end up stabilizing EVTI‘s shaky performance. The only problem is, it’s dependent on an S-1 registration form which has yet to be filed. The management team expect to have it effective within two months of publishing it, but there can be absolutely no guarantees and nobody can say for sure what the share structure will look like then. All in all, treading (and trading) carefully remains your best bet.