Violeta Slavtchevska

Composite Technology Corp. (OTC:CPTCQ) Tanks Heavily on the Bankruptcy News

by Violeta Slavtchevska April 12, 2011
Yesterday the share price of Composite Technology Corp. (OTC:CPTCQ, CPTCQ message board) tanked dramatically as the company filed voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code. In other words, CPTCQ is bankrupt and if for some investors the event has been anticipated, the extreme volume and the 3-year low suggest that for many others the news must have been a shock.CPTC.png

Under its new symbol, CPTCQ stock closed the market at $0.071 and with a 62.63% loss in the value from the previous day close. Trading volume was 12,51 million shares and during the day CPTCQ share price fell to $0.04, a sharp more down and a shocking break up of the previous trading channel.

Yesterday the company announced that it has filed for bankruptcy and will from now on run its operations as a "debtor-in-possession". The 8-K filing says also that at the beginning of the month some of the company's lenders have given a notice of default for some of CPTCQ debts and have requested that the company pays immediately obligations of $10.5 million in principal together with accrued interest and relevant fees.Composite_Technology.jpg

As the outcome suggests, this couldn't have happened that easily. In the last two months Composite Technology used all available sources to get some cash and cover its most urgent capital needs. The company entered into two promissory note agreements to provide bridge loans for a total of $700,000, whereby the lenders received also 1.4 million warrants to purchase shares of CPTCQ stock at a price of $0.25 per share. The warrants may be exercised in a "cashless" manner unless registered for resale under an effective registration statement.

Before that, in February the company did not hesitate to borrow money even from its CFO, from its President and from two of its Directors. The total amount borrowed was $236,274, again as a bridge loan and these lenders also received warrants to purchase 472,548 shares of the company's common stock at $0.25 per share.

It looks like nothing could prevent the inevitable, which some investors probably anticipated already after CPTCQ filed its latest financial report. It showed that at the end of 2010 CPTCQ has current assets of $19.3 million against current liabilities of $52.8 million. The desired increase in the customer orders and respectively in the sales did not come over the years and for the year ended September 30, 2010 the company incurred a net loss of $19.8 million and had negative operating cash flow of $17.4 million. The accumulated deficit up to that date amounts for over $277 million.

Comments 6

1. Guest
September 06, 2012, 12:27PM

Quotes CTCs product is phenominal, if they can get the market to see that then yes the company has massive potential. I've personally seen the company go from start-up to now, CTC has gotten through massive obstacles and I fully believe it will move forward.

2. Guest
May 03, 2012, 01:44PM

Quotes @rachelttaylor - Thanks for the update on Jason - he seems like a positive force for CPTC

when did they emerge from Chapter 11 and do you have any idea if he is still there?

Also I see that they have survived their patent clawback and can now carry on with the biz!

3. gava87
December 19, 2011, 07:59AM

Quotes Yeah, the value in $ is not huge, but the number of your shares represents 1/6 of the traded volume on CPTCQ on Friday, so it's not negligible. Let's jump to the message board. I'm watching CPTCQ too.

4. jord_mason1
December 19, 2011, 07:50AM

Quotes I don't know the names you mentioned Rachel, but seems really shady all this insolvency quitting of CPTCQ. I don't mean the way the company reports to institutions and investors. In August almost all of the old management board "tendered" their resignations for positions as CEO, CFO, COO, and President. So, the the big question now is are they holding CTC Acquisition Corporation. Let's go to the message board (link above). Possibly you have more info to share.

5. Guest
December 15, 2011, 11:37AM

Quotes I just recently bought 50 thousand shares of CPTCQ common stock. I know I'm not going to become an instant millionaire,I just figured what the hell the stock was dirt cheap. In any case, is their any hope for this company going forward? What mean by forward is, 3-5 years down the road?

6. rachelttaylor
December 13, 2011, 02:53AM

Quotes I am an exec recruiter and had a contract with CTC for the VP, R&D search. I placed Jason Huang as the VP, R&D at CTC. They stalled paying me for a year until they were heading into bankruptcy and now that they have emerged from Chapter 11, Jason is the CEO.

Type the characters that you see in the box (5 characters).