Borislav Tonev

Car Charging Group Inc (OTCMKTS:CCGI) Back Above $1 Per Share

by Borislav Tonev October 14, 2013
CCGI.pngThe last couple of months have been pretty tough for Car Charging Group Inc (OTCMKTS:CCGI, CCGI message board)'s shareholders. During the first half of August, the ticker was given a short push in the right direction when investors were anxiously awaiting the financial results for the second quarter of 2013. It's still unknown whether it was the expectations that were set too high, or whether it was the management team that failed to deliver, but it's pretty clear that people weren't happy with the figures they saw in the 10-Q. Needless to say, the price took the brunt of the impact.

The report itself came out on August 20 and it immediately triggered some heavy selling of stock resulting in daily losses of around 17%. Over the next few weeks, CCGI managed to regains some of the lost ground, but its performance was still rather poor. The first seven sessions of October were particularly painful. Despite the three optimistic press announcement that the company made between October 2 and October 7, the ticker lost quite a bit of its value and dropped below the $1 per share mark for the first time in more than a year.

The reason for the rather dismal behavior, as we mentioned, is to be found in the Q2 financial statement. Here's a summary of the figures that caused all the trouble:

  • cash: $165 thousand
  • current assets: $1.1 million
  • current liabilities: $8.9 million
  • quarterly revenue: $77 thousand
  • quarterly net loss: $5.6 million
  • accumulated deficit: $26.8 million

The numbers look particularly disturbing when you compare them to the ones found in the 10-Q covering the same period of 2012. If you do that, you'll find that the current liabilities have grown by more than 1,000%, the revenues have shrunk by about 66% while the net loss is five times bigger than the one registered a year ago.

Still, CCGI seem optimistic about the future and say that they expect demand for EV chargers to rise sufficiently by the second half of 2014 which could give them a chance for turning a profit. Investors tended to disagree... until a new press release hit the wire about half an hour before Thursday's close.

The announcement informed us that CCGI have managed to win the auction for some of the assets that belonged to EV charger manufacturer ECOtality Inc (OTCMKTS:ECTYQ) who had some problems with their devices earlier this year and later filed for bankruptcy. The news managed to give the ticker a strong enough boost and it propelled it above the $1 per share mark on Friday. The daily gains amount to nearly 30% and the dollar volume stands at $214 thousand which is not too shabby. Will CCGI manage a more consistent performance though?

CCGI_logo.pngThat remains to be seen. The newly acquired assets should improve the balance sheet somewhat, but the PR doesn't give us a clear picture of how much exactly has been added to the financial statement. What's more, there's no guarantee that the charging stations will bring profitability closer and, on the whole, it really is way too early to say for sure how positive the impact will be.

That's why, although CCGI's business plan is interesting and although the industry is expected to grow in the near future, there is still quite a lot of risk involved. Make sure you consider all the options carefully before making any investment decisions.

Other notable OTC movers from Friday include Nutranomics, Inc. f/k/a Buka Ventures, Inc. (OTCBB:NNRX) who added a fifth to their value after announcing that their revenues have increased and Pacific Clean Water Technologies, Inc. f/k/a Unseen Solar, Inc. (OTCMKTS:PCWT) who also gained around 27% only to get suspended by the SEC shortly after the closing bell.

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