Georgi Kamburov

Changing Technologies Inc (OTCMKTS:CHGT) Takes A Hit

by Georgi Kamburov April 15, 2015

With the start of the month Changing Technologies Inc (OTCMKTS:CHGT, CHGT message board) went on an absolute tear registering eight consecutive sessions ending in the green. The positive momentum pushed the stock from $0.176 to a high of 50 cents per share reached this Monday. Yesterday however the ticker failed to continue its run up the chart and closed the day with a loss of 8% at $0.41. The correction wasn’t that severe and for now CHGT are holding on to their recent price gains. Will they manage to do so in the next sessions though?

Operating in the extremely hot industry of 3D printing technologies the company is almost guaranteed a certain level of interest from the market. CHGT have further been trying to keep investors excited by publishing new PRs every couple of days. As a whole since the start of February the company has issued 17 different press articles. The company has indeed been quite active on the PR front but sadly the same cannot be said about its business operations.

According to the latest financial report covering the period ending December 31, 2014, CHGT actually have the following financials:

• $14,793 cash and total current assets!!!
• $120 thousand total assets
• $111 thousand total current liabilities
• ZERO revenues
• $223 thousand net loss

In the report CHGT state that their cash on hand is enough to fund their operations for less than a month. Despite the myriad of PRs however so far the company has not revealed any new financing deals. In addition to the troubling financials state of the company CHGT also state that by the end of 2014 their only business activity has been the formation of the company, the designing of its logo and the development of their business plan. At the end of March, this year, they announced that their 3D Printing Portal will begin in-house beta testing. So far no launch date has been mentioned.

So let’s recap – CHGT have depressing financials, they didn’t actually have any operations in the 3D industry at the start of the year and there is no information about when their 3D printing portal is going to be ready. In light of all this the current market price and the corresponding market cap of the company of over $24 million seem to be grossly over-inflated. If you dig even deeper around CHGT you may also find out that 75% of the outstanding shares are owned by Bordesley Group Corp, a Panama corporation or that according to the latest 10-K report the CEO of the company is a former teacher and sales director with no engineering or software development background who does not have a written employment agreement with the company and is being paid $10,000 per month.

The red flags around CHGT are not to be taken lightly. Any trades involving the stock should be preceded by extensive due diligence and careful planning. If the hype around the ticker starts to subside the stock could quickly drop to its previous price ranges. 

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