Borislav Tonev

Changing Technologies Inc (OTCMKTS:CHGT) With Another Ugly Crash

by Borislav Tonev February 23, 2016

As you can see from the company name, Changing Technologies Inc (OTCMKTS:CHGT, CHGT message board) wants to “change technologies”. How many pieces of technology has it managed to change so far?

None.

When it first landed in Pennyland, the company started issuing bombastic press releases in an attempt to convince investors that CHGT will grow just as quickly as the 3-D printing industry. The figures in the latest 10-Q show pretty definitively that this isn't happening:

  • cash: $589
  • current assets: $1,464
  • current liabilities: $237,560
  • quarterly revenues: $1,269
  • quarterly net loss: $283,261

It is indeed a fact that CHGT started selling some 3-D printed products a few months ago, but it's painfully obvious that the sales are not exactly huge. This, by the way, is hardly a surprise considering the fact that Marco Valenzuela, CHGT's CEO who also appears to be a 3-D designer, is selling the same exact products through his own website (screenshot links here and here).

Predictably, thanks to the dismal sales and the discrepancy between the optimism in the press releases and what is actually going on, CHGT has lost a huge portion of its value. When it logged its first active sessions during the third quarter of 2014, the ticker was hovering around the $3 per share mark. Right now, after a painful 28% crash yesterday, it's sitting at a little over $0.14.

So, the people who fell for the unnecessary PR optimism have probably seen a vast portion of their money go down the drain. But has anyone profited from CHGT?

Well, the people who took part in the initial public offering and bought 15 million shares (as adjusted for the stock split) for $30 thousand have probably made some money already. We've no idea whether they still have some shares left, but even if they're out, the potential for a significant amount of discounted stock hitting the open market remains.

Last year, CHGT issued just over $450 thousand worth of notes convertible at fixed prices ranging from $0.02 to $0.09 per share. The profit margin for the note holders is still quite huge, and they might be eager to take advantage of it.

Make sure you bear this in mind while reading through CHGT's forward-looking press releases.

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