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Green Automotive Co (OTCMKTS:GACR) Looks Set To Fly Higher

Green Automotive Co (OTCMKTS:GACR) Looks Set To Fly Higher
Written by
Jarrod Wesson
Published on
July 18, 2017
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InsidrFinancial

The share price of Green Automotive Co (OTCMKTS:GACR) has been making very violent moves recently on large volume. Additionally, forum participants on iHub were making interesting investment returns and commenting their trading gains here. Hence, we believe that the market would appreciate a piece about the current operations of GACR.SourceGreen Automotive CompanySourceThe company was founded in Delaware in 1996, which later moved to Nevada in 2011. GACR's business objective, as stated in the last report, is explained with the following words:

"We are involved in the development, manufacturing and sale of diesel, gas, CNG and electric buses. We plan to move forward with the production of all-electric buses, as well as begin converting other mass transit vehicles into electric powered vehicles. We expect this to be the core focus of our business activities going forward." Source

Electric vehicles is a growing industry that we have assessed in many articles in InsiderFinancial. Lot78 Inc (OTCMKTS: LOTE), Kandi Technologies Group, Inc. and Ballard Power Systems Inc. (USA) (NASDAQ:BLDP) are all very good examples of companies operating in the same sector. They all have provided good returns so far this year. Read those pieces if the sector interests you.What's the product developed by GACR? A prototype electric bus named E-Patriot line was recently introduced by the company. It can transport 15-23 passengers and is "expected to have a hundred mile range in-between charges when it is ready for market." Have a look at the following video from Fox Business news:https://youtu.be/hM-TPkEkFNw?list=PLrbdSW3xih2TCeMTnbeYLbJSCOnKhX1-aRecent Developments, Shares Outstanding, and Financial StatementsThe most interesting announcements put out by the company are old. In 2016, the market got to know that Typenex Co-Investment, LLC acquired interests in the company. This market participant acquired convertible notes and warrants that give it the right to acquire 9.99% of GACR. The stake was acquired without the purpose of acquiring full control of the company:

"By signing below I certify that, to the best of my knowledge and belief, the securities referred to above were acquired and are held in the ordinary course of business and were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect, other than activities solely in connection with a nomination under" Source

We noted this fact because many participants on iHub stated that the company could be soon acquired by a third party. Typenex Co-Investment, LLC, said that it will not do that.Since this is the last filing reported, we obtained the amount of shares outstanding from it, which is all the time an interesting factor: 747,837,198 outstanding shares. On the OTC website, we could also find some other statistics to understand how the equity is structured:Market Value1$731,893as of Jul 14, 2017Authorized Shares1,000,000,000as of Jun 30, 2012-RestrictedNot Available-UnrestrictedNot AvailableHeld at DTCNot AvailableFloat10,547,331as of Jun 30, 2012Par Value0.001SourceAdditionally, the last quarterly report was also put out in 2016. We were able to have a look at the most recent financial statements. The following is the asset side:Current Assets September 30, 2014 December 31, 2013Cash $44,135 $2,902Accounts receivable800—Inventories599,657177,346Prepaid expenses and deposits—545,409Other5,138—Current assets from non-continuing operations—492,806Total Current Assets649,7301,218,463Non-Current AssetsProperty and equipment, net372,219455,287Non-current assets from non-continuing operations—153,118Total Non-Current Assets372,219608,405Other AssetsDeferred financing cost—60,000Total Other Assets—60,000Total Assets$1,021,949$1,886,868SourceThe liabilities reported are the following:Current LiabilitiesAccounts payable and accrued expenses$554,127$197,179Current portion of notes payable1,067,426845,396Credit facility and other advances14,134—Derivative liability12,814,38371,752,773Funds received not converted into equity (net of discount)—215,000Sums due to Global Trade Finance25,00025,000Sums due to Global Market Advisors170,889170,889Other payables—176,836Current liabilities from discontinued operations2,954,0511,962,611Total Current Liabilities17,600,01075,345,683Long-term LiabilitiesLoans payable, net of current maturities22,500203,946Total Long-term Liabilities22,500203,946Total Liabilities17,622,51075,549,629SourceThe readers concerned about the dilution of the company will be glad. This is the information that we could find regarding the convertible securities sold by the company. The amount of convertible securities is not large:Stockholder's DeficitPreferred stock, Class A Convertible Preferred Stock100,000,000 shares authorized at September 30, 2014and December 31, 2013, $.001 par value, 782,701 and 924,366 sharesissued and outstanding at September 30, 2014 and December 31, 2013, respectively783924Preferred stock, Class Y Convertible Preferred Stock40,000,000 shares authorized at September 30, 2014$.001 par value, 35,561,651 shares issued and outstandingat September 30, 2014 and 0 at December 31, 2013, respectively35,563Common stock, 900,000,000 shares authorized,$.001 par value 639,988,456 and 405,043,436 shares issuedand outstanding at September 30, 2014 and December 31, 2013, respectively639,988405,043SourceWhy did the share price jumped recently? - Very reduced Float, M&A marketThere may be several reasons to explain the violent share price moves. First of all, the fact that the float is 10,547,331 shares and the total outstanding shares is 747,837,198 shares could explain it. Why? The float means the number of shares available for trading the stock:

"The number of shares available for trading of a particular stock. Floating stock is calculated by subtracting closely-held shares and restricted stock from a firm’s total outstanding shares. Closely-held shares are those owned by insiders, major shareholders and employees, while restricted stock refers to insider shares that cannot be traded because of a temporary restriction such as the lock-up period after an initial public offering. A stock with a small float will generally be more volatile than a stock with a large float, apart from having limited liquidity and wider bid-ask spread." Source

GACR is one of those stocks with very little float. For example, Typenex Co-Investment, LLC, owns more than 7 times the float. Other market participants could be creating such share price movements by buying and selling the stock.The company announced large amount of transactions in the past. Here are some transactions announced (some of them closed, some did not) that could be read in this document.

  • On September 1, 2011, Green Automotive Company entered into a Stock Purchase Agreement and Escrow Agreement with Mark E. Crone and Bosch Equities, L.P.
  • On February 10, 2012, Green Automotive Company entered into a Merger Agreement and Plan of Reorganization with Matter of Time I Co., a Nevada corporation.
  • On June 28, 2012, Stock Exchange Agreement with Liberty Electric Cars Limited., an England and Wales private company limited.
  • On October 12, 2012, acquisition and Stock Exchange Agreement with Newport Coachworks, Inc.
  • On January 31, 2013, binding agreement to buy U.K.-based electric vehicle distributor Going Green Limited.
  • January 9, 2014, acquisition of 21.63% of Viridian Motor Corporation (VMC).

These acquisitions show that the company was growing the business until very recently. Perhaps there are market participants purchasing shares, as they believe that the growth would continue.Conclusion - Buyer BewareOTC Markets has added the Buyer Beware symbol on the company's profile. What does it mean? In our opinion, the fact that the company has not updated its financial information is the main reason. GACR will need to update this information. Once this is done, it will have to issue a letter with the help of an attorney stating that it is in compliance with the regulations. In GACR, they know how to do it, as a similar letter was received by the market in 2012. Updating the information and sending the letter may have a very big impact on the stock price. Thus, be alert on it. To sum up, the company operates in a growing industry and could be about to surprise the market with some big news very soon.We will be updating our subscribers as soon as we know more. For the latest updates on GACR, sign up below!Image courtesy of hans-johnson via FlickrDisclosure: We have no position in GACR and have not been compensated for this article.

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