Ultimate Sports Inc. (PINK:USPS) stock price action set off several alerts on Monday when the company said it will continue with the previous joint venture plans with EnSol, LLC.
Despite the increased trading volume, the stock price action looks weird, to say the least. The shares added 2% in value over the last trading session, but the intraday chart shows scarce action throughout the day. The stock is highly volatile and despite the day after day increases in the price, the general trend points down as seen left on the chart.
The update contained a more detailed description of the Tire Converter unit and the prototype testing. A closed loop system used to process tire chips yielded more than 95% of usable products after the conversion took place.
A joint venture agreement with EnSol is currently the only reason why this company keeps investors interested. The companies joined forces back in October to manufacture EnSol’s Tire Converter product. Ultimate Sports agreed to provide the capital for this project.
Details on this deal were published in the beginning of November, thus creating heightened interest in the company’s stock. USPS didn’t say how they will gather the required capital, though it is pretty much clear they will use the benefits of being a public company. [BANNER]
Tire Converter Project aims to develop a unit that will transform used tires back into carbon, oil, gas and petroleum solvents. According to the press releases, Dilution Solvent, the end product of this converter system, can also be used in the oil industry to help lift the heavy oil at commercially viable prices.
While the project looks attractive because of its nature, investing in USPS stock possess great risk at the moment. The company doesn’t have significant capital available – its balance sheet shows more debt than capital. The easiest way to raise additional funds is through equity/debt instruments, which create a threat for dilution.
