It seems that some stock promotions helped China Intelligent Lighting and Electronics, Inc. (AMEX:CIL) stock on its up on Friday. Highly demanded, the shares were about to get overbought and recorded a new high.Last Friday was one of the days with lack of any consolidation on the market for CIL stock, which commenced trading on the AMEX in June this year. The extreme daily volatility resulted in a new highest value at $3.54 and the market finally closed at $3.25. Huge volume of nearly 380,000 made the shares almost oversold and the total increase in the stock price was 12.07%.
Though, apart from the favorable second quarter results filed on Thursday, China Intelligent Lighting and Electronics received some PR and some promoting support. Three promotional disclosures for the stock have been made last week, the last one on Friday, and the promoting company has been compensated with $30,000 in cash and with 2,000 restricted shares of CIL. Moreover, it seems that the service will be provided for the stock for a period of twelve months.
To additionally prepare investors for the earnings release, a press release was made by the company last Wednesday. China Intelligent Lighting and Electronics has extended its license agreement with Hyundai Corporation and will further use the “Hyundai” trademark for its lighting products and related wiring accessories over the next three years. According the 10-Q, that license agreement is expected to be extended even further to 2018, though it prohibits using the “Hyundai” branded products outside the PRC, so the intended international expansion will not profit from the established brand.
China Intelligent Lighting and Electronics was initially organized as a shell company, which entered its current field of business through a share exchange transaction. This January, in exchange for all of the issued and outstanding shares of China Intelligent BVI, the company issued 7.09 million shares of common stock to the shareholder of China Intelligent BVI. As a results, China Intelligent BVI became a wholly-owned subsidiary of the company.
The IPO, consisting of 3.35 million common shares at a price of $3 each, was conducted in the middle of June and the cash raised after paying all fees was around $8 million. In January along with the share exchange agreement the company raised in a private placement gross proceeds of $3.5 million through the sale of 1.38 million shares at a price of $2.54 for a share. That explains the boosted up cash position during the first six months of the year, while the negative cash flow from operations almost tripled in that period.
