CHNG stock has been tanking since it became clear that the company’s financial condition is worse than previously assumed and the filed 10-K and 10-Q will have to be filed once again. On Friday some stabilization occurred, but it seems that it was again due to the usual stock promoters. The company is still paying a monthly fee of $10,000 to a stock promoter and on Friday the next portion of advertising materials for CHNG have been sent to investors.
As a result, the share price at least did not drop further down and closed at exactly $5 on higher than the average trading volume. Even a 0.20% increase from the previous close was reported.
Straight after it was announced that some purchasers of CHNG common stock will sue the company for not mentioning a new $17.6 million bank loan and a following possible default on some senior notes in the latest financial report, a press release attempted to distract investor attention. It said that the company has completed the construction of a liquefied natural gas station in Shaanxi Province and the station will open on Thursday.
CHNG share price looks stable by now on the consolidated market and certain improved technical indicators point that some buying may start soon. Maybe then the shares will also improve their oversold status, as the proper financial reports revealing the true state of CHNG financial have already been filed.
They show that CHNG now has almost $53 million in current liabilities at the end of March due to the reclassification of the long-term debt under the notes to sort-term debt. That change is considerable, as the previously stated current liabilities have been only $7.3 million. Thus, at the end of June the company suddenly had working capital deficit of nearly $5 million.
The debt reclassification was necessary because certain assets of the company have served as collateral for the new loan, which has been prohibited under the contract for the notes. Now, the lenders can require immediate repayment of the principal amount and all accrued interest.
