The brave debut of the active trading of Enterologics Inc. (OTC:ELGO) stock was made yesterday. With the support of stock promoters, the shares of ELGO got a fueled trading volume and a rising price.
Last month, the company disclosed its financial report for the fiscal year ended December 31, 2010 and there was a statement there that ELGO is listed on the OTCBB, but the company’s common stock has never been traded.
Since this Monday, three stock promoters have come to support and increase the demand for the company’s shares. Though the promotional budget of sixty thousand dollars may not be enough for a not very popular stock, ELGO proved to have potential to rise and to attract investors.
Looks like ELGO succeeded to win investors’ confidence with the press release presenting the company’s business model.
In its recently disclosed prospectus supplement update, Enterologics Inc. offers on the best efforts basis up to 32,500,000 shares at a price of $0.05 per share. At the same time, during yesterday’s trading session, ELGO was traded within the range of $0.44 – $0.50 per share.
It is a courageous decision of the company to make the above offering without the involvement of any underwriters or broker-dealers. ELGO even states that the shares will be sold by the company’s executive officers and directors and without any compensation or commission on the proceeds from the sale.
Maybe this was also one of the reasons for the high investor appreciation towards ELGO these days.
The other conceivable reason could be that yesterday the fair, according to investors, market value of Enterologics Inc. reached $12.77 million. The development-stage company has no significant assets, but for the fiscal year end it reports a net loss of $80.7 thousand and a negative cash flow from operations of $58.1 thousand since its inception in 2009.[BANNER]
The business model of Enterologics Inc. is to generate revenues from the sale of pro-biotic, bio-therapeutic drug products.
At present, Enterologics Inc. is focused on the license agreement with Universal Stabilization Technologies, Inc. (UST), a Delaware company, for the exclusive worldwide license of UST’s intellectual property. It is related to the preservation/stabilization of Escherichia coli pro-biotic bacteria and the protection of the company’s use of E. coli bacteria as a pro-biotic.
ELGO plans to enter into a one-year development agreement with UST prior to the middle of May. Yesterday, investors appreciated the rapid upward move of the company’s shares, knowing the company’s program. Now, it remains to expect positive news in a few weeks.
