DD Support Board and Research Team

[nodummy]

East Coast Diversified Corp (ECDC) - warning signs abound

This company just filed two 8Ks on Friday neither one of them good, in my opinion, for the shareholders.

The first 8K announced that they were raising the Authorized common share count from 199,000,000 to 480,000,000:

http://www.sec.gov/Archives/edgar/data/1256540/000101968711002217/ecdc_8k-2.htm

http://nvsos.gov/sosentitysearch/corpActions.aspx?lx8nvq=T%252fWqZKo7woEycAVd7fW08w%253d%253d&CorpName=EAST+COAST+DIVERSIFIED+CORPORATION

The second 8K announced that they had signed a dilution based financing agreement with Southridge Partners II, LP

http://www.sec.gov/Archives/edgar/data/1256540/000101968711002218/ecdc_8k.htm

The agreement gives Southridge Partners 600,000 restricted shares up front for signing.

The agreement also gives Southridge Partners permission to raise money for ECDC through dilution. Southridge Partners will get to purchase ECDC shares at a discount (92% of the the average of the two lowest closing price over the previous 5 trading days). Southridge Partners will then be allowed to immediately sell those shares into the market to make their money back plus a modest profit.

The only limitations listed in the agreement is that Southridge Partners can purchase up to $10,000,000 worth of stock at a discount to sell into the market. I would assume they will keep their ownership at any given time under 10% to avoid having to do any filings as a beneficial owner.

At the current trading price of $.0269/share Southridge Partners would be able to purchase and then dilute 371,747,211 shares into the market. That will reap havoc on the ECDC share price. As the ECDC share price falls because of the dilution that will only make the 371,747,211 number end up being that much bigger further magnifying the affect of the dilution.

It is no wonder ECDC added almost 300,000,000 million more authorized shares last week. All in preparation for the mass dilution about to take place over the coming weeks and months.

I would be willing to bet that ECDC and Southridge Partners will do their best to run lots of promotions/press releases to try to support the share price as much as possible while the share selling is going on.


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Now if those two major red flags aren't enough. How about a little history on Southridge Partners:

Southridge Partners can be linked to Steven Hicks and has been found in lots of alarming links:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aaMJTN2IBE98

http://www.zamansky.com/cases/zamansky-warns-investors-about-pipe-fund-fraud.html

http://alchemy.secondmarket.com/bigpicture/sec-enforcers-eye-valuation-of-illiquid-assets/

http://www.stamfordadvocate.com/business/article/State-SEC-sue-Hicks-722996.php

http://online.wsj.com/article/SB10001424052702303467004575574422092467294.html

http://www.finalternatives.com/node/14299



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How are the financials for this company?

From the last 10Q:

http://www.sec.gov/Archives/edgar/data/1256540/000101968711001566/ecdc_10q-03311.htm

$4,621 in cash

The company did have $164,078 in revenues and $114,336 in profits from sales, but after subtracting operating costs they lost $225,979 for the quarter bringing their overall deficit to $11,019,529.

The company has nearly $1,500,000 in loans and $1,200,000 in accrued salaries and expenses owed.

That's a lot of debt that will have to be converted into shares of common stock to pay off.

During the quarter the company didn't borrow any more money, but they did convert $70,000 in loans into 5,800,000 shares of common stock. That's a conversion ratio of $.012/share. The company also converted $37,500 in loans to a related party into 4,055,556 shares of common stock. That's a conversion ratio of $.0092/share.

Other discounted shares being issued during the last quarter includes the following:

During the three months ended March 31, 2011, the Company converted $230,000 of accrued salaries due to Mr. Aladesuyi to common stock and issued 32,857,143 shares to Mr. Aladesuyi, at a price of $0.007 per share based on the market value of the shares at the time of issuance.

During the three months ended March 31, 2011, the Company issued 357,143 shares to an unrelated party for conversion of an outstanding accounts payable of $2,500, at a price of $0.007 per share based on the market value of the shares at the time of issuance.

During the three months ended March 31, 2011, the Company issued 500,000 shares to unrelated parties for services, at an average price of $0.012 per share based on the market value of the shares at the time of issuance.

The company also issued 4,220,089 shares of common stock in private placements for a total of $42,500 ($0.010 per share) during the last quarter.



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Lots of reasons to stay away from ECDC