Uni Core Holdings Corp. (fka UCHC)

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Hotstocked TRASHED $UCHC http://www.hotstocked.com/article/88139/uni-core-holdings-corp-otcmkts-uchc-blasts-off.html

By Borislav Tonev, my favorite Hotstocked contributor!

By Borislav Tonev

September 29, 2014

Uni Core Holdings Corp (OTCMKTS:UCHC) Blasts Off Thanks to a Cheap Pump

Stock Freak received $16 thousand from a third party called Actual Investments LLC and in exchange, they sent out a few emails touting Uni Core Holdings Corp (OTCMKTS:UCHC, UCHC message board) before the start of Friday's session. Some more promoters jumped in and the increased awareness, coupled with the affordable price (UCHC closed Thursday's session at just $0.0014 per share), meant that people were jumping in head over heels.

In a matter of just six and a half hours, the ticker gained a whopping 814% while investors traded more than $240 thousand worth of stock. UCHC closed last week's trading at $0.0128 and it's now sitting above the penny-per-share level for the first time since the beginning of August.

Apparently, the pumpers' promises of wealth and fortune are having their effects on investors and people are ready to place their Buy orders without thinking too much about it. Once you take a closer look at the promoters' optimistic claims and compare them to what's actually going on, however, you'll see that things aren't so bright.

Stock Psycho a/k/a Darth Trader, for example, also took part in the pump and according to their disclaimer, they did it for free. Unfortunately, the lack of compensation has resulted in some serious holes in their due diligence. The promotional outfit said that UCHC has “major revenue” and they also told their subscribers that the company's market cap was hovering around $3 thousand last week. Neither of these claims appear to correspond to reality.

The latest 10-Q, for example, shows that on March 31, UCHC had:
•cash: $280 thousand
•current assets: $3.7 million
•current liabilities: $21 million
•quarterly revenues: $74 thousand
•quarterly net loss: $173 thousand

As you can see, the “major” revenues that Stock Psycho talk about are not “major” at all. In fact, for reasons that are not clearly explained, UCHC was forced to shut down two of its subsidiaries in 2013 which means that sales have experienced a massive 95% drop year over year. To top it all off, the debt is absolutely colossal, even by OTC standards.

Then we come to the share structure. Back in February, UCHC effectuated a 1 for 5,000 reverse split which means that on March 31, the number of issued and outstanding shares was sitting at just under 2.2 million. According to the company profile, the O/S count hasn't changed since then. During Friday's session, however, investors traded more than 23 million shares.

As you probably know, in theory, it is possible for the daily trading volume to exceed the float. Topping it by a factor of ten, however, is extremely unlikely. We won't be at all surprised if the 10-K covering the fiscal year ended June 30 (which should be out within the next 48 hours) tell us that a large amount of stock has been issued over the last six months. We also won't be shocked if the people who got the newly printed shares decide to take advantage of the inflated price and unleash their holdings on the open market. Proceeding with caution might not be a bad call.