EcoloCap Solutions Inc. (fka ECOS)

[deal guy]

This is a lot more complex than there 8-K laid out. Once they cracked the financials they likely figured out they had more issues with the financials. The derivative accounting rules are very complex and ECOS has more derivatives than they first noted.

Not only do they have a derivative for the convertible debt, but they have two sets of derivatives from the LRS transaction which need to be adjusted for.
1) LRS has a warrant to acquire ECOS shares at a fixed price set today but exercisable in the future. This is a stock derivative under GAAP. They need to value the derivative and record expense or income based on movements in their stock price until the warrants are exercised. In a small cap these valuations are volatile. They should have more expense to record from this warrant.
2) LRS has the right to acquire 5% of the shares of Bio Art for each of the first 8 machines. This is another derivative of equity under GAAP. They need to record expense for the grant of this right and then record income or expense as it moves until the underlying shares are issued.
3) Finally, when they formed the Bio Art JV they should have consolidated Bio Art into their financials. Since Bio Art had limited operations in 2016, the consolidation impacts disclosure more than numbers. In 2017 the consolidation of Bio Art will impact earnings and minority interest.

Derivatives area favorite subject of the SEC right now. I am not surprised that this is taking time more to get done.