It is a surprising start to the trading day for the penny stock of Eco Building Products, Inc. (ECOB) after announcing $100 million letter of credit for expansion. ECOB stock price opened at 0.144 and has already traded $171,189 worth on volume of 1,471,829 shares via 81 executed trades. InsurFinancial Holdings, Plc negotiated the credit facility which has driven the penny stock of Eco Building Products to the half way point towards their 52 week high of 0.29 from one year ago today.
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Granted the financial data is from fiscal Q3 ended March 31, 2012, Eco Building Products reported product sales of $1,089,724 compared to $16,513 for the three months ended March 31, 2011. Total revenues were $1,089,724 and $45,313 respectively. For the nine months ended March 31, 2012, the Company reported product sales of $2,777,248 compared to $739,112 for the nine months ended March 31, 2011. Hence, the company has really ramped up their sales in the recent nine months which should put that $100 million line fo cresit to good use.
This facility is provided by the Bank of China from the private client division of its Beijing, China offices. The Bank of China is rated A-1, by Standard and Poor’s, and is one of the top banks in the world. Under the terms, this facility credit support will not expire until 4th of December 2016.
Frthermore, the agreement grants an option that allows InsurFinancial Holdings, Plc to convert their fee into an equity investment of up to $5 million each year for the next four years. The option calls for the share price of the additional equity investment to be calculated at 120% of the three month trailing average of ECOB’s stock.
About ECOB Stock
Eco Building Products, Inc. is a manufacturer of proprietary wood products treated with an eco-friendly proprietary chemistry that protects against fire, mold/mycotoxins, fungus, rot-decay, wood ingesting insects and termites with ECOB WoodSurfaceFilm™ and FRC™ technology (Fire Retardant Coating). Eco Building products, “Eco Red Shield”, “Eco Blue Shield” & “Eco Clear Shield” utilizing patent pending technology is the ultimate in wood protection, preservation, and fire safety to building components constructed of wood; from joists, beams and paneling, to floors and ceilings.
Click here to view the SEC filings for ECOB.
Bottom Line: The penny stock of Eco Building Products, Inc., ECOB, is best treated as a swing trade since there is very little chance that this ends the trading session above 0.144. Considering that ECOB has already doubled its 20 day average volume, 711,219, expect some great opportunities to get in and out during the trading session.
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