eCare Solutions, Inc. (ECSL) research, news, and more from GeoInvesting

Company description

Fri, 13 Sep 2013 04:00:00 GMT

EncounterCare Solutions, Inc. (PINKSHEETS: ECSL), headquartered in Palm Beach Gardens, Florida is an integrated healthcare and Energy company that operates its business through three divisions, the Healthcare Technology Division, the Healthcare Services Division, and the Energy Division. ECSL's three operating businesses offer a broad range of proprietary healthcare technology, products and services and energy that address several substantial target markets, including: The Healthcare Information Technology Market, The Healthcare Telemedicine Market and The Homecare Market. The addition of Cyber Fuels adds a new and exciting area of business.

Research

Thu, 12 Mar 2015 04:00:00 GMT

Still Short EncounterCare Solutions, Inc. (ECSL) ($1.32)

Previously, we disclosed we were short ECSL. We had completed preliminary due diligence on the company and found that it was likely that the company could be a pump and dump. Our preliminary due diligence included researching the track record of the company’s officers and founders, as well as calling the company for descriptions of its methanol based Eco-Flex fuel. From there, we followed up by reaching out to the state of Florida in order to try and determine the realistic chances of ECSL getting their fuels to the pump, and generating revenue. We were unimpressed by our interaction with the company and its potential, and we took our short position. Since then, it’s taken some time for the price to drift lower, but it appears to be at the beginning of a break downward. On January 13, VP of Business Development for ECSL, Christopher Doherty, filed a Form 144 where he proposed to sell 570,000 shares. A glance at January’s chart will clearly show the stock’s decline from over $2 the mid $1 region at this time. We believe the company will continue to trend downward and we are looking to potentially increase our short, especially if the stock moves upward.

Research

Tue, 16 Dec 2014 05:00:00 GMT

Initiated a Short Position in ECSL

On 12/12/2014 we tweeted:

We believe ECSL should be under $1 based on major red flags raised by a recent article by The Deal; non-disclosure of material events add to our bearish sentiment.

We began to establish a short position in ECSL on 12/12/2014 and added to our short position during yesterday’s trading session. The company has been under fire in recent articles written in The Deal, where it was stated:

The company has sold “very little fuel”
The company may have been deceptive in a recent press release claiming fuel “approval”
The person who holds the patent for the company’s fuel additive is in prison for tax evasion

ECSL is a money losing healthcare and alternative fuel company with negative shareholder’s equity of ($1.1M). Over the last five quarters, the company has lost over $1M on anemic revenue ($92k and $102k in the previous two quarters). The stock, which began trading well under $0.50 years ago, briefly passed $3 on news that its alternative Eco Flex 96 methanol based fuels were “approved for sale in Florida.” Upon speaking to the company we get the impression that there was no official approval from the state, rather that the company simply meets the ASTM specifications for a methanol based alternative fuel.

When we spoke to the company, we were told they were making the Eco Flex fuel by purchasing methanol, purchasing gasoline, and using an aromatic octane booster additive that they owned (similar to the ones you can buy at Pep Boys) - and then blending these fuels off site (which costs significant amounts of money). We have some limited experience in alternative fuels and oil & gas and do not believe this is a method of preparing this fuel that can yield any type of significant margin. In addition, after consulting with two organic chemists, we confirmed suspicions that methanol based fuels (barring some unforeseen, massively funded push from the methanol lobby) have little to no value as mainstream fuels. Put simply, they’re terrible for modern vehicle engines and are usually only used in race cars due to the safety associated with the high flash points of the fuel (they don’t blow up as easy as normal gas).

The company gave us the answer that their margin would come from the additive, which represents 1% of the fuel they’re blending. They also assured us that their methanol fuel does not create a water byproduct like other alcohol based fuels. We’re not buying either of these statements.