OOIL Slick

Shareholders Take It On the Chin as OriginClear, Inc. Pumps Its Shares Into Oblivion

June 17, 2015: Yet another Pump & Dump campaign has launched on shares of OriginClear, Inc. (OOIL), the 18th such promotion in just under 4 years. While brief respites from hawking the intrinsically worthless shares of this company make each pump effort distinct, in reality shares have been continuously pushed by the company onto anybody who would listen during that entire 4 year stretch. One only need to check out the ticker on our Hall of Fame to see that fact.

To its credit, OOIL makes no bones about the fact that it is responsible for the pumping of its own stock. This is in contrast to the usually fraudulent schemes hiding behind some non-existent third party that claims to be funding the promotion. OOIL's responsibility is made quite clear within the disclaimers provided at the end of the promotional newsletters that have landed in the Inboxes of interested parties with alarming regularity. The latest newsletter spells out that Jeff Bishop's Action Media Holdings, the publisher of duplicative newsletters Stock Preacher, Beacon Equity, Investor Soup and others, has been previously paid $190,000 for "advertising and promotional services" and $20,000 for the current effort.

Many cheerleaders would refer to such an aboveboard disclaimer as "transparency", however, we find it indicative of management's negligence that after four years of pumping, it hasn't yet realized that the shareholders' well being is compromised--share prices built on hype never maintain their artificial level; or, at a minimum, it doesn't care. A look at OOIL's chart since September 2011, when we first began tracking the promotions on this company, says it all.

OOIL Chart Since September 2011

That Action Media Holdings--previously known as Sherwood Ventures and Blue Wave Advisors before that--would have willingly taken part in this raping of the public as the primary promoter of OOIL throughout the years, clearly displays its disregard for the financial security of its subscribers. One would think that since the share price declined after 17 promotions, it would probably do the same on the 18th promotion. But then it's "anything for a buck" with these heartless snake oil salesmen. It's no wonder that the newsletters' parent corporation frequently changes names.

T. Riggs Eckleberry

The OOIL stock hype has unquestionably benefited CEO T. Riggs Eckelberry. We can see that he has divested himself of stock by look at the annual Form 10-K filings by the company. In this filing for the year ending December 31, 2012, Eckelberry is reported as owning 1,872,720 shares. However, according to the filing for the year ending December 31, 2013, he owns only 1,106,812 shares. If we assume that Riggs did not get any of the 4 million shares issued under the June 14, 2013 stock incentive plan, which would indeed be a far-fetched assumption, then he rid himself of a minimum of 765,908 shares. At that year's average trade of about $.40 per share, Riggs picked up over $300,000 from stock sales, courtesy of those who were about to take massive hits or become bag holders.

Nicholas Eckleberry

We note that at the year ending December 31, 2014, Eckelberry owned only 793,602 shares, suggesting that he cashed in some more of his chips. Don't worry about Riggs running out of stock though.  That same Form 10-K filing reports that Eckelberry awarded himself an incentive based 40 million shares of stock, under a Restricted Stock Award Plan. At the same time, his brother Nicholas was given 10 million shares under the RSA, and two directors received 5 million shares each. The vesting of Nicholas' and the directors' stock requires that OOIL's annual gross revenues be at least $2.5 million, a goal that is unlikely to soon be realized give the company's history.  Forty percent of Riggs' RSA stock becomes vested after July 1, 2015, once OOIL's market cap reaches $15 million. At the rate that the company issues stock--70 million shares were registered under Form S-8 for the RSA, rather than the previously declared 60 million shares--we'd bet that a $15 million market cap will be achieved by brute force, enabling Riggs to sell off another 40 million shares soon after.

Much of the soon-to-be-created new stock will service OOIL's large convertible debt. Evidence of that eventuality is found under the "Subsequent Events" section of the most recent 10-Q.

Between April 2, 2015 and April 21, 2015, holders of convertible notes, known in our filings as “Convertible Promissory Notes” converted an aggregate outstanding principal amount of $180,000, plus unpaid interest of $18,489 into an aggregate of 6,687,866 shares of the Company’s common stock.

Between April 9, 2015 and May 12, 2015, the Company issued 3,500,000 shares of common stock for services at a fair value of $200,900.

On May 12, 2015, a holder of a convertible note issued in exchange for an accounts payable, known in our filings as “Convertible Promissory Notes” converted an aggregate outstanding principal amount of $230,000 into an aggregate of 4,455,422 shares of the Company’s common stock.

According to the Form 10-Q filed by the company for the period ending March 31, 2014, unidentified creditors held $3,704,158 in convertible notes, leaving at least another $3,254,769 worth of debt to be satisfied and presumably soon to be converted to stock. It seems likely that additional notes have since been issued, thus increasing the outstanding convertible debt. It is also probable that OOIL has funded the Pump & Dump campaigns in order to enable debt holders to divest themselves of shares obtained by the conversion of debt and perhaps take on new notes. How likely is it that Eckleberry spent hundreds of thousands of dollars in promotions just to sell his own stock?

Can a reverse split be far off?

The cash generated by the notes is presumably required in order to support Riggs' generous compensation, which included a 2014 salary of $260,000 and a bonus of  $160,000.  In 2013, those numbers were $260,000 and $120,000. Considering OOIL reports earnings which can be classified as anemic at best; the company's liabilities are ever increasing; and, shareholders have been sodomized, we can't imagine how Riggs is deserving of these bonuses.

Perhaps the fleecing of investors is an act that is worthy of recognition and commendation.