800 Commerce Inc (OTCMKTS:ETHG) looks to be undergoing a significant transformation from a provider of merchant processing and commerce solutions to wine company and biotechnology or at least diversifying into an entirely new industries. Over the last few days the stock price and volume has gone parabolic. The stock has surged over 500% over the last ten days and significantly outperforming the S&P500.
Over the last six months or so ETHG has been signing Letters of Intent into unusual industries for a credit card processing company. As we take a closer look at ETHG, there are several interesting revelations that have been discovered.
About four months ago, ETHG signed a letter of intent to acquire a winery estate. The intended purchase included all the assets of the winery operation, including over 80 acres of agricultural land, bed and breakfast, premium wine brands, operating wine club, retail and e-commerce sales located in California. Forbes Wine Trends that the fast growing alternative package wine industry that this company operates in was expected to become a $5.4 billion market. The new products and wellness concepts were to maintain freshness much longer than standard bottling for some of our new releases. It was trying to leverage a trio model of retail, e-commerce, and wine club sales. In addition, allowing members to stay on the property to create a unique marketing experience, niche, and competitive advantage relative to any company in the industry to increase profitability. However, the deal feel through and the purchase cancelled.
Even more recently, ETHG announced that has signed another letter of intent to acquire BioSense Medical, LLC. BioSense is a medical device and healthcare data management company that currently generates millions in revenue through direct sales and marketing operations in the US as well as distribution partnerships globally. BioSense has been investing significantly in the diabetes front and improving the experience of people with diabetes. It is going to leverage technology, real time data, and partnerships with healthcare providers and payers to improve health outcomes for people with diabetes. It has a product that has been cleared by the FDA as well. The focus on diabetes is a huge market and industry valued at $54B in 2012 and expected to grow to $83B in 2019 globally.
ETHG is undergoing a huge transformation and shifting from its original business strategy which has come under intense competitive pressures. It is leveraging its core competencies and capabilities in the IT arena and merging it with healthcare. ETHG new strategy is to focus on mobile and healthcare IT. The acquisition if completed will bring millions in accretive revenues immediately which is much needed given revenues have been on a decline.
ETHG originally focused on the marketing credit card processing services and processing payments on behalf of merchant service providers. The Company generates revenue through fees received from merchant payment processing service providers and the company brokers who provide the service. In addition to marketing credit card processing services, the Company also has developed on-line portals and mobile applications offering directories of professional service providers. ETHG is operating in a highly competitive industry and is only becoming more saturated and obsolete with the advent of Apple Pay, Google Wallet, and other huge industry heavy weights shifting the tides.
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EHGT is currently trading at a $1 million market valuation. The company has been seeking to change its business strategy and leverage its core competencies to enter a new market. The recent LOI with BioSense will be a huge benefit if it closed as it brings in much needed revenues. At a market cap of less than $1M, a acquisition that brings several millions in accretive revenues will likely lead to an appreciation of the stuck price. Be sure to stay tuned for updates.
We will be updating on EHGT when more details emerge so make sure you are subscribed to Microcapspot so you know what’s going on with EHGT.
Disclosure: we hold no position in EHGT either long or short and we have not been compensated for this article.