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Environmental Tectonics Corporation (OTC ETCC) Stock Continues to Trade Lower

Scott Birndorf

As the investors return to the markets after Thanksgiving, there are going to be certain stocks that are going to be in focus, and one of those could be the Environmental Tectonics Corporation (OTC ETCC) stock. Following a significant new announcement this Wednesday, the stock could be in focus today.

Key Transaction Closed

Environmental Technology announced on November 27 that it had been successful in completing a transaction for the sale and leaseback of the demonstration equipment in Southampton, Pennsylvania. As per the provisions of the agreement, the equipment had been sold for the sum of $4,000,000.

Key Information

Concurrently with the sale, the company also signed an agreement with VFI Corporate Finance to lease back all the assets that had been sold. In the news release, it was revealed that the assets had been leased back to Environmental Tectonics for a period of thirty months. The net rent expense would be $1,750,000 for the entire period, the company revealed.

The depreciation expenses on the assets that Environmental Tectonics sold stood at $780,000 on an annual basis. The proceeds generated from the sale were already being used by the company for working capital purposes so as to work on the backlog of existing projects worth around $100 million.