Wellness Center USA Inc (OTCMKTS:WCUI) Stock Takes a Hit On Low Volume: Now What?
Wellness Center USA Inc (OTCMKTS:WCUI) stock was in focus as the stock ended lower on Thursday after the recent consolidation.
Market Action
In the previous trading session, WCUI fell 16% to $0.0386. A total of 302 shares traded for the session hands, well above its average volume of 52k shares. The stock opened at $0.0386 and moved in a range of $0.0386 – 0.0386.
Key Trigger
WELLNESS CENTER USA : MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)
In December 2018, PSI entered into a Joint Venture Agreement with GEN2 for further development, marketing, licensing and/or sale of PSI technology and products. Pursuant to the Joint Venture Agreement, the venture will be conducted through NEO Phototherapy, Inc. (“NEO”). PSI and GEN2 will be the members of NEO, owning 50.5% and 36.0%, respectively, of the Units issued in connection with the organization of NEO. An additional 13.5% of such Units will be reserved for issuance as incentives for key employees and consultants. As of September 30, 2020, GEN2 had received $975,000 of investments to contribute to NEO. As of April 30, 2020, the Company controlled 51% of the joint venture, GEN2 controlled 39% and another individual controlled the remaining 10%.
Effective April 30, 2020, the joint venture with GEN2 was reorganized. GEN2 shareholders exchanged their common shares in GEN2, and the individual exchanged his membership interests in NEO, for common shares representing 49% ownership in PSI. The Company retained its common shares in PSI, which provides the Company a 51% economic interest in the PSI technology and products developed by the joint venture. During three and nine months ended June 30, 2021, PSI recorded a loss of $168,350 and $506,860, respectively, relating to its operations, of which $82,491 and $248,361, respectively, was allocated to the non-controlling interest.
Trader Notes:
WCUI stock has underperformed this year with a fall of over 37%. On the technical basis, the stock is trading below its 50-day and 20-Day SMA stand at $0.0.547 and $0.0516 respectively. Moreover, RSI at 36 signals that the stock is trading near the oversold zone.
