Healthnostics (OTCMKTS:HNSS) Gets A Black Eye

Healthnostics (OTCMKTS:HNSS) lost 21.43% yesterday, in spite of the obvious lack of developments around the company.

Three weeks ago, the ticker shot up for no apparent reason. It had no pumps, no fresh PR, no new reports – nothing that would explain a sudden burst of investor enthusiasm about it at all.
Suffice it to say that the current sudden drop is as mysterious as HNSS‘s abrupt climb – it just doesn’t seem to have an obvious cause.

Still, it would probably be safe to assume that the ticker couldn’t maintain its elevated position up the charts because of the company’s mediocre results. After all, HNSS‘s report for the period ended June 30, 2015 looks like this:

  • cash – $1 thousand
  • current assets – $294 thousand
  • current liabilities – $217 thousand
  • quarterly revenues – $20 thousand
  • quarterly net income – $5 thousand

While HNSS isn’t drowning in debt and isn’t racking up tons upon tons of net loss like many other companies in the same branch, the amount of cash it had on hand at the end of the reported period can only be called pitiful. And that isn’t even the company’s biggest red flag.

Want to know what IS HNSS‘s biggest fault? It is its over-fondness of dilution.

A quick check reveals that the company performed a 1 for 200 reverse split on May 20, 2015. Since HNSS is a pinksheets company that is not too keen of filing, it is impossible to know exactly what happened back then and what has happened since, but its current SO has hit critical mass once more at 775 MILLION, out of 950 million authorized.

While many dubious OTC Markets pinksheets companies are forced to make reverse splits in order to remain liquid, very few are as obnoxious as to perform a 1 for 1200 reverse split, then issue so many shares to be forced to perform another 1 for 200 reverse split, then issue so many shares as to almost reach its SA – all in the span of less than two years.

This being the case, it’s no wonder that the ticker is losing altitude – and it will not be surprising to see it drop to triple zeros in the near future.

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