ITonis Inc (OTCMKTS:ITNS) Gets a $400K Pump

0ITNS.pngIf you open ITonis Inc (OTCMKTS:ITNS)’s latest financial report and scroll down to the Loan Payable section (Note 5 on Page 22), you’ll see that last year, the company received $114,454 in short-term loans from a few unnamed parties. You’ll also see that during the quarter ended February 28, 2014, ITNS converted $31,500 of these loans into 106,333,333 shares of common stock.

Yesterday, ITNS got pumped by Stock Freak (who disclosed a $400 thousand compensation) and as a result, the ticker managed to shift nearly 48 million shares.

Is there a connection between the promotion and the conversion of debt? We’ll probably never know.

The truth is, people don’t seem too bothered about the pump. The ticker’s performance yesterday wasn’t exactly consistent, but it did close the session almost 30% above its previous value. ITNS is now comfortably above the $0.01 per share barrier and it seems like it has enough steam to push even further up.

The company issued a press release after Monday’s closing bell which further boosted the effects of the promotional campaign. ITNS said that the FDA have given their final approval for the Emesyl® homeopathic product for nausea relief. Apparently, all ITNS need to do now is come up with the final packaging design and put it into production. That is a major milestone for the company and it should mean that the future financial statements will finally contain some figures in the revenues section.

Investors know that and they are understandably excited about the developments. There are, however, a few things that need to be considered carefully.

If you’ve been following our articles closely, you’ll know that INTS‘ financial statements have never really been that good and unfortunately, the latest one is no exception to the rule. Here are the figures as recorded on February 28:

  • cash: $232
  • current assets: $46 thousand
  • current liabilities: $321 thousand
  • quarterly net loss: $819 thousand
  • accumulated deficit: $8 million

It’s blindingly obvious that if the Emesyl® treatment is to see the light of day, ITNS will need to raise some serious amounts of cash. Will they be able to do it?

Hopefully, they will be, but while we’re waiting to see what happens next, we might as well touch upon one more thing that investors need to bear in mind.

As you can see from the first paragraph, ITNS have converted some debt into common stock at an alarmingly discounted rate (less than $0.0003 per share). You can check out our previous articles and you’ll see that this is not the first time a similar 74MDNT.pngthing has happened. If they continue to do it, the dilution could put some serious pressure on the price. At the same time, if a large amount of converted stock hits the open market, the subsequent drop will most likely be hard to swallow.

Medient Studios Inc (OTCMKTS:MDNT)’s shareholders (whose stock lost a further 35% yesterday) know exactly what we’re talking about.

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