Progressive Care Inc. (OTCMKTS:RXMD) Sinks Like A Stone
Progressive Care Inc. (OTCMKTS:RXMD) had an explosive run last Thursday, but by the time Friday had rolled along, the magic was gone and the ticker crashed catastrophically.
The jump was only made possible by a positive announcement, that got investors all jumpy with hype by showing them big revenue numbers. What it did not mention is how said revenue translates into profit.
Because, at the end of the day, this is not the first quarter to see RXMD make significant revenues over $2 million, but still, RXMD is yet to turn profitable:
- Cash – $127 thousand
- Total Current Assets – 788 thousand
- Total Current Liabilities – $2.7 million
- Net Sales – $3.1 million
- Net Loss – $294 thousand
Long story short – in spite of creating hype, the press release told investors very little actual meaningful information. The company’s latest financial report, on the other hand gives plenty of clues as to the nature of RXMD.
The $1.6 million given under “notes payable”, for instance is a big tip-off of the company’s dubious nature. True, the fact that most of said notes don’t seem to carry toxic provisions is certainly a plus. However, convertible notes can seriously harm investor value just by diluting a company’s stock, even without being toxic.
And, as a bit of due diligence reveals, dilution has been plaguing RXMD for a long time:
- As of December 31, 2013 RXMD had 28 million shares of common stock
- As of December 31, 2014 RXMD had 41 million shares of common stock
- As of March 31, 2015, RXMD had 65 million shares of common stock
It is difficult to say whether or not dumping of debt converted into shares has been the cause of this latest crash. The fact that the ticker has been mostly inert until just two sessions ago must not be ignored as a factor in this development – after all, note holders that don’t want to be stuck with illiquid stock would have definitely considered selling it.
Alternatively, the ticker may have stumbled because the hype carrying it up was spent – which is only natural for a hyped up ticker that has nothing else going for it.
In either case, investors should stop to carefully examine recent developments and really think twice about RXMD‘s current situation if they wish to have anything at all to do with the company.
Another company that managed to rise on news last week, only to fall flat on its face during Friday’s session is Dominovas Energy Corp. (OTCMKTS:DNRG).
