Dominovas Energy Corp (OTCMKTS:DNRG) Has Some More Good News

Dominovas Energy Corp (OTCMKTS:DNRG)’s problems have never really been related to the Rubikon technology. They have been at it for a while and they’ve managed to convince quite a few people that they’re onto something.

Investors also became believers when they heard that DNRG has been named as a partner in President Obama’s Power Africa initiative. The news made the shareholder base grow immensely and it also solidified it significantly.

It didn’t solve the issues related to the balance sheet and the convertible debt, however, which is why the stock struggled to stay on the straight and narrow. But is this about to change?

Well, by the looks of things, the financial statement shouldn’t be a problem any more. Last week DNRG announced that they have secured a massive $1.2 billion financing commitment for the manufacturing and development of their clever solid oxide fuel cells. That’s a lot of money and DNRG have no intention of wasting any time. Earlier today, just seven days after announcing the financing commitment, they said that they, along with their partners from AVL List GmbH, have completed some design work on the fuel cells.

Despite the good news, the stock still refuses to show any sort of consistency. Today, for example, the ticker opened the session with a gap up thanks to the press release, but it started hesitating almost immediately and about fifteen minutes after the opening bell, it’s sitting at $0.072 – exactly the same price as yesterday’s close. A similar thing happened when DNRG announced the huge financing commitment. A green close was reached, but over the following days, the ticker lost quite a lot of ground and it also showcased some less-than-impressive volumes.

The reason for this might lie with the fact that while the $1.2 billion financing will give the commercialization process a boost, it won’t help DNRG pay off its toxic debt. The problems on that front are very serious and they’ve already affected the share structure quite badly.

We’ve talked at some considerable length about the Kodiak Capital note which is convertible into shares at a 50% discount and we’ve also mentioned the fact that instead of staying away from the toxic financing providers, DNRG issued some more notes with similar terms during the first half of the year.

As a result, the stock went through quite a lot of dilution and unfortunately, the majority of the newly printed shares saw the light of day at a massive discount. Here’s an example – during the period between May 31 and July 22, the company issued 32,598,586 shares at just $0.0018 apiece. The O/S count grew from around 93 million in May all the way to more than 171 million in September and the recent increase in the authorized cap suggests that the share printing isn’t over just yet.

In light of this, the shaky performance shouldn’t really be too much of a surprise.

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