Accelera Innovations Inc (OTCMKTS:ACNV) Gets Ahead of Itself
About an hour after the end of Monday’s session, Accelera Innovations Inc (OTCMKTS:ACNV) published their third quarter 10-Q and if you’ve seen the trading action over the last couple of days, you’ve probably assumed that the report looks rather great.
Indeed, despite the months upon months of appalling illiquidity, ACNV is now running nicely. The dollar volume over the last two sessions has been particularly decent and yesterday’s close of $0.47 per share means that the total gains since the publishing of the 10-Q now sit at 80%.
“Not bad” you might be thinking. There are one or two things worth bearing in mind, though.
For one, although the volumes weren’t quite as impressive at the beginning, the surge in the right direction actually started before the 10-Q came out. The current value would have been impossible without two impressive jumps at the end of last week which came seemingly out of nowhere and pushed the ticker past the $0.10 and $0.20 per share barriers.
What’s more, the fact that the volumes have been swelling since the publishing of the 10-Q is particularly surprising because the report itself is not really perfect. Here’s a summary:
- cash: $281 thousand
- current assets: $1.1 million
- current liabilities: $6.4 million
- quarterly revenues: $1.2 million
- quarterly net loss: $3.7 million
ACNV‘s management team themselves admit in the 10-Q that the cash reserves are “insufficient”. The working capital deficit is a cause for concern as well and so is an interesting detail around the revenues.
ACNV‘s sales have grown by a rather huge 87% on a year-over-year basis and the 10-Q says that this is due to, among other things, the acquisition of Behavioral Health Care Associates, Ltd. It also says, however, that according to the agreement for the acquisition in question, ACNV was supposed to make a $1 million payment before the end of September. The company failed to make the payment on time and it’s currently in default.
This isn’t the only thing that hasn’t gone quite according to plan. In June, the management team said that they want to up-list the stock to one of the national exchanges before the end of Q3 and they also said that they plan on funding the operations through the issuance of bonds.
We’re now well into Q4 and as you can see, ACNV is still on the OTC. And instead of bonds, on August 28, ACNV issued a convertible note for a maximum borrowing of $250 thousand. At the end of Q3, the principal amount on that note was $55,556 and if it’s still outstanding today, it’s convertible into stock at 60% of the lowest trading price recorded during the last twenty-five sessions. In other words, if it’s still outstanding today, it’s convertible into stock at a 40% discount to the 52-week low of $0.019 per share logged on November 4.
These are all facts you should probably consider if you happen to receive a text message urging you to invest in ACNV like some claim to have. Even if you don’t receive such a message, caution is advisable.
