BIONOVELUS INC COM USD0.001 (OTCMKTS:ONOV) Climbs Higher Up The Chart
At the start of the month the stock of BioNovelus, Inc. (OTCMKTS:ONOV) was a sitting just over a cent and half per share. Since then, however, the company has been soaring up the chart forming a truly amazing uptrend. The positive momentum has been so strong that out of the 13 sessions so far in June the stock has registered only 3 ending in the red.
Last Friday ONOV finished the trading day with a gain of nearly 20% at $0.153 per share. While for the most part the stock’s upwards move seems to have been lacking any immediately obvious reason this time the enthusiasms showed by investors had a concrete catalyst – the company issued a new PR early in the morning before the start of the session. Apparently ONOV have decided to try to improve their credibility by taking the necessary steps towards becoming a fully reporting company and they even stated that they could try to uplist their shares to more visible marketplaces.
Leaving behind the alternate reporting standard is definitely a step in the right direction because until now the financial reports of the company have contained the bare minimum and have lacked information that is of vital importance when deciding whether to put any money into the stock or not. For example, the latest quarterly report fails to give any concrete details about the terms of ONOV‘s outstanding convertible notes. The report simply states that as of March 31, 2016, the company had a total of $154,845 in convertible notes with “various due dates in 2016”. Investors should keep in mind that last year 13.2 million shares were already issued through the conversion of notes.
The positive effects of becoming a fully reporting company may not be that great, though, if the balance sheet remains so utterly depressing. BioNovelus finished the first quarter of the year with:
• $4 cash and total current assets
• $681 thousand total current liabilities
• ZERO revenue
• $25 thousand net loss
At the current share price ONOV command a market cap of more than $12 million, valuation that is grossly disconnected from the underlying fundamentals of the company.
In order to move forward with their plans ONOV will have to most likely raise additional funds from outside sources, which could lead to even more convertible debt being added to the balance sheet. Even if you are excited about the potential of the company’s bio-fungicide CR-10 that is being tested in Costa Rica you shouldn’t take the red flags lightly. Do your own due diligence and adjust your trades accordingly.
