Dominovas Energy Corp. (OTCMKTS:DNRG) Recovers Some Ground
Dominovas Energy Corp. (OTCMKTS:DNRG) managed another 12.86% spike yesterday, as another boastful press release by the company hit the web.
Said announcement was focused on DNRG‘s hope to secure the support of “select institutions [that] are specifically focused on deploying capital to support further development of power infrastructure projects in sub-Saharan Africa”.
The news was welcome indeed, and probably warranted the spike in activity and price per share that we saw on the charts, as it represents the company’s increase in potential for profit in future. Still – investors would do well to remember that said potential is just that – an opportunity for DRNG to shine. It is yet unclear whether or not DNRG will be up to the task at hand or not.
Judging by the company’s achievements to date, that may not have been the case, but now, with the addition of “former GE Capital veteran Eric Fresh” – who knows?
In any case, potential commercial success is still a long way away for DNRG, and the question of whether or not it’s achievable will be up for debate for some time – so let’s leave it aside for the present moment.
What is not up for debate is the threat that the company’s past choices represent for investor value. Because, as DNRG‘s latest quarterly report can attest, a noteholder named Kodiak Capital Group owns a convertible note for $330 thousand, with provisions for “conversion price for each share equal to the lowest closing bid price for the common stock for the thirty trading days ending on the trading day immediately before the conversion date multiplied by 50% at any time up to [and after] April 28, 2015.”
Some basic math determines that for about two more weeks, Kodiak can convert said debt into DNRG stock at a rate of $0.0022 per share – which could amount to anything up to 150 MILLION NEW SHARES hitting the market at any time, with potentially catastrophic results.
The fact that the ticker has already dipped so low after its initial jump in spite of the good news and ongoing hype suggests that vast amounts of those theoretical shares have already become a reality.
Investors should really keep all those facts in mind.
