In Ovation Hldgs In (OTCMKTS:INOH) Headed Down

In Ovation Hldgs In (OTCMKTS:INOH) made an impressive jump 9 days ago, managing to rise 265% in the span of a single session. Sadly, the ticker’s ascent was only possible due to a paid pump, and now the company is headed back down, hard.

The pumpers Haywire Viral Marketing and Penny Stock Whispers really did a good job of promoting INOH stock, despite being paid only a meager $3 thousand in compensation. However, pump high doesn’t last, especially when the pumped company’s latest financial report reveals numbers such as these:

• Cash & total current assets – $215
• Current liabilities – $1.7 million
• $0 REVENUES SINCE INCEPTION
• Net loss for the quarter ended March 31, 2014 – $73 thousand

Unimpressive results to say the least, and that’s just scratching the surface. It turns out that during the fourth quarter of 2013, INOH has converted an undisclosed amount of debt at an unknown rate. The results are clear for all to see – 850 million shares of common stock have been issued in that period. This practice has been continued in 2014, with the issuance of another 68 million shares during the first quarter.

As the company’s financial reports can testify, INOH doesn’t have enough money on hand to fund its projects without issuing shares. This particular strategy for acquiring funds is not that uncommon among OTC Pink companies, but still – investors should probably keep in mind that INOH currently has 4.9 BILLION SHARES AUTHORIZED. This means that, if it wanted to, INOH could DROWN its investors in toxic dilution – and, judging from its history, the chance that it will do so is significant.

So let’s recap. Paid pump – check. Pinksheets company with little or no assets in the company’s reports – check. Dubious claims that the company has completed a product, while obviously having insufficient funds to complete ANY kind of research, let alone medical testing – check. Toxic funding and alarming levels of dilution, supplemented by a staggering total of shares authorized – triple check.

Under these circumstances, is it really any wonder that INOH is currently headed down as hard as it is, and would it really surprise anyone if it continued its nose dive?

Another OTC company that registered a significant drop yesterday was VOIP-PAL.COM INC. (OTCMKTS:VPLM), who dropped 10.04% after a day of fevered trading.