IntelliCell Biosciences (OTCMKTS:SVFC) Aims for $0.01
In just six and a half hours of trading, IntelliCell Biosciences (OTCMKTS:SVFC) managed to rack up a dollar volume of around $1.64 million. That’s a lot for a double zero stock. Speaking of which, if the trend continues, SVFC might be out of the sub-penny levels very soon.
It opened yesterday’s session at $0.0072 per share (around 7% above Friday’s close) and started running towards the higher end of the charts almost immediately. The climb was remarkably consistent and around 2PM, SVFC reached its intraday high of $0.01. It slipped just a few minutes before the closing bell and finished the day at $0.0099, but it still managed to register a healthy 47% in gains.
A remarkable start of the week, but, perhaps more impressively, it doesn’t seem to be the result of anything immediately obvious. The 2013 annual report is still not out, the latest press release came out a month ago and there aren’t even any stock promotions running for SVFC.
Investor forums seem to be confused as well. Rumors around the potential cause for yesterday’s run are plentiful, but unfortunately, there’s nothing concrete.
In any case, the climb is a fact and SVFC is now aiming for levels it hasn’t visited in more than four months. The question on everyone’s mind is: “Will it manage to hold on to the current valuation?“.
Just a few minutes of research are enough to see that there could be a few potential problems. According to the SEC filings, there were around 1.37 billion shares issued and outstanding which means that the current market cap hovers above $13 million. That might be a bit of a stretch for a company that has the following figures in its latest 10-Q:
- cash: $0
- current assets: $182 thousand
- current liabilities: $10.5 million
- quarterly revenue: $0
- quarterly net loss: $1.8 million
- accumulated deficit: $44.5 million
$13 million also sounds like too much for a company that is putting so much pressure on the share structure. The number of issued and outstanding SVFC shares grew from 140 million on September 25 to a whopping 316 million on November 21 and it has more than quadrupled since then. There are some things to suggest that the stock issuance is far from over. Since the publishing of the report, the board of directors has approved two amendments to the articles of incorporation. This means that the number of authorized shares has grown from 500 million to 3.5 billion in just over six months.
If you have a look through the rest of the financial statements, you’ll see that there are plenty of notes waiting to be converted into common stock and, to top it all off, the company is involved in some legal issues. Of course, at the end of January, they announced that there was a favorable ruling in the case against Ironridge Global IV and TCA Global Credit Master Fund, but, considering the fact that just two weeks later, they decided to raise the A/S count again, there might be some more issues.
That’s why, although the hype seems strong and although the market sentiment appears to be quite positive, you should be extremely careful while considering the risks of a potential investment.
Bitcoin Shop Inc (OTCMKTS:BTCS) is another OTC ticker that enjoyed some healthy gains yesterday. After almost a month of constant falling, it managed to bounce back and finished the first session of the week with an impressive 57% in gains. Marani Brands, Inc. (OTCMKTS:MRIB) also logged a 49% jump after the company CEO, Margrit Eyraud, promised everyone that revenues should be seen in the report for the first quarter of 2014.
