Is Drone Aviation Holding Corp. (OTCMKTS:DRNE) Going To Fall From The Sky?
Drone Aviation Holding Corp. (OTCMKTS:DRNE) has been struggling with the market lately, even though the press releases that keep popping up in the company’s newsfeed are always positive.
Receiving a contract to upgrade two Army-Owned WASP Systems to support special DRNE optics was the last good news that made the ticker bounce – but as the charts indicate, the resurgence didn’t last. Why?
Because although working on a project for the Department of Defense is an excellent development, almost no other detail about DRNE could ever be called “Excellent”.
For instance, the company’s financial report for the period ended March 31, 2015 showed the following unimpressive figures:
- cash – $793 thousand
- total current assets – $917 thousand
- total current liabilities – $238 thousand
- revenues – $15 thousand
- net loss – $934 thousand
While not dreadful, those numbers certainly fail to inspire confidence. However, they are not the biggest red flag that the report reveals. Dilution is.
Mid 2014, DRNE had around 12 million shares outstanding. At the beginning of 2015, that number had more than tripled – and approximately 20 million of the newly issued shares were the result of conversions of preferred A shares.
The worst part is that the conversions don’t look like they’re going to stop any time soon – as of May 15, 2015 DRNE had approximately 260 thousand preferred A shares outstanding. Farther, June 2, 2015 DRNE saw the issuance of another 2.7 million preferred E shares and 2.2 million preferred F shares.
And while still on the topic of the company’s share structure, another serious point of concern is the fact that DRNE paid for its latest pump with half a million restricted trading shares. Investors should really take that into consideration.
With so much issuance and dilution shenanigans, is there really any wonder that DRNE‘s stock prices can’t retain a high position on the charts?
