Millennium Healthcare Inc (OTCMKTS:MHCC) Shuffles Up After a Shareholder Update
Yesterday, Dominick Sartorio, Millennium Healthcare Inc (OTCMKTS:MHCC)’s CEO, decided to update investors on what’s been going on with his company and he said that he’s pretty happy with the things that have happened over the last few months. He said that interest in the stock is now stronger than ever, he announced that in terms of revenues, 2014 was a great year, and he promised the shareholders that things will be even brighter in the future.
The update came just hours after Small Cap Crowd and a few other newsletters started touting the stock through the emails, and, thanks to the combined efforts of Mr. Sartorio and the pumpers, MHCC went through a rather interesting session.
More than 4.2 million shares changed hands in a matter of six and a half hours which means that the dollar volume at the end of the day stood at more than $210 thousand. At the same time, the ticker gained a respectable 13% and finished the session at $0.054 per share.
So, investors are quite excited about what they heard from the company CEO and from the pumpers. A few problems, however, weren’t touched upon in the emails and the shareholder update, and we reckon that considering them might not be such a bad call.
The stock performance, for one, is nothing short of a nightmare. About a year ago, the ticker was hovering around $0.80 per share. Last week, it bottomed out at just over $0.02. In other words, in a matter of less than twelve months, MHCC‘s share price shrunk by almost 97%.
The 2014 10-K has some problems of its own. Here are the figures:
- cash: $112 thousand
- current assets: $6 million
- current liabilities: $8.9 million
- yearly revenues: $8.3 million
- yearly net loss: $24.5 million
Indeed, the revenues have grown by a massive 319% on a year-over-year basis and Mr. Sartorio promised that they will be even bigger in the very near future. He said that the company couldn’t recognize about $9.65 million worth of purchase orders during Q4 of last year because of insufficient inventory, but he said that those revenues should be in the books before the end of 2015.
Unfortunately, the rest of the statement is pretty underwhelming. The net loss in particular is downright scary.
Then, of course, there’s the matter of dilution. The number of issued and outstanding shares grew from around 63 million at the end of 2013 all the way to 128 million in December 2014. It’s now sitting at more than 134 million. Stock has been printed for a variety of reasons, but, peculiarly enough, MHCC‘s management team don’t seem too keen on telling investors how they value the newly issued shares.
An 8-K form from Wednesday, however, tells us that a few unnamed warrant holders have agreed to cancel 3,560,000 warrants in exchange for 237,200,000 shares of common stock. Some of the warrant holders are limited to owning no more than 4.99% of MHCC‘s stock which means that they may have to receive some shares, sell them, and then receive some more shares.
We’ll leave it up to you to decide what you should make of this, but in the meantime, bear in mind that, as the same exact 8-K form tells us, the number of authorized shares has been increased to 350,000,000.
