Millennium Healthcare Inc (OTCMTKS:MHCC) Wipes Its Gains
On July 10 Millennium Healthcare Inc (OTCMKTS:MHCC) dropped below a cent and hit a new 52-week low of $0.009. For the next three sessions however the ticker managed to form a rather impressive recovery and on July 15 it reached a high of $0.165. All it took was just 1 day though and all of those gains got obliterated.
During yesterday’s session MHCC got devastated and by the time of the closing bell the stock had slashed more than a quarter of its value. Dropping to $0.0111 per share the loss for the day stood at exactly 26%. More than 13 million shares got traded while the monthly average for the ticker is 3.7 million shares.
In our articles we warned you that MHCC is definitely a risky play. Despite the fact that the company is generating respectable revenues its financial state is nothing short of depressing. The latest quarterly report showed that at the end of March MHCC had:
• $21,811 cash
• $5.8 million total current assets
• $9.7 million total current liabilities
• $678 thousand revenues
• $2.3 million net loss
The dilution of the common stock makes the picture even worse. The outstanding shares of the company grew by more than three times since the start of 2014 – from 63 million to 193 million shares, as of May 20, 2015. Investors should expect even more shares to see the light of day because MHCC has agreed to exchange warrants for the purchase of 3,560,000 common shares for 237,200,000 common shares. The authorized shares got increased from 200 million to 350 million.
The company has been making changes and the new CEO plans to transform MHCC into a technology-based company. The first steps toward this goal were taken with the acquisition of HealthPath LLC earlier this month. This acquisition is expected to result in a 20% increase in gross revenues on an annual basis.
For now, however, the red flags around the stock are far too serious to be underestimated and could continue to influence the performance of the ticker negatively. If you are determined to trade the stock be sure to do your own due diligence before committing to anything.
