OncoVista Innovative Therapies Inc (OTCMKTS:OVIT) With Another Strange Session

If you’ve been around penny stocks for a while, you’ve witnessed many strange and exciting things. On Friday, you saw another one – OncoVista Innovative Therapies Inc (OTCMKTS:OVIT)’s performance.

On the face of it, there’s nothing too odd about it. After Thursday’s closing bell, the company dropped some news (which we’ll touch upon in a minute) and during the next session, the ticker gained a respectable 24%. Once you take a closer look, however, you’ll see that the majority of Friday’s trading took place during the last hour of the session. You’ll also see that OVIT stood at well over $1 per share mere minutes before the closing bell, yet it ended the week with a price of just $0.62.

The behavior, especially towards the end of the session was quite erratic, and the wild swings can not be explained easily. All we can do at this point, in fact, is have a look at the company’s overall state and see if there’s anything to suggest that the future performance will be a bit more consistent.

Let’s start with Thursday’s press release which, it must be said, isn’t particularly informative. Apparently, OVIT have reached a settlement agreement on a lawsuit in the New York Supreme Court. The management team gave us no details whatsoever, but they did promise that the deal is favorable and they also said that, now that they have overcome this hurdle, they will be able to work on increasing shareholder value. They better get to it.

OVIT first initiated Phase I/II trials of their Cordycepin in 2008. Just a year later, however, they were forced to put them on hold due to lack of capital resources. In their 2011 10-K, they said that they’re in the process of reinitiating the trials and they stated that they expect to start enrolling patients in 2012. This, however, didn’t happen. The deadline was postponed a few more times and if the latest 10-Q is anything to go by, enrollment should start before the end of this year. This might be a tall order considering the shocking balance sheet, though.

Here’s what OVIT had at the end of the first quarter:

• total assets: $65,030 in cash
• current liabilities: $5,296,679
• NO revenue
• quarterly net loss: $277,489

The management team said both in the 10-Q and in Thursday’s press release that they will focus on raising some money. They might just succeed, but you mustn’t forget that they’ve been trying to do just that for the better part of seven years now and the dismal cash reserves at the end of Q1 clearly show that their efforts have so far led to nothing.

In light of this, and all the other facts, you should decide for yourself whether pouring your own hard-earned cash into the stock really is worth the risk.