Progressive Care Inc (OTCMKTS:RXMD) Makes a Positive Announcement
Progressive Care Inc (OTCMKTS:RXMD) shot 35% up yesterday and it reached a price of $0.0076 on a dollar volume of more than $180 thousand. Why did it do that?
An entity called Biotech Stocks tried to link the surge to all sorts of things that have absolutely nothing to do with it like the oil price and the Democratic debate that took place yesterday. As you might have guessed already RXMD‘s spike wasn’t caused by the price of oil and it certainly wasn’t triggered by any presidential debates.
It’s simply the result of a press release that the company issued about an hour and a half before the opening bell. With it, the management team proudly announced that the revenues during Q3 of this year stand at $3.3 million which pushes the company closer to the goal of 2015 annual sales of $10 million. Perhaps more importantly, the company announced that it has managed to achieve positive cash flow and operating profitability during the last three months.
If you take a look at the latest report, you’ll see that this is indeed good news. Here’s why:
- cash: $366 thousand
- current assets: $1.2 million
- current liabilities: $3 million
- quarterly revenues: $3.3 million
- quarterly net loss: $365 thousand
You can see that revenue-wise, the jump is all but non-existent, but if RXMD really manages to reach a positive bottom line, it will certainly be taken more seriously. Not to mention the fact that the profits might help them tidy up the balance sheet a little bit.
The thing is, it’s all just a press release for the time being and the last time RXMD ran because of a press release, the people who got a bit carried away ended up in a world of pain. At the end of June, the company announced record revenues for the month of May and investors immediately reacted by pushing the ticker from $0.005 all the way to more than $0.04 per share. On the very next day, however, the stock suffered a nasty crash and it very quickly came back down in sub-penny land. The inconsistent performance is not the only problem.
Over the years, RXMD has had some serious problems paying off its debt. Last year, quite a few of the notes were consolidated and acquired by an entity called Tarpon Bay Partners LLC, and after a settlement agreement which was approved by the Court, RXMD agreed to satisfy the past due obligations with the issuance of stock. This has had an absolutely devastating effect on the share structure.
The number of issued and outstanding shares grew from 41 million at the end of last year all the way to 105 million on June 30. By September 16, however, it had ballooned to a whopping 225 million.
The management team said last month that they are getting closer and closer to making the company completely debt-free. Hopefully, they are right because the dilution has already caused quite a lot of damage. And it mustn’t be ignored.
About thirty-five minutes after the opening bell, RXMD is sitting at $0.007 (8% in the red).
