Progressive Care Inc (OTCMKTS:RXMD) Still Surging on PR

After yet another optimistic press release sent Progressive Care Inc (OTCMKTS:RXMD)’s wheels turning, the stock is still ripping it up the charts. On Friday RXMD closed up 23%, clambering to a close at $0.013 per share, on volume slowly cooling off to 28 million shares traded.

The only discernible reason for this new price spike which dragged the stock out of double-zero land is a press release that went up on Nov 17. RXMD announced “strong October sales”. The PR boasts about the 12 million prescriptions filled by Pharmco LLC, an RXMD subsidiary, that represent a 20% increase on a year-over-year basis. October revenues are reported to be “steady”, at “nearly” $1.2 million.

This is all great news but obviously investors are not terribly pleased with the company’s overall performance judging by the charts. The previous time RXMD spiked hard was back in late June, when another super-optimistic PR about May 2015 revenues sent the ticker from double zeroes to four cents per share overnight. This session was followed by a 58% crash and RXMD was back to double zeroes within less than a month.

Here is what the company had on its books as of its latest quarterly for the three months ended September 30, 2015:

• $270 thousand in cash
• $2.0 million in current liabilities
• $3.3 million in Q3 sales
• $160 thousand in Q3 net loss

While the company is generating seven-digit revenues per quarter and its losses are relatively modest, the primary red flag with RXMD is dilution. The company entered into a settlement agreement with Tarpon Bay Partners LLC under which RXMD needs to issue approximately $2.4 million worth of settlement and fee shares to Tarpon. This process has been ongoing, with RXMD diluting its common stock over 100% within three months, with the vast majority of those new shares issued in tranches to Tarpon.

As of June 2015 RXMD had 105 million outstanding common shares. As of September the figure was up at 225 million OS.