Provision Holding Inc. (OTCMKTS:PVHO) Slumps Further Down
Provision Holding Inc. (OTCMKTS:PVHO) lost another 5% yesterday, finishing the trading session as low as $0.27 – which should have surprised no one.
As we have mentioned on multiple occasions in the past, PVHO is one of the tickers that moves on hype more than anything else. The last couple of times in which it has managed to surge, its ascent was entirely due to the attention one of its optimistic press releases drew. However, as we well know, PR induced hype can rarely keep the ticker up for very long.
Sooner or later the market returns to judging the company in question based on its actual achievements to date, rather than its claims and boasts, and things take a more realistic turn. Unfortunately for PVHO, a more realistic turn seems to mean that either a violent crash or a slow decay of its market cap is all but inevitable. Why?
Well, to start off, quick glance at the company’s latest financial report reveals an unimpressive picture:
- cash – $2.01 million
- current assets – $3.97 million
- current liabilities – $7.97 million
- quarterly revenues – $2.02 million
- quarterly net loss – $913 thousand
Yes, PVHO seems to have cash on hand, and some revenues to boot, which is more than most companies in the branch can boast. However, the fact that the company actually has something to its name is overshadowed by another detail that sticks out of the financial sheets like a sore thumb.
The sum that the company has given under “current liabilities” is quite large, even by the OTC Markets’ lax standards. That is largely because in order to actually get its hands on the very assets that differentiate it from most of its competitors, PVHO has had to issue over $3.6 million worth of notes during the nine months ended March 2016.
These notes have provisions allowing their owners to transform the debt into shares of PVHO common stock at rates of $0.1 per share, and are complemented by a bunch of warrants that allow their owners to get a hold of shares of the company’s common stock at a fixed price of $0.15.
So, on one hand PVHO is making revenues and claims to have “sufficient cash to operate for the next 12 months”, but on the other said money came at the cost of threatening investor value with huge amounts of toxic debt. Naturally, it is up to investors to decide whether or not investing in PVHO is a good idea, but it is wholeheartedly advised that they take all the red flags that research on the company has to offer into consideration before making up their mind.
