Redux Holdings Inc (OTCMKTS:RDXH) Pumped Out of Obscurity

Redux Holdings Inc (OTCMKTS:RDXH) have been making some pretty positive announcements lately. About a month ago, for example, they said that they have engaged an auditor who is supposed to help them file a Form 10 with the SEC and up-list the ticker to the OTCQB tier. A conference call was also held in which the company CEO, Alexander Woods-Leo, talked about some of the recent developments from an operations perspective.

All in all, the news was good. Sadly, nobody seemed to care. The volumes were as good as gone and the price was going nowhere. As soon as the pumpers came along, however, investors became interested. Winston Small Cap, OTC Magic, and Damn Good Penny Picks as well as their respective sister newsletters pocketed a grand total of $68,500 and they sent out no less than nine emails before the start of yesterday’s session.

Thanks to all the touting RDXH opened the day with a massive gap up at $0.105 per share and a few minutes later it even managed to break through the $0.11 mark. It looked like the ticker was in for a huge green close, but then, it lost its footing and started sliding. The closing bell stopped the fall at $0.087 per share which is only 4% above the value at the end of Tuesday’s session.

The performance was not exactly stellar, but the dollar volume of $175 thousand shows that the pumpers succeeded where the company, with its optimistic press releases, failed. Time to see why that happened and whether the volumes can remain significant for the long run.

It’s not difficult to see why investors were reluctant to put their money on the line before the pump. In fact all you need to do to find out what was putting them off is open the latest financial statement. It looks like this:

• NO cash or current assets
• current liabilities: $30 thousand
• NO revenue
• quarterly net loss: $20 thousand

It must be said that if the press releases are anything to go by, the statement should look a lot better in the very near future. RDXH announced recently that Southridge Partners have agreed to invest up to $3.5 million in the company. This, the management team said, is dependent on RDXH being a fully reporting company which is why the Form 10 is being prepared.

Then again, back in April, they said that thanks to a contract, they will be able to generate as much as $30 thousand in revenues on a week by week basis. And that didn’t really work, did it?

Back then, the people at RDXH‘s helm were also talking about up-listing the stock, but the process seems to be taking quite a lot of time. That’s not good news for the potential investors because RDXH‘s current financial reports aren’t too informative. The latest one, for example, says that during the first half of 2015, the company issued around 8.7 million shares, but it doesn’t disclose the reason for the issuance or the recipient of the shares.

It also says that there’s a $10 thousand convertible note outstanding, but it doesn’t disclose the conversion rate.