Should You Be Wary Of Dominovas Energy Corp. (OTCMKTS:DNRG)?

Dominovas Energy Corp. (OTCMKTS:DNRG) took another beating in last Thursday’s trading session, in spite of all the good news surrounding it.

And, suffice it to say that the news that propelled it up the charts a couple of sessions ago was impressive indeed. Its alleged multi-megawatt agreements with the US government for the project in the Democratic Republic of Congo is to bring more than $100 million in “guaranteed revenues”.

The announcement in and of itself was boastful and optimistic, however, there’s just one problem about this turn of events.

It looks like the success that DNRG‘s supporters are getting hyped up about rather depends on the company’s ability to rise up to the challenge of a massed operation. Judging by the pitiful financials it has shown to date, DNRG doesn’t seem to be able to rise up to much of anything.

Still – that’s an issue for the far future. A more immediate problem is the fact that one of DNRG‘s note holder – Kodiak Capital Group in particular – can dump $330 thousand worth of stock on the market at will. The frightening part about it is that said debt converts into common stock at a rate of $0.0022 per share – and there’s a very good reason to believe that some of it has already made its way to the market. Or that it will do so in the next few days, while the tremendous discount is most toxic.

Long term investors and opportunistic traders alike should seriously consider those facts before making a move on DNRG stock.