Thinspace Technology Inc (OTCMKTS:THNS) Falls Down
At the start of yesterday’s trading the stock of Thinspace Technology Inc (OTCMKTS:THNS) continued to climb up the chart soaring to a high of $0.0019 per share. However, such prices proved to be unsustainable and the ticker fell back down almost immediately. By the time of the closing bell the stock was sitting at $0.0012, for a loss of 7.7%. Will the company managed to avoid dropping back to the triple zeroes, though?
Yesterday THNS did publish a new press release announcing positive results from an independent product test. The news was indeed encouraging but it alone won’t be enough to offset the massive red flags that surround THNS.
Let’s start with the fact that the only reason for the surge displayed by the stock of the company was a paid pump carried out by the newsletter the Wolf of Wall Street for a disclosed compensation of $42 thousand. Without the artificial hype of the promotion THNS may have continued to drift sideways on minimal daily volumes and almost no attention from the market.
There is a plethora of reasons that could explain the stock’s inability to move upwards on its own. The profile page of the company on OTCMarkets carries the Caveat Emptor skull and crossbones mark and this alone should be enough to make it abundantly clear just how dangerous the stock really is. Not to mention the lack of any current information about the company’s financials. Due to THNS deciding not to file its report for the third quarter of 2015, the annual report for 2015, and the quarterly for the first three months of 2016 our only choice is to rely on data that is almost a year old. At the end of June 30, 2015, THNS were in an abysmal state with:
• $94 thousand cash
• $285 thousand total current assets
• $41.7 million total current liabilities
• $333 thousand revenues
• $31.3 million net loss
The company had numerous convertible notes outstanding at the time that could be converted into common shares at sizable discounts ranging from 30% to 60%. And this is exactly what their holders have been doing – in July, last year, 92.7 million shares were issued through conversions while in August another 58.5 million saw the light of day. By February 16, 2016, THNS had almost no room left for the further issuance of shares with 494 million outstanding shares out of the 500 million authorized. How did the company resolve the situation? – It simply increased the authorized amount to 3.5 BILLION shares.
If the momentum behind the stock is starting to wane THNS could quickly find themselves dropping all the way down to their previous prices. Furthermore, if the trade volumes dry up many investors risk getting stuck in a highly illiquid penny stock.
