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Thursday, December 3, 2020

The Two Forces at Work for Rennova Health Inc (OTCMKTS:RNVA)

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Rennova Health Inc (OTCMKTS:RNVA) shares have been on a bit of a roller coaster ride in recent action, with strong growth potential on advertisement in the company’s materials, but a tinge of potential dilution on the way keeping the lid on things. To that end, the company just announced the postponement of its Special Meeting of Stockholders to May 2, 2018, at 11:00 a.m. EST. From the notes in the release, it would appear as though this is essentially about an increase in dilutive capability for the company.

CEO Lagan said, “2017 was a mixture of addressing the remaining challenges from the downturn in the Company’s core diagnostic business over the previous two or three years and launching the business in the rural hospital sector where the opportunity for growth is significant. We believe this success combined with our plans to separate our technology into a separate public company will deliver increased value for our shareholders throughout 2018 and beyond”.

Rennova Health Inc (OTCMKTS: RNVA) promulgates itself as a vertically integrated Public Company that provides industry-leading Diagnostics and supportive software solutions to healthcare providers. The company, together with its subsidiaries, provides a suite of healthcare related products and services to healthcare providers in the United States.

The company operates in three segments: Laboratory Services, Supportive Software Solutions, and Decision Support and Informatics Operations. It provides toxicology, clinical pharmacogenetics, and esoteric testing services.

The company also offers Advantage, a HIPAA compliant software; Clinlab, a Windows-based Web-enabled laboratory information management system; and Medical Mime, a suite of solutions, which include an optimized Electronic health records (EHR) for substance abuse and behavioral health providers, a dictation-based ambulatory EHR for physician practices, and advanced transcription services. In addition, it develops and markets interpretation and decision support solutions that enhance cancer diagnoses and treatment through actionable data analytics and reporting for oncologists and their patients. Rennova Health, Inc. was founded in 2005 and is headquartered in West Palm Beach, Florida.

According to company materials, “Rennova provides industry-leading diagnostics and supportive software solutions to healthcare providers, delivering an efficient, effective patient experience and superior clinical outcomes. Through an ever-expanding group of strategic brands that work in unison to empower customers, we are creating the next generation of healthcare.”

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As noted above, shares of the stock have been bouncing back and forth as the company pushes a growth narrative, but also starts to put in play proceedings that will likely result in some level of dilution for current shareholders. This is always a tricky dance, and it will be interesting where it all lands.

“Stockholder approval of the proposed increase in authorized common shares plus the ability to enact a reverse stock split is critical for the company going forward,” stated Seamus Lagan, President and Chief Executive Officer of Rennova adding “Should any of the company’s convertible debt or preferred stockholders elect to exercise or convert their shares, the company currently does not have sufficient shares to meet those obligations.”

“The agreements under which many of the convertible debt and preferred stock securities were issued require the company to seek an increase in the number of authorized shares of common stock to accommodate all of the possible issuances,” noted Mr. Lagan.

Traders will note better than 140% tacked on to share pricing for the company in the past month, but this action is running counter to the larger trend in the name. Moreover, the name has witnessed a pop in interest, as transaction volume levels have recently pushed topping 240% beyond its prior sustained average level.

Currently trading at a market capitalization of $11M, RNVA has virtually no cash on the books, which is balanced by about $9M in total current liabilities. RNVA is pulling in trailing 12-month revenues of $3.5M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 387.7%. This is an exciting story, and we look forward to a follow-up chapter as events transpire. Sign-up for continuing coverage on shares of $RNVA stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $RNVA, either long or short, and we have not been compensated for this article.

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