Is Rennova Health Inc (OTCMKTS:RNVA) Shedding the Dilution Bug?

Is Rennova Health Inc (OTCMKTS:RNVA) Shedding the Dilution Bug?


A stock we haven’t updated yet this month, Rennova Health Inc (OTCMKTS:RNVA) is going through some interesting times, with management working to maintain the support of shareholders through some very promising twists and turns on the cap table front. The action has possibly started to heat back up in this March and April high flier.

The key right now lies in the fact that the company just announced that the Board of Directors is withdrawing the request to approve a reverse stock split at its Special Meeting of Stockholders on May 9, 2018. Note, this follows a prior announcement of the postponement of this same Special Meeting of Stockholders which was originally scheduled for April 18, 2018, and was subsequently postponed to May 2, 2018. In other words, the meeting has been a moving target. But the lack of a reverse split – widely understood as a tool of dilution – is likely a positive that has helped to buoy shares into the weekend.

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 we noted above, the important point here is the fact that the market has been operating with the assumption of some dilutive strategies coming from the company, and now may have to rethink that assumption in a manner that could add value to shares as we move toward the key shareholder meeting next week.

“Following communication with our shareholders and our intention not to complete a reverse split of our common shares in the immediate future it was decided to remove the request to approve this action at the discretion of the Board as was described in our proxy statement” stated Seamus Lagan, President and Chief Executive Officer of Rennova, adding “Stockholder approval of the proposed increase in authorized common shares is both necessary and critical for the company going forward and it is our hope that our shareholders recognize this necessity and vote “for” and approve the remaining proposals now that the reverse split proposal has been removed. Without approval of the remaining proposals our plans to increase shareholder value going forward will be severely restricted”

Traders will note 29% piled on for shareholders of the company during the trailing month, a rally that has pushed up against longer standing distributive pressure in the stock.

In addition, the listing has benefitted from a jump in recent trading volume to the tune of approaching 220% beyond its prior sustained average level.

Currently trading at a market capitalization of $9.8M, RNVA has virtually no cash on the books, which compares with 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%. We will update the story again soon as developments 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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