Dragni Dragnev

Innovus Pharmaceuticals Inc. (OTCMKTS:INNV) Rises On News

by Dragni Dragnev July 20, 2016

One can't help but be suspicious of a company who announces that it has taken on even more toxic debt while being pumped by the ironically named “SECfilings.com”. Which is exactly what is happening with INNV right now.

The actual filing by INNV received and published by the SEC boldly announces that the company has managed to acquire $2.5 MILLION worth of funding – all of which carries the provision of “a conversion price of $0.25 per share” - and that's supposing that INNV doesn't default on the debt. If it does, the conversion rate becomes as bad as “75% multiplied by the volume weighted average price of the Common Stock during the ten (10) consecutive trading day period immediately preceding the later of the Event of Default” or even “60% multiplied by the lowest daily volume weighted average price of the Common Stock during the ten (10) consecutive day period preceding the date of conversion”.

Once this is taken into account, INNV's overall picture begins to look a lot less cheery than the company tends to present it in its press releases.

The situation is made even worse by the fact that the company is already waist deep in toxic debt. Suffice it to say that last time it filed its 10-Q, INNV already had $1.32 million worth of debt that could be converted into shares of the company's common stock at a rate of $0.15 per share at the note-holders' leisure.

So let's recap. What we have here is a company that, until just recently, had little in the way of capital to spend. Now, it has acquired some – again, at the expense of burdening investor value with toxic convertibles. And while all of its boasting is taking place, it is also on the receiving end of a paid pump.

With this in mind, it should be pretty obvious what's going on here.

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