Borislav Tonev

TNI Biotech Inc (OTCMKTS:TNIB) Attempting To Resurface

by Borislav Tonev September 12, 2013
1TNIB.pngIf you are looking to buy a car, and especially if you are more into a performance-oriented automobile, the dealership representative will probably try to close the deal by saying: "This new model can go from 0mph to 60mph in under ten seconds.". In much the same way, if you are interested in purchasing some TNI Biotech Inc (OTCMKTS:TNIB) shares, the person selling you the stock can say: "This ticker can go from $2.70 to $0.70 in less than two weeks.". Testing the car seller's claims could be a bit of a bother, but if you are interested to know if TNIB's behavior really is that extravagant, then you only need to take a quick look at the chart on the right and see that it is true.

The problem is, while most car enthusiasts prefer to have their automobiles fast, no penny stock investor likes to lose money and, unfortunately, that's exactly what happened over the last week. TNIB registered a total of seven consecutive red sessions and wiped out around 74% of its value in record time. There can really be no excuse for this sort of catastrophic performance, especially given the absence of a paid pump or, in fact, any other obvious factor that might depress the price.

What's more, TNIB gave us an optimistic piece of news last Wednesday when they announced that they have signed an agreement with Laboratorios Ramos (a Nicaragua-based laboratory) for the manufacturing of the Low Dose Naltrexone (LDN) which should soon be ready for commercialization. There are a couple of positive things that could come out of the deal. One, the immunotherapy should be available for sale soon leading to the start of the revenue generation in the coming months and two, TNIB will have more spare time to reactivate the research and development process for the therapeutic treatment of cancer, HIV and other autoimmune diseases. Good news, you would agree, but apparently, the investors weren't paying attention and the price continued dropping at a rapid pace.

TNIB noticed that the press release from September 4 went under the radar and probably that's why, they decided to remind traders about the manufacturing agreement yesterday. The new announcement is almost word-for-word identical, but this time they added a little extra something.

In addition to informing us about the deal for the second time, they said that they have received a cash injection of a round $1.36 million after the exercising of some existing stock warrants. We're not sure if this is the primary cause, but this time, the investors took note and by the end of the day TNIB managed to make a 39% rally closing the session at exactly $1.

It's still quite a long way off the $2.70 that it occupied less than a month ago and it's even further away from the $5 heights registered in mid-June. The chances of going back up there at the moment seem rather slim, but that's not the only thing shareholders should worry about.

3TNIB_logo.pngYesterday's press release doesn't give us any information on how many warrants got transformed into common shares and it doesn't disclose the conversion price. Especially considering the unknowns around the success of the LDN product that is yet to be launched, the newly issued stock will probably cause some dilution. How much is still anyone's guess and we can also speculate on what portion of the new shares are "in the money".

We'll probably receive answers to these questions when the future SEC filings see the light of day, but until then, and until we see some factual evidence that TNIB are generating revenues, the ticker's behavior remains unpredictable (putting it mildly). In many ways, the chart movement is even worse than that of some heavily promoted ventures like Xumanii International Holdings Corp (OTCMKTS:XUII) and North American Oil & Gas Corp (OTCBB:NAMG). That's why, careful consideration of every single move is definitely a good call.

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