TORON Inc/SH (OTCMKTS:TRON) is a penny stock that has exploded higher over the past few days. From what we can tell, the move is rooted in revelations related to a possibly interesting synergistic acquisition that would make use the company’s existing technological IP. Shares are up about 400% over the past two trading sessions.
The company just announced that “our vision to further enter the healthcare market has taken another step forward. Toron is proud to announce we have entered into a Letter of Intent to acquire InMed Group, Inc., a Montgomery, AL based operator of hospitals and senior care facilities. InMed operates 3 hospitals and 9 adult care facilities in Alabama and Georgia. For Fiscal Year Ending 31 December 2016, the group recorded Revenue of approximately $87 million and posted an EBIDTA of approximately $7.6 million.”
TORON Inc/SH (OTCMKTS:TRON) bills itself as a company that Toron, Inc. is an innovative disruptive healthcare technology company headquartered in Miami Beach, Florida.
The company is focused on integrating access to electronic data interfaces for healthcare providers and payer systems in a user-friendly manner.
Toron provides ease of use for patients by simplifying their check-in registration process. Simplifying this process also reduces healthcare providers’ administrative expenses and lost revenue due to insurance rejections or denials.
However, as noted above, this acquisition may ultimately start to look like a reverse merger whereby InMed becomes the main operating entity here. InMed, according to information in the press release, is a privately held corporation which has been in business since 1994. The company owns and operates three (3) hospitals located in Alabama and Georgia. Additionally, it owns and manages surgery centers and adult assisted living facilities.
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The release that seems to have sparked all of this excitement states: “We entered into the Letter of Intent with InMed Group on 5 March 2017 and amended the Agreement on 13 June 2017 and 8 October 2017. On 29 September 2017, Toron received a Letter of Intent for $11 million in equity from Flagship Properties, a New York-based institution. We are currently negotiating with several financial institutions for the debt component to complete our acquisition financing.”
President Ortiz Morentin stated “This acquisition demonstrates our resolve to bring value to all Toron shareholders and will serve as a clear example of the veracity of our iMedScan software. We fully intend to implement iMedScan software into all the operating units and expect that the insurance and patient collection process will be dramatically improved and hence, increase future cash flow from the acquisition.”
According to this quote, we would not look at this as a reverse merger if the company’s main IP ends up being involved in operations of the combined entity. There could be some synergies there, in which case it would look like an actually accretive transaction.
Given all of this, it is possible that we will see follow-through momentum for shares of the stock. However, investors will be eagerly awaiting additional details about the precise nature of the financial arrangements underpinning the prospective deal. As OTC market participants know better than perhaps any other trading cohort, the devil’s in the details.
Recent action has seen a bit less than 370% during the past week in terms of shareholder gains in the company, a bounce that has taken root amid largely bearish action over the larger time frame. The situation may be worth watching. TRON has evidenced sudden upward volatility on many prior occasions. Moreover, the stock has benefitted from a jump in recent trading volume to the tune of exceeding 1000% above its longer-run average levels.
Currently trading at a market capitalization of $10.3M, TRON has virtually no cash on the books, which compares with virtually no total current liabilities. The company is pre-revenue at this point. We will update the story again soon as further details emerge. Sign-up for continuing coverage on shares of $TRON 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 $TRON, either long or short, and we have not been compensated for this article.