Yesterday the share price of CommerceTel Corp. (OTC:MFON) jumped to the resistance level after our newsletters database registered the first promotional newsletter for the stock. 
The session closed at exactly $1.50, which is a 20% increase from the previous close. The trading volume was six times higher than the average for the past three months with 9,600 traded shares. There has been no news since Monday last week, thus the only reason for the jump appears to be a paid promotion.
The e-mail came into our database early in the morning yesterday. In it, CommerceTel has been presented as “the company best-positioned” to profit from directly connecting advertisers with their consumers using the cost-effective mobile-advertising technologies. The e-mail has a disclaimer as well, saying that the promoter received $10,000 in cash and 40,000 restricted trading shares of MFON for the inclusion of MFON into the newsletter.
Although MFON share price jumped up twice during the day, thanks to two large transactions, the promotion cannot be considered that successful as the stock could not overcome the $1.55 resistance. The company’s financials could also not support an increase in the share price.
On Monday last week the company filed an 8-K according to which it negotiated certain additional agreements with the holders of MFON 10% Senior Secured Convertible Bridge Notes with a principal amount of $1.01 million.
The holders of $800,000 in principal amount agreed to extend the maturity date from November 2, 2011 to February, 2012, while the holders of the remaining $210,000 agreed to convert the entire amount plus interest into units consisting of one share of common stock and one warrant to purchase one share at a price of $2. The conversion price was $1.50 per unit and the company issued 153,515 common shares and the same amount of warrants.
The news that MFON has settled a substantial part of its current debt did not have much of a positive effect on the share price of the stock as the company’s financial condition still remains very weak. At the end of September this year MFON had only $373,000 in current assets, and nearly all of its total assets represented goodwill and intangible assets. Current liabilities exceeded $3.6 million and the total liabilities were over $6.5 million.
