Mind Solutions, Inc. (OTCMKTS:VOIS) Crashes By A Quarter
Last week was simply disastrous for the stock of Mind Solutions, Inc. (OTCMKTS:VOIS). On Wednesday it corrected by a little more than 7% but for the next two sessions the negative momentum only grew stronger. On Friday the company saw nearly 25% of its share price get obliterated closing at $0.0025. Throughout the session 100 million shares got dumped on the market. At the end of September the stock surged above $0.008 but at the moment it is sitting around70% lower.
Despite the depressing chart performance VOIS are actually moving forwards with their business plan. On November 5 a PR was issued and in it the company revealed a demo video about its new Brain-computer interface device. The product claims to be the smallest of its kind and Mind Solutions are preparing to begin manufacturing it. As we have said on quite a few occasions the technology seems promising but the red flags around VOIS are simply too big.
Let’s start with the most recently reported financial results. The quarterly covering the period ending September 30 showed the following:
• $181 thousand cash
• $317 thousand total current assets
• $2.5 million total liabilities
• $534 revenues
• $689 thousand loss from operations
The current cash reserves are insufficient to cover the expenses of the company. VOIS have a massive working capital deficit while the accumulated deficit since inception is getting closer and closer to $20 million. If they want to begin production of the BCI device on a more sizable scale the company will need to acquire new sources of funds. And this leads us to the biggest risk associated with them – the crushing dilution of the common stock.
Back in October, last year, the company did a 1-for-2000 reverse split and as of November 14, 2013, it had exactly 1,339,290 outstanding shares. A year later and VOIS now have 1.1 BILLION outstanding shares. Just this October 40 million shares saw the light of day as a conversion of $41 thousand worth of convertible notes. This means that each share was priced at $0.001, 60% lower than the current market price.
Even though some of the notorious toxic funders (Asher Enterprises, Magna Corp and Hanover Holdings) seem to have converted the entirety of their notes this doesn’t mean that the dilution is coming to an end. At the end of September VOIS still had around $691 thousand in outstanding convertible notes. Furthermore the company is actually entering into new securities purchase agreements evidenced by the 8-K form filed on November 3. It revealed that KBM Worldwide, Inc. purchased a $32500 convertible note that could be turned into common shares at a significant discount.
Even if you believe that the BCI device is a promising piece of technology for now it alone cannot offset the devastating effects of the dilution. Use caution and take into account all the risks around the company before committing to any trades involving the stock.
