Investors Abandon On The Move Systems Corp (OTCMKTS:OMVS)’s Ship
A little over a month ago, On The Move Systems Corp (OTCMKTS:OMVS) was hovering around $3 per share. Yesterday, it wiped out a fifth of its value and it stopped at exactly $1 per share. If early trading is anything to go by, the drop isn’t about to end here. A couple of minutes into the session, OMVS is a further 12% down.
So, why did the stock incinerate such a massive portion of its market cap in such a short period of time?
The truth is, OMVS never really deserved the $3 per share valuation. Not with the 10-Q for the period ended May 31 which, in case you haven’t gone through it, looks like this:
- cash: $7,154
- current assets: $146,654
- current liabilities: $1,132,843
- quarterly revenue: $2,250
- quarterly net loss: $337,383
You might be a bit perplexed by this, but the revenue that you see above isn’t generated by the much-talked-about “Uber for trucking” service. Instead, it’s coming from advertising on a race car that OMVS owns a portion of through a joint venture.
The actual service that the company press releases talk about isn’t live yet, and although the management team have spent quite some time telling us how lucrative it will be once it’s online, they seem a bit reluctant to tell us when the proper revenue generation process will begin. That’s why, although they sound optimistic at first, OMVS‘ press release seem a bit fluffy. Especially now, when the stock has already wiped out a significant portion of its value.
The combination of a dismal financial statement and a series of uninformative press releases is a volatile one, but it might not be the only thing pushing OMVS down. There is one more problem and we’re pretty sure that some of the shareholders would like to hear what the management team have to say about it.
The said management team have issued quite a lot of notes over the years which are convertible at fixed prices that are quite low compared to the current market value. That was all well and good until about six months ago when OMVS was a sub-penny ticker.
In March, however, the same management team decided to effect a 1 for 500 reverse split and they knew that this was going to artificially inflate the market price. They didn’t bother with altering the conversion prices, however, which means that the threat of numerous discounted shares seeing the light of day presented itself immediately. Sure enough, the note holders didn’t need a second invitation.
On April 1, a significant shareholder and a related party called Panama iPhone Corporation (no, we haven’t made it up) received 1 million shares as a conversion of $100 thousand worth of debt. $0.10 per share is a pretty tasty conversion rate, but by the looks of things, the company that named itself after Steve Jobs’ creation actually drew the short straw.
At the end of May, numerous other unaffiliated parties held an aggregate of $1,352,507 worth of debt, and their notes were convertible at prices ranging from $0.001 to $0.015 per share. Between June 11 and July 10, $2,650 of that debt was turned into 265,000 shares of OMVS common stock which, as of the time of writing this article, are worth about $233 thousand.
