OSL Holdings Inc (OTCMKTS:OSLH) Announces First Joint Venture With Cheryl Shuman
On April 3 OSL Holdings Inc (OTCMKTS:OSLH) revealed their intent to enter into a joint venture and licensing agreement with the self-proclaimed “Martha Stewart of Marijuana” Ms. Cheryl Shuman. After quite a lot of speculations yesterday the first joint agreement was officially announced. The news caused the stock to add over 24% to its value and to close closing at $0.0139.
Despite the sizable gain in share price the performance of the ticker wasn’t entirely positive. The daily volume of 25 million shares may have been over 10 times bigger than the 2.3 million registered on Tuesday but it still remained below the 30-day average of 31 million shares.
It seems that some investors were not particularly enticed by yesterday’s PR. And they may have a point – according to the announcement this first joint venture between Ms. Shuman and OSLH will be for a series of luxury cannabis conferences with the first event expected to take place in the Caribbean in early 2016.
The publicity generated by Ms. Shuman through the social media platforms may be enough to keep the company from experiencing any massive corrections but the red flags around OSLH remain serious. Between March 1 and April 10 a total of 176 million shares were issued as a conversion of debt at an average price of $0.0008 per share. As a whole the outstanding shares of the company grew by 62% between January 9 and April 14. As of May 6 OSLH had 646 million outstanding shares out of the 649 million authorized. According to the latest Schedule 14C filing the authorized shares will be increased to nearly 2 BILLION by May 31.
On Monday OSLH announced a major recapitalization but unfortunately that doesn’t mean that the dilution will be coming to an end. This 8-K form revealed that OSLH sold two convertible notes amounting to $256 thousand to one investor but more importantly the company closed a private placement under which a second investor will purchase an aggregate of $2.8 million spread across twelve convertible notes. These twelve notes will be issued in twelve tranches with the last two taking place in January and February, 2016. After four months since the date of its issuance each of the twelve notes can be converted into common shares at a price equal to 60% of the average of the three lowest traded prices of the stock during the prior fifteen trading days.
The stock of OSLH is more than likely going to remain a volatile choice for investment. The last quarterly report showed that their revenues are growing but the company will need to do much more if it wants to offset the effects of the massive dilution. Before you commit to any trades be sure to do your own due diligence.
