Wowio Inc (OTCMKTS:WWIO) Rises Again
If you open Wowio Inc (OTCMKTS:WWIO)’s latest 10-K and read through it carefully, you’ll see that the company has a few sources of revenue, and you’ll also notice that many more projects are in the pipeline which should make the future much brighter than it is at the moment.
Yesterday, the company CEO, Brian Altounian, decided to update the shareholders on some of the recent developments and according to his letter, everything is going to plan. Mr. Altounian also said that, in the management team’s opinion, the stock is undervalued. Apparently, investors thought the same way and they scrambled to do something about it.
After six and a half hours of intense trading, WWIO managed to gain about 100% and it finished the day with a price of $0.0006 and a dollar volume of around $190 thousand. Lots of people jumped in and they are probably wondering if WWIO can stay calm under the pressure.
That is for the future to tell, but let’s not forget what happened the last time the stock doubled its value. Two weeks ago, the company announced a $5 million financing commitment which will be conducted through the sale of preferred stock. In a move similar to yesterday’s one, WWIO jumped up and reached $0.0006 on a significant volume. It later slipped, however, and it went pretty much back where it started.
The performance over the last year or so hasn’t exactly been impressive, either. WWIO got its stock listed on the OTC Markets at the beginning of 2014 and about twelve months ago, it was hovering around the $2 per share mark. You can see where it is now.
Part of the problem lies with the company’s financial situation. In addition to the overview of WWIO‘s future projects, the 10-K mentioned in the first paragraph also contains the 2014 financials. They look like this:
- cash: $552
- current assets: $312,826
- current liabilities: $4,436,209
- yearly revenues: $159,038
- yearly net loss: $3,826,483
It’s clear that with cash reserves as good as gone, tonnes of debt, and an enormous net loss, WWIO isn’t going to cut the mustard with investors. Still, some of the more forward-looking among you will probably say that with the $5 million financing in place and with the numerous future revenue sources, things might improve in the months to come.
The results will need to be massive, though, because the stock has been put under quite a lot of pressure from the truly horrifying dilution that has taken place over the last few months.
Shortly after going public, WWIO had just over 23 million shares issued and outstanding. By the end of last year, this number had grown to around 42 million. A couple of weeks ago, it was sitting at an eye-watering 386 million.
As is often the case in Pennyland, the reason for all the share printing is toxic debt. The Subsequent Events section of the 10-K tells us that between December 31, 2014 and April 10, 2015, WWIO converted $177,901 worth of convertible notes into 339,596,577 shares of common stock. In other words, 87% of the O/S count was issued at a rate of just $0.0005 per share. With that in mind, WWIO might have some seriously hard time getting out of the mud.
And if you think that the dilution is now over, we would suggest that you consider one more thing. We don’t know how much toxic debt is waiting to be converted into stock at the moment, but we do know that at the end of last month, WWIO‘s management team raised the number of authorized shares to 4 billion. So, there’s no shortage of room for more exuberant share printing.
