Someone asked a question in a PM. I thought my ans
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Posted On: 08/20/2018 6:08:44 AM
Someone asked a question in a PM. I thought my answer would be good to post here also. It summarizes a few things:
610M shares through the 3(a)10 debt restructuring
88M shares for the $65K LAM note
12.5M + 5M + 7.5M + 7.5M = 32.5M issued to CEO against executive compensation between 5/1/2017 and 6/15/2018
The grand total of shares added to the O/S over the past year = 730.5M
Where you write "about 1 billion was used to pay debt" - rounding up to 1 billion is a bit high, actually 698M to pay debt and 32.5M for accrued compensation in lieu of cash - which was actually sold and the proceeds loaned to the company with simple 5% interest in order to avoid convertible debt.
On 6/15/2017 there were 3,646,525,847 shares outstanding (O/S). 730,500,000 shares have been issued since that time (dilution). So in over 1 year, ONCI common stock has been diluted by 730.5M / 3,646.5M = 20.02%
That is not bad dilution, when compared to many penny stocks that see dilution from note conversions (example: RBIZ 601% dilution since Oct 2017; even with that much dilution RBIZ reversed for a price correction once the dilution stopped and selling pressure subsided).
In fact, ONCI held up very well - I mean with only 20% dilution since the 52-week high last September. Unfortunately, the stock price is down considerably, but this is exactly what value investors look for in penny stocks that have been through dilution from 3(a)10 transactions and/or from note conversions.
Now... the stock held roughly 0.01 or higher for over 3 months last fall... during the time that 40M new shares (from the 3(a)10 debt restructuring) were sold into the market and 31.5M of Steve's shares were sold. So, the pps was over 0.01 while under selling pressure, and BEFORE the bulk of the dealers were signed on, including AutoNation and CarMax, and BEFORE the company reported the past 3 quarters of revenue totaling over $3M. So 0.01 or better should be pretty easy to get back to, at a minimum.
From a price of 0.01+ to 0.0016... when the dilution was only 20%, and the company has cleaned up its balance sheet having no toxic debt remaining, and greatly increased revenue - it's very much oversold. Again, that's what value investors look for.
First, there is a lot of room for the price to correct to a much higher value. Second, there are many potential catalysts for growth, not just in the pps, but for the company (which of course, would also stimulate pps growth).
Your concern about whether "...they will have the cash to pay off any future notes" is understood, but I think you need to look at what Steve's been doing. He's loaned the company $456,473 so that we do NOT have any "future notes" that can convert. On the business development side, he's been building the sales distribution and working on OEM and private label deals, etc. On the finance side, He's been cleaning up the balance sheet, getting rid of toxic debt.
Regarding your question: "do you see onci becoming a holding co 6 legs or you don't care you only see opportunity RIGHT NOW it looks like a good play?" - I think it's way too early to be making a determination about the big picture future potential. There's SO MUCH value correction to be seen here, right now. And as I just wrote, so many catalysts for growth, that we've got a long way to go in upward price movement over the coming months that I think we'll have a lot more information before we need to decide on the future outlook for adding other legs to the business. I know what Steve wants to do, as far as the 6 legs holding company, and it all makes sense.
I'm looking for a price correction to begin within days, and we've got a long way to go upward before I would be deciding whether to sell or continue holding. I think by that time we'll have had more updates about what's going on, including the Q3 report due in mid-September (only about 3 weeks away, now).
610M shares through the 3(a)10 debt restructuring
88M shares for the $65K LAM note
12.5M + 5M + 7.5M + 7.5M = 32.5M issued to CEO against executive compensation between 5/1/2017 and 6/15/2018
The grand total of shares added to the O/S over the past year = 730.5M
Where you write "about 1 billion was used to pay debt" - rounding up to 1 billion is a bit high, actually 698M to pay debt and 32.5M for accrued compensation in lieu of cash - which was actually sold and the proceeds loaned to the company with simple 5% interest in order to avoid convertible debt.
On 6/15/2017 there were 3,646,525,847 shares outstanding (O/S). 730,500,000 shares have been issued since that time (dilution). So in over 1 year, ONCI common stock has been diluted by 730.5M / 3,646.5M = 20.02%
That is not bad dilution, when compared to many penny stocks that see dilution from note conversions (example: RBIZ 601% dilution since Oct 2017; even with that much dilution RBIZ reversed for a price correction once the dilution stopped and selling pressure subsided).
In fact, ONCI held up very well - I mean with only 20% dilution since the 52-week high last September. Unfortunately, the stock price is down considerably, but this is exactly what value investors look for in penny stocks that have been through dilution from 3(a)10 transactions and/or from note conversions.
Now... the stock held roughly 0.01 or higher for over 3 months last fall... during the time that 40M new shares (from the 3(a)10 debt restructuring) were sold into the market and 31.5M of Steve's shares were sold. So, the pps was over 0.01 while under selling pressure, and BEFORE the bulk of the dealers were signed on, including AutoNation and CarMax, and BEFORE the company reported the past 3 quarters of revenue totaling over $3M. So 0.01 or better should be pretty easy to get back to, at a minimum.
From a price of 0.01+ to 0.0016... when the dilution was only 20%, and the company has cleaned up its balance sheet having no toxic debt remaining, and greatly increased revenue - it's very much oversold. Again, that's what value investors look for.
First, there is a lot of room for the price to correct to a much higher value. Second, there are many potential catalysts for growth, not just in the pps, but for the company (which of course, would also stimulate pps growth).
Your concern about whether "...they will have the cash to pay off any future notes" is understood, but I think you need to look at what Steve's been doing. He's loaned the company $456,473 so that we do NOT have any "future notes" that can convert. On the business development side, he's been building the sales distribution and working on OEM and private label deals, etc. On the finance side, He's been cleaning up the balance sheet, getting rid of toxic debt.
Regarding your question: "do you see onci becoming a holding co 6 legs or you don't care you only see opportunity RIGHT NOW it looks like a good play?" - I think it's way too early to be making a determination about the big picture future potential. There's SO MUCH value correction to be seen here, right now. And as I just wrote, so many catalysts for growth, that we've got a long way to go in upward price movement over the coming months that I think we'll have a lot more information before we need to decide on the future outlook for adding other legs to the business. I know what Steve wants to do, as far as the 6 legs holding company, and it all makes sense.
I'm looking for a price correction to begin within days, and we've got a long way to go upward before I would be deciding whether to sell or continue holding. I think by that time we'll have had more updates about what's going on, including the Q3 report due in mid-September (only about 3 weeks away, now).
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