EMS Find Inc (OTCMKTS:EMSF) Bounces On Record Volume

On Monday EMS Find Inc (OTCMKTS:EMSF) announced the integration of their on-demand medical transportation app with  Uber services. The PR definitely caught the attention of the market and on that day the number of shares traded by investors reached the unprecedented for the company level of 1.77 million shares. The intense trading, however, didn’t translate into an upwards surge for the stock. On the contrary, the ticker suffered a severe crash of nearly 26% and dropped to a close at $0.185. During the session EMSF registered a new 52-week low of $0.16 per share.

Yesterday the stock was able to reclaim at least some of its losses as it jumped right back up by over 16% to a close at $0.215. This time even more shares got exchanged setting a new daily volume record of 2.06 million shares. Is this just a short-lived bounce caused by the stock’s record low price levels or is it a signal that the sentiment towards EMSF is starting to change?

At the moment the company commands a market cap of a little over $6.3 million but even such a modest valuation seems to be a bit too much. Opening the latest quarterly report filed by EMSF reveals that as of December 31, 2015, the company had:

• $86 thousand cash and total current assets!!!
• $563 thousand total current liabilities
• ZERO revenues
• $538 thousand net loss

The financials are rather depressing even on their own but investors have to also worry about the outstanding convertible notes of the company.

Back in October 2015 EMSF entered into a Securities Purchase Agreement with LG Capital Funding, LLC. under which the company can sell up to four $125,000 convertible notes. As of the filing of the report two such notes had been sold. According to their terms LG Capital Funding can convert the notes into common shares at a 20% discount.

Again in October, last year, EMSF formed a new subsidiary called Viva Entertainment Group, Inc. that was supposed to develop it’s over the top (IPTV/OTT) application for connected TVs, desktop computers, tablets and smart phones. Earlier this month, however, the entire subsidiary was sold for just $100 thousand in the form of 10% promissory note.

The red flags surrounding EMSF are far too serious to be taken lightly. Keep in mind that last year the company was pumped by a prolonged $1.2 million hard-mailer promotion.