One World Holdings Inc (OTCMKTS:OWOO) Wipes More Of Its Gains
Yesterday the stock of One World Holdings Inc (OTCMKTS:OWOO) continued its decent down the chart. The company slashed another 12% of its value and is currently sitting at $0.0066 per share. Just for the past three sessions OWOO‘s shares have dropped by nearly 50%.
In August OWOO experienced a meteoric rise up the chart on the back of the company’s encouraging PRs. The announcement that their Prettie Girls! Tween Scene Dolls are going to be released in over 2900 Walmart stores certainly helped the company capture the attention of the market and investors were eager to jump right in. The dolls should hit the shelves by mid-October while a new line of baby dolls is planned for the 2016 Spring retail season. In a letter to the shareholders the CEO of the company, Ms Corinda Joanne Melton, stated that as of August 10 they had received retail purchase orders for over $855 thousand. If everything is going along so smoothly what could explain the recent painful slide of the stock?
Well, let’s take a look at OWOO‘s latest financial report and the answer should become quite obvious. As of June 30 the company had:
• $ZERO cash!!!
• $608 thousand total current assets
• $24.9 million total current liabilities!!!
• $833 sales
• $8 million net loss
Even if OWOO start generating increased revenues they may not be enough to offset the rest of the numbers found on the balance sheet. Nearly the entire amount of the report liabilities consists of convertible debt – $1.9 million in convertible notes and $19.9 million in derivative liabilities.
The company has been having serious troubles with the dilution of its common stock for quite a while and at the start of last year they were even forced to implement a 1-for-750 reverse split. That however only freed up more room for the issuance of shares. Between November 12, 2014, and August 14, 2015, the outstanding shares of the company ballooned from less than 49 million to over 367 million. In the first half of 2015 167 million shares saw the light of day at an average of just $0.004 per share. Another 29 million shares were issued at an even lower price – $0.001 per share, between June 30 and August 14. According to the quarterly report as of June 30 the convertible debentures and related accrued interest payable were convertible into approximately 2,514,516,000 shares of common stock.
In a recent interview it was announced that OWOO is going to receive $2 million in a low-cost financing provided by the Tonner Doll Company. The problem is that the Tonner Doll Company will first have to raise the money through a planned $5 million offering.
OWOO are moving in the right direction but unfortunately the red flags surrounding them remain as serious as ever. The potential dilution is simply crushing and if the millions of discounted shares find their way to the open market the effect on the stock could be devastating.