Second time at the altar and groom walks. $1.15 down 80% on the news.
After a 20:1 reverse split on 4/25 that’s equal to $0.05 a share for pre-split shareholders, or an all-time low.
First was a canceled secondary in May of 2017 – where the Company noted it had “..successfully raised more than $45mm in equity and debt securities privately over the past few years.” Now this external problem with their Indian subsidiary, which blindsided the Company.
Things were looking rather bright, including a $5 million raise in February of 2017 and then the current rights offering which had subscriptions of $7.4 million and then boom – legal issues, delaying the completion of their 10K and Nasdaq Listing.
In an 8K and press release, they made note of these legal issues having the effect of not enabling the company to file its 10K (which is required for the Nasdaq listing) in a timely manner, so presumably rather than leaving shareholders hanging in the wind, they decided to terminate its rights offering and return the $7.4 million in funds to 218 investors.
So where does that leave the Company? The only thing we know for sure is no one we know, knows for sure. Is it lights out?
Have they been spending money under the assumption they were about to bank $7 million any day – leaving themselves extra vulnerable to cash crunch? All micro caps are risky but this chain of events makes them extra, extra risky. So sad.
Any lesson to learn? Since this was such a blindside, the only thing we can think of lesson wise is to always diversify. 80% hits are never pleasant, but if one issue only represents 5% of your risk portfolio (1 of 20 stocks), you just move on, like we are.
MoneyOnMobile Announces Termination of Rights OfferingPress Release.
DALLAS, TX and MUMBAI, INDIA / ACCESSWIRE / August 22, 2018 / MoneyOnMobile, Inc.(OTCQB: MOMT) announces that it is terminating its rights offering and returning funds to investors. MoneyOnMobile’s escrow agent received gross proceeds and subscriptions of $7,417,818 into escrow from 218 investors.
Upon closing of the rights offering, the Company would have issued to these investors 1,236,303 shares of its common stock. The closing of the rights offering was subject to MoneyOnMobile’s Common stock being successfully listed on the Nasdaq Capital Market Exchange. As of July 17, 2018, MoneyOnMobile had cleared all the requirements for the listing on Nasdaq except for the filing of its annual audited 10-K report. At this time MoneyOnMobile does not believe that periodic report can be completed in a timely manner due to Indian shareholders challenging MoneyOnMobile’s control of its subsidiary My Mobile Payments Limited (MMPL).
Management has learned of numerous unauthorized, illegal actions by MMPL’s Board of Directors which violate various investment and shareholder agreements in place. We are pursuing extensive legal actions to reverse such actions. We believe our legal case is strong and should prevail, however, there is no specific time frame for an ultimate conclusion. Therefore, MoneyOnMobile is terminating its rights offering and returning the funds to investors.”We could no longer in good faith hold investor subscriptions in escrow, without knowing when the end to this offering would come. We are obviously disappointed with this outcome and shocked that our local partners would mount this challenge in direct violation of our investment agreements, which they have confirmed many times as part of our annual audit process.” said Harold Montgomery, chief executive officer and chairman.
About MoneyOnMobile, Inc.
MoneyOnMobile, Inc. is an India focused mobile payments technology and processing company offering mobile payment services. MoneyOnMobile enables Indian retailers to use mobile phones to accept payment for goods and services or transfer funds from one person to another. It can be used as simple SMS text functionality or through the MoneyOnMobile application or internet site.
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