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My thoughts
I think app and other product roll-outs are coming very soon. I say this not only based on the PR you cited, but the hiring of the new IR firm in early August. Moreover, Frictionless had an obligation to deliver as seen by the following in the 10-Q:
"In terms of the SPA, Frictionless agreed to deliver to the Company on or before August 30, 2021, a live fully compliant financial payment Software as a Service solution for use by the Company as a digital payment platform that enables payments within the United states and abroad, including Mexico, together with a service agreement providing a full suite of product services to facilitate to Company’s anticipated product offerings. "
It's not uncommon for software to be delayed, but if FFT came within this deadline, then we should see rollouts soon. As I've stated before, I also believe that the increase in AS was to accommodate the exercise of the option of 41% of FFT to give IPSI controlling interest. If they do the R/S, I would push for them to do a proportionate reduction in the A/S, but that can be done relatively easily without shareholder approval (unlike an increase in the A/S, which needs to be voted on).
Many factors suggest otherwise, but everyone is entitled to their opinion
1. The range isn't comparable to the typical R/S dilution scheme. If you think through the range and the pro forma share count, it lines up well with the share structure desirable for uplist. Look at FCUV as a case study. Reverse, capital raise, uplist and the stock went from $6 to peak at over $24. That's for a business with low gross margins that barely generates $1mm in run-rate revenue and it peaked at close to a $1bn valuation.
2. Cash balance is over $7mm at June qtr end and is probably still over $6mm at this point. They've basically outsourced product development to Frictionless and will acquire majority interest to control the stack. I think that will be a great deal for shareholders of IPSI.
3. They have institutional investors that are in at much higher prices. Moreover, Corbett's warrants strike at $0.24 and are subject to adjustment just like every other shareholder. I find it hard to believe he wants to self-injure particularly given the company is not cash constrained.
I think we'll start to get a PR blitz soon as Corbett has every incentive to get the stock price higher.
Frictionless
Worth visiting this site to learn about this company's product offering. I'm fairly certain that IPSI will exercise its option to buy another 41% of this company, which I believe would be significantly accretive to the share price.
https://frictionlessft.com/
Clarification
The R/S is strictly to effect the uplist IMO. It's quite likely they will first issue additional shares for M&A (Frictionless being a likely target) and this presumably will boost the valuation. Consequently, the R/S ratio will be lower as the price rises and be done after any additional shares are issued.
You need to think through the sequence of events. I wouldn't be surprised if they don't reduce the AS after an R/S (depending on the ratio). I don't believe that requires shareholder approval.
Possible reason for much of the increase in A/S
Keep the following purchase option in mind:
The Company has an irrevocable right to acquire up to an additional 41% of the outstanding common stock of Frictionless at a purchase price of $300,000 for each 1% acquired.
At an $0.08 share price, for example, it would take a little over 150mm shares to acquire Frictionless. The increase in the A/S accommodates this and potentially other deals.
Climb back up to more rational levels
The revised R/S ratio actually makes complete sense if the R/S is used strictly to get to the minimum price for uplisting. It suggests to me that Corbett thinks they'll get the stock back up to $0.20 at the very least and hopefully a lot higher. I've already given my thoughts on the A/S increase, which I believe is being done to facilitate strategic M&A, likely to exercise the purchase option on Frictionless.
It was unfortunate that management either made an error or demonstrated poor judgment, but at least they corrected the mistake quickly. I do agree that they should have released the preliminary after hours, in which case they could have seen feedback and made the adjustment before any trades could have taken place.
I agree
That's what Ethan suggested to me. The revised filing this morning with a more sane range for the possible R/S supports that view.
Now it's up to management to get the stock price up to a proper level.
That's huge
And it makes a lot more sense to me now. It tells me that the R/S won't be done anytime soon and really is only to hit the minimum bid-price requirement at the right time. I expect the stock to recover a fair bit in the upcoming days.
They need to get the price to at least $0.15 in my view
No point doing a R/S otherwise if the sole purpose is to uplist, which it should be now given they have ample cash. They could do a 35:1 at that point to get the minimum bid price up above $5 and there would be ~10mm shares OS at that point.
Personally, I thought they would release updates to show progress and the stock would get to $0.40-$0.50 organically and then they would talk about a 10-15:1 R/S. I think most would have been fine with that.
Upon further reflection
I'm not going to defend the proposed RS. I think it's poorly timed, but a few things to consider:
1. Corbett needs shareholder approval and the time to do it was in conjunction with the shareholder meeting. Doing another proxy solicitation would have been costly and time consuming. Not an excuse, just trying to understand their thinking. They explicitly state the rationale for the R/S is to uplist to Nasdaq. Also, all warrants (including Corbett's) and options outstanding are affected by the R/S. This is different than other R/S that I've seen where the company reverses the outstanding common but gives out post split shares to insiders. Perhaps small consolation for some, but we're all getting treated the same.
2. The balance sheet is in fine shape now with over $7mm in cash and ~$800k in converts that mostly convert at fixed prices well north of the current price.
3. Current enterprise value is ~$4mm. In my view, that's ridiculously low, but the company hasn't issued any meaningful updates in a while. I get why the stock was trading at $0.07 prior to the RS announcement, but thought the stock could easily re-rate to $0.30-$0.40 or higher with updates on the app, kiosks, prepaid cards, payment processing, payroll and other solutions.
4. AS increase could be to accommodate the exercise of the purchase option on Frictionless.
5. We all have the option to vote NO on the R/S and increase in A/S if you so choose.
I expect the stock to bounce some as cooler heads prevail, but management needs to communicate with shareholders now and explain the rationale in greater detail. They also need to generate enthusiasm for the story with meaningful business updates.
Can't imagine their institutional investors are happy
I think there's a very good chance this gets voted down. Corbett should have known better, but he seems almost desperate to uplist.
Terrible decision
But I'm buying more. Stock is basically down to cash value. All shareholders should vote AGAINST the R/S. I'm surprised someone with Corbett's financial background would propose such a move.
Filings are up to date
That's good to see. I hope we start to get more announcements, particularly about the Asian deals they've alluded to.
Frame of reference
George Sharp's shells trade at valuations ranging from $40-$100+ million. I get that he has credibility based on finding frauds and Humbl worked out (whether there's an actual business there to justify its multi billion market cap only time will tell). CHIF is trading at a paltry $6mm valuation based largely on lack of news flow. SBC did a good job feeding OTC traders with constant updates to get NSAV up to a respectable market cap even at the current price. I believe they can do better here given the markedly better share structure.
First step, get the quarterly filing done. Perhaps that's what the company is waiting to do and then we'll get some information updates.
There's lots of true esports companies out there to acquire. Moshn was a letdown for a first deal. I hope they realize that and move on to better options.
Filing looked clean to me
SS hasn't changed in months and no appreciable converts to worry about. Would be nice if they had given a timeline for the exchange and marketplace. I suppose after what happened with NSAV, they didn't want to make the same mistake by overpromising and underdelivering.
The filing is up
10-q for the second qtr is up. Actually shows a modest net profit, but we know the significant operations, like the crypto exchange and NFT marketplace, are yet to come.
New CFO owns 2mm shares (direct, not options)
Based on the form 3 filing on 8/13. Seems like he bought them on the open market, which is a great sign. It also might explain the information void for a while to keep the share price down so he could accumulate.
Management's interests are certainly well-aligned with shareholders. Time for them to show evidence of execution and start generating some excitement around the story.
I agree with the comment that we can't just wait to deploy kioks to get the business moving forward. I'd keep in mind, they have a payroll solution that's been in beta testing. This will serve an additional onramp into the IPSI ecosystem (wallet, stablecoin, money transfers etc.).
More importantly, big sellers are long gone
Not sure about whales, but bigger buying will come once information updates start hitting. It never shows up at bottoms- those are marked by exhausted sellers.
Stock is being pinned by a relatively big block. That will get eaten up easily once deals are announced or completed. The stock is so thin, any appreciable buying, even a few hundred thousand shares, will result in a multi-fold increase.
Personally, I hope they walk away from the Moshn deal as it has nothing to do with esports. They only signed an LOI, which is easy to walk away from. Perhaps that's what's going on. They saw the tepid reaction to that deal and have shifted focus to other deals in the pipeline.
NSAV was a ~15 bagger from its lows a few months ago. That was with 6 billion shares outstanding (peaked at a market cap over $900bn). I believe the move here will ultimately dwarf that one, but it's up to SBC to execute.
NSAV with a clearly inferior share structure
Has a market cap over $260mm (likely a lot higher on a fully diluted basis). CHIF has an incredible share structure and only a $6mm market cap (at a similar market cap, CHIF would trade at ~$13). We'll do fine here once SBC gets the deals done.
I understand the frustration and disappointment, but I believe patience will be rewarded.
Still has close to a $200mm market cap
I'd take that here and be quite pleased with my return.
NSAV off to a tough start
Management changes, delayed start on their exchange could cause rotation into UAMM. Once the exchange and NFT marketplace announcements hit, I too firmly believe the stock will trade well past the prior 52 wk high.
Tough start for NSAV
I'm surprised the stock is down so much. I would have thought Tilton's departure would be well-received.
WRT to CHIF, Silverbear already appointed a new CEO months ago and there's another Silverbear board member. Perhaps some money will rotate here or UA-MM.
Not surprising
While NSAV's stock price decline wasn't unexpected as it was priced to perfection and likely to see a "sell the news" exodus, I'm not as quick to condemn management as many on that board. I'm deeply involved in crypto and have direct insight into a competitive exchange (well, one based in the US). There are a number of operational challenges associated with running a custodial exchange (ie. one where coins are kept on the exchange vs. in a private wallet). Taking some extra time to iron out the operational issues and have more confidence in your security protocols is a prudent move. Perhaps they should have tempered expectations along the way, but it's hard to keep putting out PRs simultaneously as your working on problems.
With respect to the stock, NSAV, as I said, was priced to perfection even at $0.10 (let alone the 52 wk high). It's now going to be judged on customer growth, trading volume, revenue etc. Given the market cap, there were already high expectations embedded in that stock. It was priced to fail (at least short term). I actually tried to buy some to play a bounce, but my brokers don't allow me (no problems buying CHIF). I suspect there are others in a similar position.
Conversely, CHIF has VERY low expectations at this point and is going after less technically complex end markets. This stock has been left for dead due to the absence of news flow. Once news starts hitting, I firmly believe we'll go well past the 52 wk high.
Great post
Thanks for the effort to clarify the process. Seems like this is strictly a timing issue, not something to increase anxiety as some have attempted to do.
I hope we get some clarification from management in the next PR.
Unfortunately, no one knows
There's no concrete date. Could happen at any moment. Management did suggest it would be announced in a PR, but I suspect we'll get a Tweet or two as well.
Atlanta Fed on the importance of addressing the last mile problem for the unbanked
The Atlanta Fed is a branch of the Federal Reserve that does a lot of important research to inform the Board of Governors. For example, it's the branch of the Fed that puts out updated estimates of quarter GDP growth. Yesterday they posted a research paper that highlights the importance of solving the last-mile problem for the unbanked. This problem refers to the fact that many (5.1% of households or 7.1mm total households) just in the US don't have bank accounts. If you don't have bank accounts, you can't make digital payments through credit and debit cards let alone services like Paypal, Venmo etc. IPSI's payroll and payment solutions help solve this problem though the inclusion of the stablecoin, network of kiosks, digital wallets etc.
Worth taking the time to read the paper. It's brief and to the point.
https://www.atlantafed.org/-/media/documents/research/publications/policy-hub/2021/08/02/09-digital-payments-and-unbanked.pdf
Almost tripled my position yesterday
Took advantage of the low $0.03s to buy more. We're due for updates on both the crypto exchange and NFT marketplace soon. The market cap is only ~$10mm here vs. over $600mm for NSAV. I think we'll take out the prior year high and approach 10x territory at some point in the next couple of months (hopefully go a lot higher, but we'll have to assess the news as it comes in). Paid to wait here IMO.
I'll take my chances with CHIF's much better share structure
Silverbear is running the show here too. CHIF's market cap is a paltry $6.7mm vs. ~$600mm for NSAV. Wish you the best of luck with NSAV, but from current valuation levels, CHIF is the much better bet.
If I were you, I'd get some shares here. Once acquisition announcements start hitting, this one will take off given the very thin float and very low OS.
NSAV has almost a $900mm market cap (certainly on a fully diluted basis)
Not arguing whether that's fair or sustainable (personally I think not, but that's not the point to debate). CHIF trading at a measly $5mm market cap with a significantly better share structure.
Silverbear needs to get its act together here.
Don't disagree
NSAV has a market cap approaching $900mm. Not arguing whether that's sustainable or not, but certainly argues for UAMM trading at least at $1 as you suggest.
N$AV actually has almost 20x more shares
N$AV basically has a maxed out share count at 6bn shares vs only 313mm for UAMM. The market cap disparity should narrow considerably once we learn more about the crypto exchange and NFT marketplace.
LOL...perhaps not exciting
But necessary to have an independent board for a real company that can potentially uplist. Have to build a proper foundation to support future growth.
They obviously need to do a much better job telling their story, but I have to believe we'll see that in the next few months.
Added an independent board member
As I previously indicated, Novikov resigning was almost certainly to facilitate the addition of an independent board member. This is critical for any future uplisting. Company needs to do a much better job getting the markets excited about the story, but it appears that the foundation has been set with the new CFO and revamping of the BOD.
From the 8-k (my emphasis in bold regarding independence):
On July 22, 2021, the board of directors (the “Board”) of Innovative Payment Solutions, Inc. (the “Company”) appointed David Rios (“Mr. Rios”) to the Board of the Company to serve until the Company’s next annual meeting of shareholders.
Mr. Rios is a currently a philanthropist. Prior to turning to philanthropy approximately ten years ago, Mr. Rios was the founder, Chairman, and Chief Executive Officer of D.F. Rios Construction, Inc., the largest framing construction company in the state of California, for over 30 years. Mr. Rios was also President of the California Framers Association and on the Board of Carpenters. Additionally, Mr. Rios sat on the Board of Pan Pacific Bank where he was instrumental in closing its acquisition by California Bank of Commerce in December 2015.
There are no family relationships between Mr. Rios and any of the Company’s directors or executive officers and the Company has not entered into any transactions with Mr. Rios that are reportable pursuant to Item 404(a) of Regulation S-K.
Mr. Rios will receive board fees of $2,500 per month effective July 1, 2021.
Hope it's a start
Lot of work to do in terms of regaining momentum for the stock. Silence isn't golden, particularly when it comes to the OTC.
New CFO
Seems to have the right background to move forward with the uplisting plan. That said, we all know the market cap has to increase markedly. One would think they'll have a lot of announcements lined up for the rest of the Summer and certainly the early Fall.
CARMEL, CA, July 28, 2021 (GLOBE NEWSWIRE) -- via NewMediaWire -- Innovative Payment Solutions, Inc. (OTCQB: IPSI) (“Innovative” or the “Company”), a California-based fintech company focused on building a 21st century universal digital payment platform, IPSIPay, today announced the appointment of Richard Rosenblum as the Company’s new President and Chief Financial Officer.
Mr. Rosenblum is an entrepreneur and business veteran in the areas of the financial services, capital markets, healthcare, technology, and real estate. His experience ranges from being a managing director at several investment merchant banks as well as a C-suite executive. Mr. Rosenblum has sat as a director on boards of both public and private companies that focus on healthcare, life sciences and technology. He is also the founder of Harborview Capital, where he led a team of strategic advisors in the areas of capital formation, merchant banking and management consulting, and funding over $250 million in capital for companies.
Independent board for uplisting
IMO, today's 8-k reflects another step in the uplisting process. I'm fairly certain the company wants to increase the number of independent board members and Nasdaq likely made that suggestion.
Prior to today's announcement, there were two company executives and I believe Mr. Corbett's daughter (or wife, I can't tell from the bio) out of a total of five members- clearly not independent. Novikov resigning frees up the necessary seat for a truly independent board. This is actually a positive for all concerned.
They could have increased the board size too, but it's hard, both in terms of time and money, to recruit new board members. You also have to compensate board members with money and/or stock, so that's not good for shareholders.
I understand
While not as well-versed as you are, I have followed the mining industry and oil and gas exploration business for many years. I was making a general comment, not trying to set expectations as far as timing is concerned.
Need to see evidence of execution...
And the stock will re-rate a lot higher. I do believe patience will be rewarded.
It's not dilution
Dilution means your ownership percentage of the company declined because of additional primary share issuance. That didn't occur here (you might want to read up on dilution in Investopedia or some other site to familiarize yourself).
The fact the share price went down doesn't mean there was dilution. That's where you have to distinguish between price and value.
I give up if you still don't understand. You're seemingly not the only one.
That's not dilution
Whoever posted that doesn't understand the definition of dilution. Dilution is an increase in the total number of OUTSTANDING SHARES. That 30mm increase was in the FLOAT. Very different.
The increase in the float has obviously had a negative impact on the share price, but that effect is over at this point- those shares have been absorbed into the market.
Careful what you read on the Internet..it's not always correct..LOL