When the old VitaCig shell (VTCQ) was being sold by mCig in June 2016, LX Retail stepped forward and offered a reverse merger by selling Malecon Pharmacy (one of LX's holdings) to VTCQ in exchange for roughly 575 million VTCQ shares (controlling interest). Post merger the company's stock symbol and name were changed to OMHE and Omni Health. At the time, mCig was told that LX wanted to become a public company so that their employees and management could better participate in the company's growth through an ESOP.
mCig's DD showed that LX Retail and Malecon Pharmacy were both producing millions in revenue and were profitable. mCig retained a 10% ownership in Omni in order to share in the company's success. mCig's (and VTCQ's) CFO, Mike Hawkins, agreed to stay on as CFO of Omni for the first year and things seemed to be progressing smoothly. Once Hawkins left, however, things started going downhill as Andrey Soloviev, Omni's CEO, refused to hire a replacement and stopped filing timely financials.
Nevertheless, at the time of the merger, I and others assumed that LX Retail would eventually fold the rest of its operations into Omni and do a share restructuring to reduce OMHE's outstanding shares. This still makes sense as the most likely way to save the company and it's the basis for the latest PR.
Unfortunately, there may be other considerations. We don't know what the current state of OMHE's debt is. If, as reported, they sold Malecon's assets to Wallgreens, perhaps they were able to pay it off and they may have a surplus to work with. Another problem is that the company has never been able to produce audited financials. This could have something to do with the fact that the pharmacy was a private company for 40 years with slipshod financial accounting before it was purchased by LX Retail. Finally, Andrey Soloviev has lost all credibility with shareholders as the company's CEO. Until he's replaced and/or a new credible CFO is hired, shareholders should remain suspicious of any company announcements.
I don't know whether this latest PR is legitimate or part of some pump and dump scheme. However, it does make sense and seems credible, as it did when LX retail first created Omni. The management at LX retail and mCig can't be very happy with how things have gone down and could be pressuring for some action. This is still a very risky investment and a big gamble. I just wanted to give folks some background to help with their decision.
