$OPTI is more attractive than I thought and poised for a big pps surge/correction imo.
I am not a professional trader and maybe wrong about some stuffs from lack of knowledge and understanding of stock market.
And I also have been very busy personally these days, and am scrambling through information to make this post, so excuse me in advance for not being so organized.
Here we go,,
Company originally formed in 2012 in WY as a pharmaceutical company and had some pain relief products for pets and operated under a ticker GRMD.
In Aug 2017, company changed its name to Optec International, Inc and the ticker to OPTI.
In June 2018, company entered into an exclusive licensing agreement with Optimized Fuel Technologies for the right to exclusively distribute and sell their products including “Optimized Fuel Maximizer” (<—- patented, “plug & play” aftermarket products to save on fuel cost and reduce emissions) both in America and internationally and paid roughly $610,000 with company shares. So far $100,000 approx has been paid off.
And the new CEO for OPTI is former CEO of OFT (Optimized Fuel Technologies)
In Aug 2018, and this is IMPORTANT.
OFT (Optimized Fuel Technologies) entered into a contract with a “nationwide automotive distribution company” that desired to purchase OFT’s products in manufacturing basis. Approx $40 mil in sales is expected for OFT in first 3 years from this deal.
Since OPTI has the distribution rights for OFT’s products, the “nationwide company” made a 5-year royalty contract with OPTI that is expected bring approx $10 mil for OPTI in the first 3 years.
OFT also has other eco-friendly solar powered led’s that OPTI holds the distribution rights as well.
Now, for the revenue wise, up until Q ended in 3/31/2019, they were selling one of their products but still in the final testing (assuming they were doing this before mass producing and distributing in huge quantities) and have two more application with State of California (to be EPA approved(?)) for other products.
I assume such a sizable contract takes time to be put in place, making arrangement for assembly, delivery(freight), accounting, etc.. we have not seen the expected revenue just yet on Q ended in 3/31/2019.
But for the Q ended in 06/30/2019, which by the way is the company’s fiscal year end, 10-K is expected to be reported from now until sometime in Oct 2019, which we might start seeing some revenue from this contract printing on their report.
If this deal is indeed real and the company start bringing that kind of revenue, we should be 10x - 100x from current pps level (pps of $0.0335 at the time of this post)
Reason why I set the pps target to be so broad is that we need to see what the gross margin and net will be from this revenue.
What I really like about OPTI
- relatively small liabilities compared to other OTC emerging growth company.
- company is very cautious and tries to minimizes expenses. (CEO is only paid $3k-$4k a month. Chose to go “Alternative reporting recently to save on legal fees to be SEC and FINRA compliant)(but will still be fully audited, fully reporting through alternative channels)
- from its name, ticker, industury change from 2017, implemented and excuted new business strategy really fast and now is about to bring in some real revenue, $ in the MILLIONS.
As for the recent pps tanking, i suspect the conv note holders are to blame. You can see from mid Aug, relatively small volume walked it down from $0.15 to current level.
It is my understanding that these note holders need the pps to be low as possible for them to convert to more shares for the same amount of money that they lended. And those are the ones that will actually drive it back up high before cashing out. <—- I maybe wrong about this theory. Please enlighten me if I am.
Did I mention? As the company inevitably secures more funding (to operate) from these lenders, they have been cancelling their own shares directors owned, (i have found 8m shares being cancelled in the filings I have read so far) and reducing outstanding shares, either to show their faithfulness, or to minimize the negative impact to shareholders value. Now this is some real faithful company !!
Again, I cannot tell what the fair pps should be at until we see the 10-k to even see if the revenue started flowing in from that contract. And if so, how much are they grossing and netting from the revenue.
One thing I can tell you is, OPTI should not be sitting here at $500k market cap. Should be at least be 3x - 5x that.
This post is mixed with facts found on news and filings, and my opinions. If I am wrong about something, please advise.
Thank you for reading and good luck to all ;)
