Georgi Kamburov

One World Holdings Inc (OTCMKTS:OWOO) Takes A Step Back

by Georgi Kamburov September 18, 2015

At the start of the month the stock of One World Holdings Inc (OTCMKTS:OWOO, OWOO message board) suffered a rather painful drop as it crashed from $0.012 to $0.0066 in the span of just three sessions. This week, however, the company managed to recover the majority of its losses thanks to a surge of 24.6% on Wednesday. In early trading yesterday the positive momentum carried the stock to a high of 1 cent but this is as far as it went. For the rest of the trading day OWOO were slowly sliding down closing 4.6% in the red at $0.0082.

In the coming weeks though the hype around the company could get stronger - the company's Prettie Girls! Tween Scene Dolls are expected to hit the shelves of over 2900 Walmart stores by the middle of October. According to OWOO's CEO as of August 10 retail purchase orders for $855 thousand had been received. The company is looking to further expand its toys with a new line of baby dolls planned for the 2016 Spring retail season.

If everything goes according to plan OWOO will be rapidly moving in the right direction but getting too excited might be quite dangerous. For now the red flags around the company remain both numerous and extremely serious. In fact, if you open the latest financial report the numbers you will find inside might give you quite a scare. At the end of June OWOO had:

• ZERO cash!!!
• $608 thousand total current assets
• $24.9 million total current liabilities!!!
• $833 sales
• $8 million net loss

Just two and a half months ago the company didn't have even a dime in cash while the working capital deficit was standing at more than $24 million. Not to mention that nearly the entire amount of the reported liabilities consisted of convertible debt with close to $2 million in convertible debentures and $19.9 million derivative liabilities.

The resulting dilution of the common stock has been plaguing OWOO for years and at the start of 2014 they were even forced to implement a massive 1-for-750 reverse split. Since then, however, millions of fresh shares have seen the light of day at discounted prices - 167 million shares priced at an average of just $0.004 for the first half of 2015 and 29 million shares with an even lower price of $0.001 per share for the period between June 30 and August 14. The quarterly report states that as of June 30 the convertible debentures and related accrued interest payable were convertible into approximately 2,514,516,000 shares of common stock.

As we said in our previous article OWOO entered into a Joint Marketing and Development Agreement with Tonner Doll Company, Inc. Under the terms of the agreement Tonner will provide a $2 million financing to OWOO but they will have to  raise the money first through a planned $5 million round of private funding.

The sheer amount of the potential dilution should not be taken lightly. OWOO will have to put their debt under control and the $2 million financing from Tonner, when they eventually get it, could help them do exactly that. The increased revenues from the sales of the Tween Scene Dolls should also help. It is up to you to decide if this will be enough to offset the millions upon millions of discounted shares. 

Comments 0

Type the characters that you see in the box (5 characters).