Borislav Tonev

Ominto Inc (OTCMKTS:OMNT) Breathes Again

by Borislav Tonev September 22, 2015

Back in 2014, Ominto Inc (OTCMKTS:OMNT, OMNT message board) didn't look like the most appealing investment opportunity on the OTC Markets. The company was called DubLi and its headquarters was located in a virtual office which wasn't exactly boosting the credibility. That, however, was the least of the problems.

Its business plan, for one, was making quite a lot of people a bit uneasy. In fact, these people claimed that the company is nothing more than a pyramid scheme. There were some more issues.

DubLi was having problems keeping up with its reporting obligations and the SEC was issuing warnings that if the management team don't get their act together, the stock might face suspension.

All in all, the company's situation resembled a soap opera that has been scripted by the master of the anti-utopian novel – George Orwell. Unlike an Orwellian novel, however, DubLi, or Ominto as we know it today, might just be in for a happy ending.

Although the name and ticker symbol were changed a couple of months ago, the business plan remained the same which means that there is still some controversy around the company. Nevertheless, some new people are now at the helm and they seem to have a few big ideas. They announced on Friday that they want to raise an unspecified amount of money by selling some stock and warrants and they also said that they have filed an application for listing the stock on NASDAQ Capital Market.

Buying OTC shares right now and selling them on one of the national exchanges later is an appealing concept for penny stock investors. That's why, after two pretty intense sessions, OMNT reached a close of $0.185 per share yesterday. That is a far cry from the levels the stock occupied when we last wrote about the company, but it is still a hefty 85% above the price just a week ago. Is the massive interest really justifiable, though?

Fortunately, OMNT is no longer delinquent in its filings which means that we can open the latest 10-Q and get an idea of where the company sits at the moment. Here's a summary of the most important figures recorded on June 30:

cash: $2.4 million
current assets: $10.8 million
current liabilities: $25.4 million
quarterly revenues: $7.8 million
quarterly net loss: $1.2 million

As you can see, the revenues are quite solid and they seem to be growing. It should also be noted that about half of the current liabilities consist of deferred revenues. The net loss is still pretty significant, though, and the shareholders and potential investors will need to wait and see what the NASDAQ Listing Committee makes of it.

While they wait for a decision, they might as well keep in mind that between May and August, OMNT issued no less than 65 million shares at a rate of $0.10 per share. In addition to this, the company gave away some warrants, a portion of which are exercisable at just $0.05 apiece. Potential investors should also bear in mind that the majority shareholders are contemplating a reverse split, the ratio of which should be decided upon in due time.

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