Borislav Tonev

Major League Football Inc (OTCMKTS:MLFB) Reaches the $1 mark

by Borislav Tonev February 18, 2016

The 50th Superbowl took place no more than eleven days ago and a 30-second commercial clip aired during it cost a truly outrageous $5 million. These sort of figures show (not that anyone has any doubts about it) just how huge the sports industry is at the moment. Predictably, there's no shortage of enterprises willing to capitalize on it. As you have probably guessed by now, Major League Football Inc (OTCMKTS:MLFB, MLFB message board) is one of them.

The business plan sounds interesting enough. It involves the creation of a football league whose schedule won't interfere with the big NFL boys. A launch date has been set for April 2016 and the smaller off-season league is supposed to have two main advantages: on the one hand, fans will be kept entertained, and on the other, smaller teams will have the chance to gain some exposure.

The thing is, if you are to start making money from sports, you need to invest quite a lot of it, and if the latest 10-Q is anything to go by, MLFB doesn't have a whole lot of money:

  • cash: $16 thousand
  • current assets: $860 thousand
  • current liabilities: $1.5 million
  • quarterly revenues: $24 thousand
  • quarterly net loss: $2.1 million

With the planned launch date looming and with a balance sheet as horrific as this, success is anything but guaranteed. The management team, however, are on a mission to solve the financial woes.

Yesterday, they announced a letter of intent which, if finalized, should provide MLFB with a grand total of $120 million in funding. It will involve a $20 million equities purchase agreement (the terms of which were not disclosed), and a $100 million line of credit, and some investors reckon that this will solve all of MLFB's problems.

Yesterday, the said investors traded nearly 180 thousand shares and they pushed the ticker 25% up for a close of $1.05 per share. The surge means that MLFB is back out of sub-dollar land for the first time in over four months, and the huge volume means that many people's money is on the line.

The thing is, some of these people might be ignoring the fact that this is not MLFB's first attempt at raising cash. Last year, another securities purchase agreement was announced, it was later amended, and it was supposed to be closed before the start of February. Nothing came out of it.

People also seem to be ignoring the fact that Asian Global Capital Ltd, the “recognized international investment firm” that is supposed to provide the $120 million, appears to have very little internet presence outside MLFB's press releases.

Last but not least, investors seem to be ignoring the fact that in October of last year, MLFB issued a little over 2.3 million shares as a conversion of debt at $0.30 a pop. They don't seem to be bothered about the fact that in November the company issued a $100 thousand note which is convertible at the same price, either.

Time will tell whether their nonchalant attitude towards the toxic debt will come back to haunt them.

Comments 0

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