Vita Mobile Systems Inc. (VMSI) filed an above market financing for an undisclosed amount at a price equivalent valuation of $150 million which works out to approximately $.16 per share give the fully diluted assuming 932,515,132 shares outstanding. This represents approximately a 100% premium over the prior closing price of $.0825. VMSI has a killer application that allows users to remain anonymous and to share their pictures according to geo location. The app makes capturing life’s moments easy and searchable like an archive based on geo location platform. Their artificial intelligence engine works with other engines like Facebeook (FB), Twitter (TWTR) and Snap Chat (SNAP).
VITA is going to announce further details of the financing such as the dollar amount in the Q1 filings. Although the amount is unknown it’s reasonable to speculate that they got at least $1.0 million to execute the first part of their business plan but could have received up to $5.0 million. The rationale behind the funding is that they needed to expand head count and the infrastructure to handle the coming onslaught of data about to pass through its system. The key takeaway is that the beta launch is coming really soon after they do a couple of key hires and nail down their backend support contracts for storage.
This is a non-toxic equity deal which mean investors will be subject to standard Rule 144 lockup provisions of a 1 year hold. This above market financing really is a boost for the company. Given the valuations of other social media companies in the billions the company represents a real value in the area of social media. It equivalent to getting into the next Facebook a the incubation stage. Our near term price target is $.25 on a valuation basis as we expect the beta launch to come soon and with their Artificial intelligence in place we expect it to go viral.
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