The stock market is a wonderful thing. Owning a stock that nearly triples in a day… is an amazing thing. That is what we saw in $IMTV today as it closed at ($0.0027).
Why the run up? Some think profit takers in $OTTV jumped on the next sub-penny, especially since it had TV in the name and ticker. Like sub-penny $OTTV the day before, $IMTV followed suit with a feverishly busy message board (1200+ daily posts) many full of hype, and a few shouting warnings. Weeding through over a 1000 posts is not easy. If you are LONG, hyping and talking up a stock you already own is like the GEICO insurance commercials say, “It’s what people do”, but it was the negative posts that caught my attention.
In Imagination TV’s latest ANNUAL filing (March 31st) Section 10 goes on to talk about the authorized count and how their debt would equal 61.4 BILLION shares at the exercise price. It cannot be done. So they came up with some fancy accounting and called it a “derivative liability”.
The June 23, 2017 Press Release speaks of “debt restructuring” with 1 of the holders for $50,000. That is good for the company, like the CEO stated, but I believe its the one that they owe $69,490 to. There are still 3 other debt holders owed $119k, $208k and $218k (convertible amounts with accrued interest) never mind the warrants (5.5 billion issued, convertible at ($.00001). Now if you had warrants, the stock price was “270 times” higher (.00001 -vs- .00270), would you convert them and sell them? Oh wait… you can’t! There is only an authorized 4 billion, an there are 5.5 billion in warrants alone.
So what happens? That’s a great question. Can $IMTV still go up tomorrow? It can, but I have a feeling the debt holders will be banging on the door with their hands out looking for stock or to sell into run up to recoup their money and some. How does a company fix a debt issue like this? Another great question… unfortunately, more likely than not, the company may have to reverse split the stock and/or increase the authorized share count. Neither of which are very positive.
I know many will not appreciate this article. Some may be thankful. I feel for the company and it’s CEO trying to do the best he can with what looks like “toxic financing” in the past. Tomorrow’s trading will be very interesting.
About The Company
Imagination TV is a diverse digital media company with a growing portfolio. Imagination TV delivers integrated digital marketing solutions, as well as the latest in content marketing, video, display and mobile advertising solutions, social intelligence and reporting across all screens. With unmatched local-to-national reach, Imagination TV is a one-stop-shop for agencies and brands that want to effectively and efficiently reach their target audiences on all screens.
Disclosure: No position, No compensation.
