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1PM Industries Inc. (OTCMKTS:OPMZ) Making Progress

1PM Industries Inc. (OTCMKTS:OPMZ) Making Progress
Written by
Jarrod Wesson
Published on
May 11, 2017
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On March 15, 2017, we initiated coverage of 1PM Industries Inc. (OTCMKTS:OPMZ) by putting out this piece. We wrote that the company had changed its business model and that traders had celebrated it by pushing up the company's share price. Since this first piece on this name, the company has put out some new communications. Thus, we believed that an update was necessary. Have a look at the recent share price movements and note the large amount of volume in the last three months:SourceWe encourage the investors to first check the initial article, because we will not again cover here the background of the company. Once you have done it, have a look at what happened recently.Recent DevelopmentsOn April 3, 2017, OPMZ noted that the company had signed an agreement with a third client for the year 2017 in the nutritional supplement sector. What does it mean for the shareholders? Good news as more clients means more revenues, and more revenues at the end will increase the next quarterly EBITDA, which is what bankers and traders use to value any business. The press release was full of comments from business executives, that we encourage readers to look, but the most interesting words were said by the CEO of OPMZ, Joseph Wade:

Our business is growing at a much faster rate than we originally expected. We are now under contract with a third client in the nutritional supplement industry. This company has tremendous upside and we are excited about their potential for rapid growth. As far as revenue generation is concerned, $400,000 USD is a conservative expectation for each of our accounts, however with this one, it could be much more depending on the on-going requirements and needs of this particular client.” Source

In addition, the CEO made a comment regarding the convertible debt of the company:

“We have also made tremendous progress with the convertible debt that we have left on the books. Going forward, we have no reason to add any additional convertible debt as incoming revenue is more than enough to support our ongoing business activities. Convertible debt will become a thing of the past in the near future.” Source

We assessed the convertible debt of the company in our last article by saying that the next revenues will be used to pay it. However, we were afraid since some companies pay the convertible debt and issue some more some months later. The fact that the CEO just said that the company will not need to do that is a very good factor. Shareholders should be very happy with this news.On May 1, 2017, the company put out another press release answering some questions that were raised from the investment community. You can check the whole press release, but here are the most important answers here. Joseph Wades, CEO of the company, said the following to answer why the company doesn't disclose the name of its clients:

"We improve upon the process with each new client, but remember that our team started in the private sector for several years before taking the operation public and with that came a lot of trial and error. In one case in particular, word got out that a client that had a significant deal in the works and the company that they were in negotiations with began to receive a ridiculous amount of phone calls and it killed the deal. That was the day that we decided that it was not in the best interest of the company or our clients to reveal too much information at the outset. " Source

Company COO, Matt Billington, also answered in the following way to a question regarding the company's share count and its convertible debt:

"In the short term, we still have a relatively small amount of convertible debt on the books, but legally, it still required a recent increase in our authorized share count well beyond what we’ll ever use. Once that debt is settled the share count will stabilize as well. From this point forward, we will only take on additional convertible debt under the criteria where it is at least $1,000,000 being offered and where we can expect to drive 5-10 times top line revenue growth per dollar received within 18 months. Additionally, there will be a holding period of six months and ideally would only be convertible in traunches once every six months". Source

In our opinion, these were the more relevant questions addressed in the press release. The share count question is the typical question that start-up companies receive. In our opinion, the issue was explained much better than in the case of other companies. Regarding the disclosure of the clients, we believe that the type of business run by this company is quite special and we understand it. However, we believe that OPMZ should help investors understand the types of clients that the company is dealing with by disclosing, for example, its annual revenue or any other business metric.ConclusionThere are several things to like in OPMZ. The company seems to not be having any difficulties in finding new clients. Additionally, we appreciate that the company cares about its shareholders and answered some of the questions that investors had (For example, you can find some in the Yahoo Finance forum). To sum up, it seems that OPMZ is doing things right. We will be updating our subscribers as soon as we know more. For the latest updates on OPMZ, sign up below!Disclosure: We have no position in OPMZ and have not been compensated for this article.

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