Sub-Penny Spotlight on On4 Communications Inc (OTCMKTS:ONCI)

Sub-Penny Spotlight on On4 Communications Inc (OTCMKTS:ONCI)

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On4 Communications Inc (OTCMKTS:ONCI) is a deep sub-penny stock trading on the pink sheets with very little in the way of a consistent business model over recent years. The stock has been unusually active of late, and we thought we would give it a quick once-over. There are only two important stories in this stock right now, as far as we could see: first, the company announced a share retirement of nearly half the then-three-billion OS. That was in Mid-November. Then, just released in the body of their annual report, it was disclosed that the company hasH taken on a 49% equity/ownership stake in Family Mobil Safety Marketing, the distributor of a safe driving App.

Traders will note 78% piled on for shareholders of the company during the trailing month. Market participants may want to pay attention to this stock. ONCI has a track record that includes a number of dramatic bounces. In addition, the stock has registered increased average transaction volume recently, with the past month seeing just shy of 130% beyond what we have been seeing over the larger time frame.

On4 Communications Inc (OTCMKTS:ONCI), incorporated on June 4, 2001, intends to become the onsite provider of certain mobile home care dental related services to senior citizens in their senior assisted living facilities where such onsite services are not being provided.

The Company is also focused on providing other medical services, with the additional focus of acquiring and/or merging businesses primarily operating in the healthcare industry. The Company was engaged in providing prepackaged software. The Company has not generated any revenues.

According to company materials, “On4 is a holdings company with an aggressive focus of acquiring proven and profitable businesses, especially those businesses operating in the $1.7 trillion U.S. healthcare industry.”

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As noted above, on November 4, 2016 the Company announced its intention to acquire a 49% equity/ownership stake in Family Mobil Safety Marketing, the distributor of a safe driving App. Under terms of the deal, FMS and their global distribution network of the drive safe app will remain fully operational and continue as a standalone brand following the close of the acquisition.

According to selected text from the ONCI annual report, “the FMS revolutionary safe driving app is currently generating approximately $35,000 in average monthly revenues, and this is expected to increase recurring monthly revenues as organic traction amongst auto dealerships and auto insurance companies begins the next stages of growth.

“The FMS safe driving app is intended to do a number of things to keep your attention on the road while you’re driving and not on your smartphone. As soon as the FMS app detects that the vehicle’s wheels are in motion the App will be programmed to automatically shut down all voice and social media for safe, distraction-free driving.

“The safe driving App by FMS will feature 3 key components as follows: First, the app will automatically enabled as soon as you start driving and will automatically reply to any incoming text messages in a way that’s similar to an out of office message, so the text sender knows you’re driving and can’t reply right now. Second, it will silence audio tones for texts, emails, and phone calls. Third, it will block Web browsing, texting and outgoing phone calls, except for emergency 911 calls.”

Otherwise, the company has very little identity in terms of operations and seems to exist as a sub-penny trading vehicle in a void of actual “business”. It is possible it will have operations at some point.

The share reduction is obviously arithmetically bullish, but doesn’t really address the issues that the stock faces as far as balance sheet concerns. Some kind of dilution seems inevitable here.

Currently trading at a market capitalization of $4.5M, ONCI has very little cash on the books, which stands against total accumulated debts and liabilities of well over $2M. It’s hard to imagine a more troubled situation on the balance sheet given no current or immediately foreseeable revenues on the horizon. That said, the market seems to be sniffing around this stock a bit here and some new details may be forthcoming. As more color becomes clear on the name, we will review the situation and update our take. For continuing coverage on shares of $ONCI stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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