First Global Data (FGD.V) is a fin-tech enterprise focused on mobile payments and cross border remittances. Through its mobile app (VPayQwik), FGD.V enables electronic payments via numerous channels: Business to Customer (B2C), Business to Business (B2B), and Peer to Peer lending (P2P).
Coverage was initiated on May 3 with notes on May 10, June 15, and September 20 and December 17. Since then, the following releases were issued.
Jan. 4 - Obtain money transmitter license for Oklahoma and Oregon.
Jan. 5 - Updates on Series G Debentures: $3.4M from Series G Debentures are back on the books.
Jan. 12 - Insider purchase: Peter Lacey - 689K at $0.215 cents.
Jan. 16 - Binding MOU with China Smartpay. Remittance for WeChat in US. WeChat users to shop at a US retail location, and purchase goods using the funds on their WeChat mobile wallet. FGD.V retrieved money from WeChat to ensure that each transaction are in compliance.
Jan. 25 - Granted money transmitter license for Ohio and Kentucky.
Feb. 1 - Agreement with Tenpay Payment Technology Co. Ltd. FGD will work with Tencent to expand merchant processing and settlement services in the USA. The service will enable existing WeChat users to make payments from their WeChat mobile wallet at retailers and merchants.
With respect to the sourcing and on boarding of retailers, the costs to the Company will primarily be adding additional sales associates to source and sign up merchants. First Global will always maintain a direct relationship with each retailer and merchant. The Company will be responsible for the implementation and integration of the WeChat mobile wallet using a variety of technical integration options at the merchant location.
Feb. 8 - Announce a private placement (Non-Brokered) $5M at $0.25 cents - warrant at $0.40 cents.
Mar. 2 -CFO (Alli, Nayeem) acquires 563K worth of shares between $0.23 and $0.26 cents..
Mar. 29 - Receive money License for Connecticut.
After the Q3 Earnings, FGD.V consolidated between $0.215 and $0.24 cents. Insider purchases, announcement of new money licenses (OK, OR, KY, and OH), along with the MOU with China SmartPay sustained valuation.
The Tenpay Payment announcement was followed by the requested clarification from IIROC started a downward trend. At issue, FGD.V's announcement did not specify if there was a change in business model. IIROC did well to intervene because FGD.V subsequently admitted that it had to take on responsibilities outside their current practices: i.e. subscribe merchant and ensure that POS are able to accept WeChat transactions.
'FGD will be responsible for the on boarding of such retailers and merchants including the performance of all necessary due diligence on these parties. The costs to the Company associated with this new line of business will be (i) the cost of integrating the company's technology with that of Tencent and (ii) the cost of sourcing and on boarding the US retailers." - Feb 2, 2018 releases titled: First Global Clarifies its Agreement with Tencent Payment Company.
Thereafter, the $5 M (non-brokered) private placement was announced. Twenty days later only $1.8M (36%) of the total amount was raised. As time went by, no update on the private placement were provided. In addition, the "trade war" rhetoric with China took a hold of the market and accelerated the slide on the stock price culminating to a 52 week low of $0.135 cents.
Looking at the trading activity from March 19 to April 6, 2018 shows that the selling and buying is relatively stable across top 5 banks and brokerages. Also, Anonymous does not account for a disproportionately high sell ratio or volume which is somewhat comforting.
One characteristic of the slide in the stock price is that the volume has been relatively low, compared to November to January.
However, the delay in closing the private placement (now 2 months since the original release) is certainly worrisome. The capital is required by FGD.V to move the deal with Tenpay forward. Currently FGD.V is trading at $0.14 cents, and reaching its financing goals will be even more challenging.
Last year's private placement of $10M at $0.70 cents has negatively impacted FGD.V's credibility. Since then FGD.V's valuation dropped as it has fail to achieve its revenue target ($140M). Moreover, ongoing known issues such as the need to recruit a new CFO and an outstanding lawsuit does not help.
It's ironic that the Tenpay agreement brings FGD.V outside of its core competencies and potentially impacting other projects which steadily drive revenue. However, it could be that FGD.V's factors in that part of the Tenpay Payment deal is a "loss leader" for which it can later capitalize on.
We certainly hope that FGD.V close this placement or find a way to reverse the current trend in the stock price. Right now, the FGD.V is trading like the TenPay deal is non-existent. Time for FGD.V to show some resolve and execute on the current path it has set for itself. Bottoms up!
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