Zoompass Inc. (OTCMKTS: ZPAS), the Fintech business, which we covered in a very recent article, has been on an impressive bull run. The chart shows a steady climb from $1.50 to $3 in a month's time. Due to this impressive price action, Thus, we believed that a follow-up article was necessary to explain the move.SourceNew Developments that moved the share priceProducts will be sold using vending machines, so that other customers will get to know the products.On April 27, 2017, the company communicated a new agreement signed with Canadian based UVend Group of Companies ("UVG"), under which Zoompass will use the vending solutions of UVG to sell its products at key retail locations. We believe that the new collaboration is very relevant as the company will count on the expertise in self-serve solutions developed by UVG that will help sell Zoompass' products any where and at any time.SourceZoompass President, Steve Roberts, stated the following about the news:
"UVend Group of Companies is Canadian based and is definitely the 'best of breed' when it comes to next generation Digital, self-serve kiosks for the resale of devices and accessories. It follows the trend for retailers' needs of reducing staff costs as well as reducing overall theft of mobility devices and products as a whole. We look forward to working with UVG on an international basis in both traditional and non-traditional locations." Source
In our opinion, traders believe in the technology and capabilities of the company's products. So, if the company is hiring new distributors that will increase the selling network, they will push the share price up as they expect the revenues to increase. In addition, there is a key aspect in this business. Customers will copy other customers who use the payment services provided by the company. Thus, the company needs to show the products to everyone. The fact that the company will sell its products in very crowded areas will help increase the visibility, which will increase the revenues of the company. We believe this was a very smart move by Zoompass to bring on board UVG. The market agreed with us as well and pushed the share price from $2.75 to $3.00 as a result of this press release.Annual report - Insiders own everything and don't want to sell itThe annual report was released on April 24, 2017, which had a big market reaction. In our opinion, there were several reasons. First of all, but not extremely relevant, was that the company could not release it before, and it noted it in another SEC Filing. Companies that file due documents late are usually avoided by savvy individuals. The general idea is: the documents are late, so the documents will be bad.We reviewed the balance sheet in the previous article, but we believe that the previous numbers did not include the new numbers that resulted from the reverse merger executed in 2016. We found out that the balance sheet became even cleaner after the transaction. These are the assets that the company reported. Note the large amount of cash; $2.4 million:Period Ending12/31/20163/31/20163/31/2015Current Assets (All numbers in thousands)Cash And Cash Equivalents2,438.7540.2543.507Short Term Investments---Net Receivables63.27463.27463.274Inventory27.8527.8527.85Other Current Assets144.44144.440.75Total Current Assets2,674.3180.2544.257Long Term Investments---Property Plant and Equipment54.5191.2071.9Goodwill---Intangible Assets8,627.3498,627.3498,627.349Accumulated Amortization---Other Assets---Deferred Long Term Asset Charges---Total Assets11,356.1861.4616.157SourceThe following numbers represent the liabilities. Also note that the amount of liabilities is small as compared to the amount of assets.Current LiabilitiesAccounts Payable474.5084.6210.751Short/Current Long Term Debt-6.16.1Other Current Liabilities1,840.210.0920.092Total Current Liabilities2,314.71810.8130.751Long Term Debt---Other Liabilities---Deferred Long Term Liability Charges---Minority Interest---Negative Goodwill---Total Liabilities2,314.71810.8130.751SourceWe could not find company's main shareholders in the Yahoo Finance page. However, hidden in the 10-k, we saw that the company is owned by insiders. Have a look:
Title of Class
Name of Beneficial Owner
Office, if any
Amount of
shares
controlled
Percent
of
classs
Common Stock
Rob Lee
Chief Executive Officer and Director
15,210,668
38.1%
Common Stock
Ted Yew
Secretary and Director
4,875,997
12.2%
Common Stock
Steve Roberts
President and Director
574,497
1.4%
Common Stock
Jon Tondeur
Director
1,279,999
3.2%
Common
All officers and directors as a group
62.7%
Common Stock
Mississaugas of the New Credit
3,000,000
7.5%
SourceIn our opinion, the fact that the company is owned by insiders and did not register any shares for sale should be seen as a good thing.ConclusionIn our opinion, the agreement with the vending specialist, UVend Group of Companies, will help increase the company's awareness and will be very beneficial for the top line going forward. In addition, we also appreciate how the company has been funded; the large amount of cash and the little liabilities on the balance sheet. Finally, the fact that insiders own a large percentage of the company and did not register any shares for sale is seen as a big positive to the market and the company's shareholder base. To sum up, the news of the company, the financial situation and the type of stake holders inside the firm are all very good factors. Thus, we understand the recent rally in the stock and we believe this could be the early innings of a long-term bull run. We will be updating our subscribers as soon as we know more. For the latest updates on ZPAS, sign up below!Disclosure: We have no position in ZPAS and have not been compensated for this article.
Discover Hidden Gems
Don't miss the next big opportunity. Subscribe for timely alerts on potential market movers.
