Electronic Cigarettes International Group Ltd fka ECIGQ

[Sooah]

lowman, it is extremely important for ECIG or any company to be cash flow positive. To be revenue generating is not enough--the Company has to be cash flow positive and this has to be achieved from its core operations. Obviously, the company has to generate enough revenues to fund all of its operating activities and hopefully generate levered cash--this is the expectation here. This is point one.

A more important point is that positive cash flow (or the amount) is the measure that will determine whether the Goodwill in the balance sheet will remain or not--did ECIG really pay a fair price for the acquisitions or are these Goodwill fluff?......

If ECIG is not able to generate the expected cash flow, the charge goes against Goodwill in the form of impairment charges to the income statement hence we're looking at asset write downs at the end.

For the quarter ended, ECIG finished with more cash than it started with HOWEVER we really can't make a fair assessment of its cash flow because of all the derivative accounting that took place-- these are really non-cash adjustments that must nonetheless be included. We must look at future quarterlies in order to assess this better.