Petemantx's summary of 8/5/15 XXII Conference Call
I tried to just sticky Petemantx's post but since it was more than 48 hours old, silly IHUB rules wouldn't let me. I had missed the post earlier and, since it was so comprehensive, I didn't want anyone else to miss it also. So I cut & pasted PM's post below and I will sticky this post instead.
So here is his post, in full, below .....
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by petemantx
Post #27060
Wednesday, 08/05/15 06:51:18 PM
I listened to the call even though I currently own no stock so I will try and give a non-biased report of what I heard.
1. Money availability? Henry said XXII has enough for the next year and this did not include any possible non-recurring income such as a BAT payment (he said it could be tomorrow, next month, next year, or never but always possible). He said the Asian deal involved a front end payment of about $8MM. He mentioned maybe one or two more areas for added income but can't recall them. He said XXII ended the China deal with Crede (sp?) for non-performance but he expects a new deal prior to the end of the year. Thus, he said he saw no expectation of the need to raise money for at least a year and since he was a stockholder he wants to see as little raised as possible. Sounded very positive to me.
2. Contract mfg will be picking up as excess capacity at NC plant still available.
3. Biggest markets for Red Sun so far are the West Coast and Colorado. Same as he saw for the New Mexico brand he marketed.
4. Europe rollout in UK, France, and Italy delayed until Fall due to packaging but they could have had them out by now but due to most Europeans taking the summer off they want the most bang for their buck with the rollout and determined they would get a much bigger splash in the Fall so the delay right now is due to a decision by mgt.
5. There has been a lot of interest in our IP portfolio by non-tobacco companies in Henry's response to a question about someone like Midland-Daniels buying the rights to Verfalo.
6. Henry said there was still a lot of costs associated with new operational requirements in prior qtr and these should start decreasing so margins should start heading higher.
7. Henry wouldn't say anything about Pandolfino case but didn't seem worried about him creating havoc.
8. FDA submission for low nicotine product will be done sometime in the Fall and they are hoping for 12-18 mos to get a positive reply. This product is not like a drug going thru the FDA so not nearly the testing requirements and resulting long term needed to get a positive reply.
9. Henry was quite happy with the enhanced IP portfolio resulting from this qtrs actions.
10. Red Sun getting reorders but Henry isn't sure if it is to restock current sellers or distributors are adding more sales outlets to their market.
11. The recent $6MM placement was with an individual who had been acquiring the stock and had been in contact w/ Henry for a couple of years and he finally determined he wanted in for quite a sum so Henry felt very comfortable placing the stock in his hands as he is a true long.
I thought the quarterly report was extremely positive as many question posers from the financial industry congratulated Henry on the fine results this qtr.
Seemed to me that everything is progressing nicely and I did not see anything negative on the horizon. For investors, XXII looks great. For traders, may be a little bit for them to be happy. Henry did state he expects the price to rise as fast as it came down so when XXII starts moving it should continue to keep moving northward.
Falling price IMO are traders/shorters still playing games and doing their thing. Know what you own and this looks like a damn solid investment - though the returns may still be 3 qtrs out or further. Last statement is just my WAG.
