is working (too hard) for a living
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Would love to get the 'updated' Bellevue/Thunderbird COS report in an 8-K, as promised, so it can be evaluated.
Maybe EEGC hopes that it will first be accepted by potential funding sources, without critical third party review? I have to believe that anyone wanting to put $50M into this opportunity would do due diligence far beyond the resources of this board, so why the delay in posting the report??
One store a month is the current rate of 2012 expansion.
At 140K/year revenue, that means 2012 expansion will add a grand total of $3M to annual revenues, and let's be generous and say 10% margins so $300K in profit. Not real impressive for a company with a $20M market cap.
Shareholders need to see more store openings.
100 projected for the year, BCCI has opened four so far (two purchased from another company)? Projects to 12 for the year, a pretty big shortfall.
Meanwhile, where is the one New Jersey store announced a year ago, and where are the five stores announced in December for Q1 (first in February)
Perhaps answerered later by someone else, but my analysis of financials suggests that top management is not receiving salaries, but rather stock (whether options or actual shares, don't know) -- which also has the impact of overstating 'real' earnings.
Please provide links to document your assertion that EEGC has oil (excluding Mr. Bendall's car).
My belief is EEGC has only a lease to explore for oil -- and said lease is set to expire in less than a month. There is no guarantee of oil on the leasehold; and even if oil is there, there is no guarantee of that which EEGC shareholders care about -- commercially recoverable oil.
Similarly for coal -- where there is not even an exploration lease, or even an APPLICATION for an exploration lease (NBD 'proof of funds' not withstanding).
Right now, I think facts are on Oilsleuth side.
And again, a low volume day.
The only real volume related to this PR came in the 2 - 3 days BEFORE it was released. Someone got burned, you would think they would have learned by now.
My take on it:
- As others have said, need to see the alternative Bellevue COS report, so we can compare its thoroughness and assumptions to the RPS Energy Report.
RPS Energy report is still on EEGC website, new one is not. Not surprising given that the website also has none of this year's exciting PRs posted.
At least the new one has been promised for an 8-K; not sure why it could not have been attached to this one if it is complete.
- Most importantly, no mention of funding for the renewed forecast of drilling and seismic.
- My 'gut' says EEGC is simply trying to create an impression of a lot of activity at (surprise) the same time as they are arguing for lease renewal/extension. (To quote the Bard: 'Full of sound and fury, signifying nothing.')
No-one will fund drilling without that. And to anticipate Black Gold's demand to prove a negative -- so far, they haven't. And in clipso's vernacular, 'seems logical to me.'
Good job posting the information on Nemo
From the matrix, they do seem to have an 'M&A' consulting capability -- which suggests they are potentially yet another 'finder' in the grand (but not glorious) tradition of Libertas, Sure, Hunter-Wise, and TXO.
Certainly, nothing here to indicate a direct investment arm -- but at least they have a location in South Korea.
I said I believed NBD Partners have backed away from an investment.
The only proof I have is that outside of the $100K, they have in fact not made an investment. With less than a month left on the lease, they are unlikely to at this point.
Agree, second San Antonio store a positive.
But, consider projection for 100 stores. If it takes this long from store 1 to store 2 in a location, not clear how they expect to make 100 stores other than thru acquisition.
And, given poor BCCI cash position, they can really only buy failed stores (for future consideration) or with stock which dilutes.
And of course, we have the announced stores which haven't happened:
- New Jersey
- Phoenix - 5 (December announcement first in February, all in Q1)
Actually it was a 2% chance of bringing testable oil to the surface.
Percent of that being a commercial discovery wasn't stated, but by definition less than or equal to 100%. That is, not guaranteed to be 100%.
Interesting that second San Antonio location will be 'cash flow positive' within weeks, with invested cash 'returned in six months.'
That is good!!
But, I perhaps erroneously thought this was a franchisee, and was feeling good that the franchisee had decided to do a second store, even though it took a year to make that decision.
But, if a franchisee, then BCCI invests $0, in which case the BCCI comment about cash flow positive and invested cash would seem irrelevant, since BCCI would have no cash exposure.
Also, franchisee would have $25K up front plus 7% of revenues, a very different model for cash flow positive and investment return calculation.
Can someone advise if the new San Antonio store is a company owned location, or franchisee? And how that is the same or differs from the first San Antonio store?
Perhaps answered later, but IMO only way BCCI gets to sustainable $1 pps in CY 2012 on a different exchange is a reverse split (that is, one share now gets you less than one share. PPS currently $0.10, $1 pps says you get one share for current ten shares, everything else equal)
'Independent' research report published in December, when pps was .13/share, said 100 new stores projected to open in 2012, as of mid April only 4. Projects to less than 20 for the year, significant shortfall.
Pps down 30% since then, S+P up.
Look forward to the counter argument.
Maybe answered in a future post, but the 'independent' research report publicized in December said $11-$12K/month per location, so $400 max per day, as suggested by payperview.
Do you have other data to post?
Supply/demand WILL BE a factor for EEGC -- when we have oil.
PPS for EEGC will not be driven by today's supply/demand, except indirectly if it encourages investment in exploration.
To prove my hypothesis -- oil prices are up 20% since the beginning of the year. What has EEGC pps done? I think down 10%+ (including 40% down in the last month, after an uptick based on early March filings which, as usual, were full of sound and fury but signified nothing).
At this point, pps is driven far more by the likelihood of ever drilling for oil, than by current market pricing.
I am glad for your 100K shares, perhaps bought at a lower price. My 230K shares were bought four years ago at .157/share, so I am in a different place.
EEGC shareholders do not care about this article about current oil industry production woes:
- EEGC has no oil to sell; and
- IF EEGC does at some point have oil to sell in meaningful volume, it will be at least a year at which time a different set of economic and geopolitical factors will be at play.
If you think it is a relevant article, please forward to NBD Partners, Hunter-Wise, Libertas, Sure Capital, and all those other companies who have at some point, per EEGC PRs, promised to fund the drilling -- perhaps they will change their minds and open their check books!
Your message has caused me to go back to the Prime Equity Research report.
And, I will correct the franchise fee number, says $25K (versus my flawed $50K memory). That is payment to BCCI.
But that is only the beginning.
From PAGE 4 of the report:
Franchise fee $25,000 One-time fee
Royalty 6% Of shop revenues
Marketing fee 1% Of shop revenues
Cost to open one shop $100,000 One-time investment
Working capital requirement 30% as % of incremental revenues (Bob add: $12K/month revenue = $144K/year = $40K of working capital).
So, per the 'independent' folks, we have $25+$100+$40 = $165 (plus attorney and permitting fees) plus 7% ongoing.
That is the support for my assertions, what is yours??
Well, a standard disclaimer for sick penny stocks with no cash, nominal if any earnings, and negative working capital (surprise, that is BCCI).
But how many NASDAQ stocks have such disclaimers? And if so, how have their stocks performed since adding such disclaimers?
Re:
"Not bad" on the financials.
First, at this multiple, they need to be great. As the saying goes, you damn with faint priase.
But even then, I disagree with you, see my previous post.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=74078507
As always, I am open to alternative interpretations, just bring data not emotions.
Re:
The $1 minimum is true for NASDAQ, I worked for a company which got a delisting warning.
I actually thought it was 'better than that,' bought some stock at 0.75 and was Very Happy with the $4 buyout two years later...
BCCI will HAVE to R/S to attract institutional capital, most of those guys are restricted to investments over $5/share.
For those of you P&L focused, filing requirements will not be cheap -- but they will give us better insights into the financials. For example, where did the Q4 $1.2M add to payables and other liabilities (and shareholder deficit) come from -- how did it not go through the P&L??
How much are the officers of the company getting paid in cash (my guess is $0, they are being paid in dilution. Not necessarily bad, as BCCI is cash poor -- but without paying your key staff, hard to say the company is making money as they desparately want to say).
I can't argue your statement of what Barry told you in Tampa about the cost to get a franchise operating, but recommend that you read last December's independent research report.
Franchise Fee alone is $50K.
Then you have to spend money on the store's infrastructure, that is an estimated $100K. Could be more based on the need to upgrade the exterior to meet BCCI Standards.
Then, you need working capital to buy supplies, pay rent in advance, insurance, etc. I can't remember that number, think it was another $50K+
Don't know the cost of the permitting activity, but concerns about 'adult business' could cause delays at the least.
Then of course your attornies, etc.
Net: $25K is about 10% of what you need, up front. But if Barry offers to get you all set up for $25K out of your pocket, give him the $25K and send him all of the bills.
Once you start selling coffee, there is an additional 7% of revenue to support various marketing and admin efforts.
Your technical observations about stock price technicals have nothing to do with company fundamentals.
Trading a stock is quite different than buying a company stock for its prospects.
I can't comment on the former, but analysis of the latter is not encouraging based on performance and recent financials.
What do you think it costs to open a store?
Price per share of SBUX is irrelevant. Could have one share outstanding, and the price would be even higher. Or, 10 trillion and it would be much lower.
More appropriate is the market capitalization as a function of earnings, or sales, or growth rate.
Please share that informatoin.
Worth analyzing the financials.
What I see from Q3 to Q4 (correct me as appropriate).
- Revenue from $263K to $284K; 10%, really nominal in light of the 'kicker' provided by holiday sales per a company PR.
- Profit from $62K to $80K.
- Accounts Payable and Other Liabilities from $275K to $1.5M, or 4+ years of profits!!!
- Although mysteriously not in the P&L, the statement of shareholders equity shows a Q4 increase of deficit of $1.2M due an 'adjustment for non-recorded debt.'
Also telling, the issuance of 950K shares for 'professional fees,' perhaps to the 'independent' research company who issued the opinion on the company's stock potential back in December?
Wish the company filed 10-Ks, perhaps the mysteries would be revealed.
Haven't heard from batting and jerseyfish for awhile.
Wonder why?
First store for the quarter on April 2 (second one for the Texas franchisee, a good sign); we know second Montana store is a mere matter of rebranding, perhaps some new equipment.
Need 98 more this year to hit the 100 number. Or one every three days. Let's see where we are at end of April!!
Who wants the over on 10 new stores opened?
On 5? (To be fair, 100 for the year would be back-loaded, always the case, so five in the month would be good work after two in the first quarter including one purchased store).
Absolutely -- let's get a bidding war going.
Anybody have an update on the PHX deal, announced in Dec to include 5 stores: 1 open in February, rest by end of March?
One thing we can all agree on: absent new stores, this company isn't worth its current valuation. As pps = a view of future earnings, the current pps is clearly expecting more stores.
Pps only down 35% since the independent folks said 100 stores this year. With only a couple (depending on Montana counting) in Q1, I would argue company is even more overvalued than at end of 2011, when there was also visibility on reality show (although no production commitment; no change in that variable other than the pilot has been completed, and all we know is that it contains (surprise!!) hot tub scenes with visible Barista mugs).
Why wait for a location to open in your area?
Get a franchise -- with a plan for 100 stores to open this year, and only two in the first quarter, Mr. Henthorn might give you one heck of a deal to be EXCLUSIVE for your city/state/country!
Assuming you have the patience to go through the zoning process (there are some who think this 'theme-costumed' based enterprise is not fully above-board, so they resist); scratch (or a funding source) to pay for the franchise, the construction, the equipment, initial working capital; and a business model which can also afford the ongoing marketing fees which are a percent of revenue.
That was my earlier comment. In answer t earlier question, I don't know TXL/TB other than through your posts. But I'm guessing TB was sucked in, which reflects badly on his judgement.
Note that the earlier discussed JV ($100K now, $5M later for 49%) was duly signed by TXO and EEGC, but the $5M was at TXO option.
I can understand a $100K hunting license, I have no understanding of the subsequent $1.5M from TXO to pay debts. But, the $1.5M, if I remember right, came from a third party, not TXO. If that goes south (arguably now at south pole), not sure what harm comes to TXO.
TXO reputation defintely besmirched by this whole episode.
Doc --
Regarding your comment
Good point, forgot about TXO's repayment of 1.5M of EEGC debt repayment in return for a note convertible to 20% of the company.
I think idea was to 'take out' the most litigious EEGC debtors, to clear the way for an investor to put in money for drilling, without fear of it paying debtors
But, heads TXO lose (company can't repay the note, if they don't drill and strike oil), tails TXO lose (stock worth nothing without successful drilling).
One of the worst plays you can imagine. They must have thought they could help EEGC find funding, not what sure who thought they knew that Libertas, Sure Capital, and Hunter Wise could not find.
TXL (?) Tasmania, was a mirage. NBD equally so, at least it would appear so far.
Out of time for funding in advance of lease exploration, unless they can convince MRT to provide a new lease, IMO only possible with 'proof funds.' Telling that apparently NBD provided for the coal project -- a real fantasy -- and hasn't for Bellevue drilling.
Black Gold, with respect to:
I understand the concept:
Earnest knows they have raised no funds, because otherwise we would have a PR and an 8-K.
He knows they won't drill, because that takes cash and with EEGC's financial position, no driller will go to site without cash in hand.
Meanwhile, three business days until EEGC's drilling date, per the 8-K, has come and gone.
There is a reason the stock is dropping heavily this week, without buying interest in keeping it up.
Batting, Black Gold, and jerseyfish (haven't heard from that alias in quite a while!) -- surprised that with your optimism at .024 over the last month, you aren't snapping up shares at a sub .02 level, thereby keeping the shares at .02 -- interested in hearing your rationale.
It isn't the 'gloom and doom' crowd that is driving the stock price down, it is the market's growing understanding that drilling won't happen, and that references to Faser technology, factories in Kansas (oops, Missouri but I'm sure you get the reference), flare gas technology, medical waste, and Africa are deflections from the core fact: this oil and gas exploration company is about to lose the only asset that they have had, and have had for 12 years -- a license to drill for oil in Tasmania.
To another poster, if Tasmanians want to drill, let TXO's Tasmanian subsidiary pass the hat.
At the moment, there is very strong evidence that the filed but unsigned JV with the Koreans is NOT going to happen.
Depressing.
Six Tassie business days and counting until EEGC's projected Bellevue drilling date of April 2.
Jerseyfish and batting, what say you?
Good to hear about second San Antonio store, means the franchisee is having a good experience, can be a reference point for others.
So, let's take a moment to add up the store opening count:
- Tampa
- Montana
That would make 2 for the quarter against the forecasted 100 for the year. Anyone know what happened to the five Phoenix stores that were announced for hte quarter in December, or of progress on New Jersey, announced almost a year ago?
Going forward, we know of
- Montana #2 (unless it is put in this quarter, albeit not operating under the Barista brand)
- San Antonio #2
Still feels like a long ways to 100, hopefully more announcements are coming soon.
Seven Tassie business days and counting until EEGC's committed drilling date.
I'll take the over. All over.