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Haha... wow. Here's the email I sent Neil Friday:
Hello Neil-
I have a few questions on behalf of some shareholders if you wouldn’t mind addressing:
• How many shares are currently issued and outstanding to vendors/suppliers for capital purchases?
• Earlier this year the company commented that it will need $3 million in capital for operating expenses in FY2013. Has this figure changed since the beginning of the year?
• The company estimates +$30 million in FY2013 revenues but has a current market capitalization of just $4.5 million. The company had a market capitalization of approximately $12 million at the end of FY2011 with only $11 million in revenue. With these figures alone, the current forecast of FY2013 does not justify or explain the current PPS. What is management’s strategy to address the current market capitalization?
• When does the company expect the Papua New Guinea JV to materialize?
• When does the company expect the Dubai operations to materialize?
• Is management currently operating out of The Woodlands office or at the Scott, Louisiana facility?
Thank you and regards,
I got a delivery and read receipt so I know he got the email. Thought I'd hear back from him over the weekend.
Do you plan on getting out if its gets to .05? I thought you mentioned you got in around that price?
I sent Neil an email Friday and have not heard back.
Guess we'll find out some answers to our questions Wednesday after the bell. Expect there to be additional expenses related to the CFO hiring and stock compensation given to him for the quarter.
Yea, I don't expect to see profits. I do expect to see operating expenses as a percentage of total revenues to decrease. This would show me they are working to reduce operating costs.
If I were the hedge fund, I wouldn't bother shorting the stock. Id buy out control, take it private, restructure to become profitable while continuing to grow, then do an IPO 3 years later on one of the large stock exchanges. Use those funds to dividend back to shareholders and make a much bigger profit then making a few bucks a day shorting the stock.
The world of private equity and hedge funds.
I'd say it may have been a short having to cover at EOD but the last short report I read there were no shares shorted? Oh well, ill take it.
That was actually one of my questions in an email I sent to Neil today. What the current O/S was? It's really hard to say what the current O/S is. We'll find out Wednesday when the 10-Q is released.
One caveat to becoming profitable is that they've still got to stop issuing shares to pay for capex. Even when they become profitable they'll dilute EPS by continuing to issue shares. I want to see profitability and positive cash flow.
Thank you. I'm going to send him a few questions and I'll post any response I get.
Do you have their investor relations contact you can send me?
If I win the lotto tonight you have my word that I'll buyout the company and replace management with some aces.
Yes, that's true.
We might be seeing some accumulation down here in the 3's.
We might be seeing some accumulation down here in the 3's.
No, I'm not talking about "Profit Margin" (considering they have no profit). I'm talking about "Gross Margin" (Sales less COGS).
I disagree with your comment about the products being costly. They have a 44% gross margin, which is very impressive. Stock compensation, legal fees and cost of expansion are whats eating away at their gross margin.
Also, its not hype that's making the PPS go down. The company issues shares to vendors/suppliers in order to finance the purchase of fixed assets and operating expenses. These vendors can turn around and dump their shares on the open market to cash out. This, along with a multiple of other things are contributing to the PPS decline.
So we're talking $182,000 per year for 2 offices, wow! Use that $182,000 to buy back stock between .03- .10 PPS and we're looking at repurchasing anywhere from 6 mill- 1.8 mill shares.
Have a good night PSP...
They're spending $11k per month on their new "executive office" in The Woodlands in order to be close to Exxon. If they set this money aside and used them as funds to buy back stock, they could repurchase 4.4 million shares over a 1 year period at the current PPS.
Well put.
Dugas needs to dig into his own pockets and buy shares on the open market. He's paying himself $200k. Push this back up to .09-.10
No idea. Pretty sad that they're sitting here watching their equity go down the drain. And what vendors/suppliers are going to want to except shares as payment when they also see the PPS going down so rapidly...
I made a little bit but only played with a little. If I can remember, I purchased around 33k shares right at 0.10 PPS. It went up to 0.18 but I got greedy and didn't get out until it fell back to around 0.14. So I made around $1.3k.
That was when they paid 15k to promote the stock so management could exercise their options. I remember right after the promo ended, the company filed some form 4's with the SEC stating management exercised their option.
Would definitely like to see it go back to .18 with an entry of 0.35.... haha. Wouldn't we all!
I'm not talking about a takeover just for the sake of the PPS. I'm talking about a private equity takeover to gain control, appoint new management and implement a profitable growth strategy. This current management is issuing shares to vendors like handing out free candy on halloween. They have not shown any concern or attention to the interest of shareholders and the PPS.
I'm right there with you. I'm going to email a few private equity firms here in Houston to put this company on their radar for a takeover. Tired of the passive management shit!
Shit storm today. Earnings come out next Wednesday?
Just wish I had the money to step in and buy majority control. Replace management and turn this company profitable. Could be one hell of a buyout opportunity for private equity.
WOW!! You were right about my .035. Gonna pick up some more here.
Based on the April 15th short interest report, it shows no shares are currently being shorted. This is pure selling at the bid. Which makes this even sadder.
Based on the RSI at 20, this is completely over sold right now.
Hahah... thanks but, I'm pretty sure this will go lower. Amazing to think that a company expected to gross >$30 million this year has a market cap under $6 mill. I'll keep adding on the way down.
My guess behind the reason for this decline: If you read over the 10-k, you'll see the company has issued an ass load of shares to purchase their capital equipment and to cover expenses. These are likely issued at a small discount and can be vested immediately by the supplier/vendor. So they're likely dumping their shares on the open market to cash out. If they're being issued shares at a small discount to current PPS, they can vest immediately at a small gain.
At the end of the day, the company needs to start financing operations with positive cashflow to avoid issuing shares. Sounds like a "duh" comment for you and I but apparently management doesn't get the concept.
Somebody stepped in and placed a .005 bid over mine. A$$hole!
Got my bid in at .035. I've just been watching the stock for the last several months and at this point, I would love to see a private equity firm come in and take over the company. Appoint new management and lay out a profitable growth strategy that also acknowledges shareholder value. If I had the money, I'd be calling other shareholders to rally a takeover.
Thank you
Would you mind posting their email they sent out? Haven't received anything yet.
Not sure I see the bounce happening today. Just based on historical VM picks and how they've performed on the 3rd day.
Hoping that XUII has attracted the shorts away from HIDC. Not much more gains to be made by shorting HIDC considering its sub-pennies.
No problem.
Honestly, I'd stay away from the Victory Mark picks unless you can get in very very early at the opening bell. They never hold their gains for more than 1 day. Take a look at XUII. Victory Mark released it yesterday and look what happened today.
There's more certainty you can get a nice 20-30% gain on Awesome Penny Stocks picks. I'm just playing the intra day charts. In at 63 here and will likely get out tomorrow if there's a nice bounce.
That's really hard to call. But based on the bounce of the previous 3 picks, all bounced by at least 200%. So 200% at .0068 is .0204. I could possibly see it going there. But this gain happens over 1 or 2 days. So get out quick.
Definitely close to or over .01