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And with us retail investors holding less than 20M shares, our wants have become irrelevant...
This is why I proposed the idea of increasing the A/S now, so at least nobody is blindsided.
We need $100M - $150M in cash, plain and simple. When the NASDAQ up-list and corresponding IPO (which would have raised the $150M needed) went up in smoke the company went into desperation/survival mode (we know what happened next with the convertible debt). Now we are in a cycle of debt and cash problems.
Issuing shares brings in cash without increasing our liabilities. Immediately the balance sheet would be vastly improved (cash increased and current liabilities reduced) and then leadership can focus on increasing revenues and decreasing expenses (rather than continuing to focus on the terms of their next loan).
The type of debt they are entering into is dilutive (warrants by nature are dilutive so nobody can argue against this), so why not get it over and done with now?
The way I see things is the road we are on leads to either another R/S or increased A/S (eventually the fully diluted share count will be above 300M). I personally would rather get it over with now....then I could see a steady increase in share price over time.
I totally agree in that they need to get their costs way down.
Selling, General and Admin costs of $19.5M this Q (when Revenues were $11M)??? Last year their S, G, and A costs were $56.5M, $13M more than total Revs. Are you kidding me? That is allot of printing....
However, their Debt is still an issue. Interest expenses were $32.4M this past Q and was $44.1m last year.
How would you guys (guys who post the most on here) think of the following?:
Add 300M more to the A/S. Then, rather than play this game of borrowing cash and issuing warrants (which will eventually come to a point where we are forced to make a R/S or A/S increase decision), just sell the 300M shares at $0.45 (or more) which would bring $135M to the company so they could pay off all their debt and give them operating cash moving forward. This would eliminate the millions in interest payments, so coupled with other expenditure savings would result in profitability sooner. Profitability would then drive the pps moving forward. Just wondering what people think of such a proposal...
Yes! Should have included them in my other post.
Huge population of smokers there as well...
I think ECIG should focus on US, Canada, UK, Europe and the Nordic Markets (even though Sweden has banned nicotine containing fluids, but that hasn't stopped Canada).
I understand they want to be a global player, but certain areas just do not make sense from a business/economical perspective...which is why I am not banking on Mansour and their distribution channels.
No direct source, just reading online...
http://egypt-news.us/2015/02/13/health-ministry-bans-e-cigarette-trade-over-containing-toxic-chemicals-cairo-post/
http://www.thecairopost.com/news/137320/inside_egypt/health-ministry-bans-e-cigarette-trade-over-containing-toxic-chemicals
The website I reference for legal status doesn't have Egypt listed. For your reference it is:
http://www.ecigarette-politics.com/electronic-cigarettes-global-legal-status.html
I know the Health Minister in Israel wanted e-cigs banned, but I believe it is legal there.
As for Mansour, they have invested in companies located Israel (their global investment arm has a presence there), but it is limited to that.
Illegal in Mexico.
Totally agree.
Hookah is extremely prevalent.
Hookah - the original vaporizing....
Egypt - banned, so a moot point.
Kenya, seriously? Kenya has massive poverty. Their average annual salary is $1,500 per year. They have 8,000 super-rich (hold 2/3 of the countries wealth), but outside of them they are extremely poor.
Morocco - average salary is $2,300 per year.
You think these people are going to pay $20 for a starter kit?
Cigarette distribution is one thing (costs are pennies per pack), but ECIG products cost way too much for most people in these regions...
Well, Egypt is out of the equation...outright ban.
Feb. 15, 2015 - "Egypt just decided to kick e-cigarettes out of its country. The health ministry will confiscate all vapor products currently on the Egyptian market."
It is nice to have Mansour back on side because they have deep pockets (and we will need more of their $s). They sure would have been pissed based on what they paid for their original investment (post R/S equated to $1,518.75 per share - this is not a typo), but what ECIG gave them to get them back on board was way to much IMO (gave them 19.7M shares for a $1M loan). Distribution in Africa and the Middle East is either not legal or not economically viable, so from a strategic stand point I am not sure what they can do for us...
Africa as a continent houses some of the poorest countries in the world. Poverty, corruption, and disease has limited their economies for decades.
Not sure this is a viable market...considering you can buy a pack of smokes for about $2 (USD) in most countries ($0.80 in Gambia).
I assume they say potentially because entering those markets might not be viable due to existing laws banning the products or those markets not being economically viable (Northern African countries have a GDP per capita about 1/6th that of the United States, so it probably costs more to make than what they could sell them for in those countries).
So much for my call of sub $0.30...LOL
I assumed the market would evaluate the financials, but I guess they liked the company's forward looking statements in the News Release more so.
My bad...
100% agree.
With the acquisitions they made last year, they were operating very inefficiently (allot of duplication and added expense).
I assume the synergy would be fully integrating the companies and therefore reducing their operating expenses.
Glad to see that is a focus moving forward...
I'd say sub $0.30 (hard to rationale the pps going up).
Not sure why or what people are celebrating with this report.
I agree.
My opinion:
If they are under $12M, watch out, the share price will get hammered.
Between $12M-$15M would not be great and I think would result in a lower share price (not sure how low as the current price may already factor poor Q1).
$15M - $18M should, at minimum, keep the price in the $.35-$0.45 range (warrant range).
Over $19M would be very positive IMO.
Once we hit $20M things should really start to kick off (assuming they are getting their expenses in line).
$25+M - we should all have ear to ear grins...
Rehmann Robson LLC did their 2014 Audit.
Not sure if they have been consulted to do their Q1 Review.
LOL, definitely!
No, it is the company's responsibility to prepare their own financial statements.
The accounting firm does the review and year end audit.
Ummm, maybe look at the Income Statements and get back to me.
Q4 of last year had $12M in Rev, so even $19M would equate to an increase of 58% Q over Q.
Plus, the $4M of deferred Rev is speculation.
Q1 Revs of $19M would cause an increase to the share price as this shows the company is growing.
Maybe those #s would be a disappointment to you, but not the market.
http://www.vice.com/read/a-company-ordered-recall-highlights-the-wild-west-of-e-cigarette-lack-of-regulation-in-canada-289
I have friends in Canada who vape with nicotine liquids, so I know the industry is growing...
The link above explains the Canadian situation well.
Q1 with $23M in Rev would not be a disappointment (that would be an increase quarter over quarter of more than 90%) and the pps would increase under that scenario.
Q1 with $33M in Rev would shoot this back to $2.00 plus...
LOL…if it is a scam, as you say, then that would make someone an idiot to buy at any price….
So, if you would buy a scam at under $.20, what does that make you?….. :)
Cool, thanks for the info.
I know racing advertising is crazy expensive, but would have no issue when the company is flush.
Ya, for company that needs cash I am not sure how prudent this is. But it is cool....
Respectfully I disagree.
The delay is not a positive development and history shows the market does not like reporting delays...
This could presents a buying opportunity, so you could wait and see how the delay impacts the share price this week.
Similarly, if the 10-Q isn't great then that could add another buying opportunity in the short term.
So for those looking to average down and still believe this to be a long term play, the delay and a poor 10-Q can be be turned into a positive.
I read it that is was the company's delay, not the accounting firms.
"..due to a delay experienced by the Registrant in completing its financial statements and other disclosures in the Quarterly Report. As a result, the Registrant is still in the process of compiling required information to complete the Quarterly Report..."
I take it that the accounting firm subsequently needs their time to review, so it hinges on ECIG to finish what they need before hand.
Does anyone know if the Subsidiaries are using separate books or is this a fully amalgamated company right now?
I know from my Financial Statement consolidation courses (back in the day) that consolidating Financial Statements is not an easy task...
They could file earlier though, so maybe they get it out by Friday.
This delay isn't going to help the share price this week...
"Recent research supports the idea that NT 10-Qs have a negative effect on share value, as one might expect. A paper by Bartov, Defond and Konchitchki, for example, presented evidence that late filings are correlated with negative market reactions. Interestingly, the negative share price reaction tended to be more dramatic for NT 10-Q filings, particularly when the reason for the delay was related to accounting issues.
One reason that late quarterly reports may be more significant is that they contain less information than a 10-K and aren’t audited, and therefore should be easier to file. The relative simplicity of the filing leads to questions about the reporting company if they are not able to meet these fairly minimal requirements. Are the company’s controls effective? Are there accounting issues? Are the personnel inadequate? These are just some of the questions an investor might have."
An NT 10-Q filing provides an additional five days for the actual 10-Q to be filed.
So next Monday...
I am anxious for next week as well.
If things are bad, part of me wants to average down (think I can get my average down to where the warrants are priced). But, if things are bad, is it wise to add to my position?
Really need to see how the market reacts to the 10-Q, go through the report thoroughly, and then see if it is worth the risk...
The warrants are 157M, period.
If, the O/S increases and the 157M warrants do not represent 25% of the O/S, then the lenders get more warrants up to that 25% value.
So unless the pps remain under $0.45 for the next 7 years, there will be 157M dilution, not "maybe 10M".
To be honest, we want the warrants exercised. Two reason; one - we need the cash, and 2 - it means the pps has risen higher.
If the Q1 numbers are around what you anticipate I think a buying op comes next week (if it were me I wouldn't be buying now to average down, I would wait until next week).
Then, if things play out as you anticipate for Q2 & Q3 we will see the share price follow suit.
I believe they do (disposables, rechargeables, vaping kits and vaping products).
I read that the cigarette style products are not growing at the same rate as the later generation models (refillable vapors/tanks/mods devices), but ECIG has both.
I would say if one focused on just Revenues and they are below $16M, we have not seen the bottom.
However, you cannot look solely at just Revenues. If they have made headway on the expense side and B/S then below $16M might not impact the stock as much.
Basically, one needs to evaluate overall financial improvements.
If the company is still not moving forward to becoming profitable and their B/S is still not strong then we have not seen bottom.
If the strength of the B/S has improved and the Income Statement shows improvement I would argue we should be at bottom.
Really need to see Q1....
I assume the majority of the $41m went to pay off debt because their interest payments last year were INSANE (they paid $44.1M in interest and only had $43.5M in revenue). No joke, their interest expense was greater than total revenues.
I would hope that operations starts to fund itself...
For that to happen they need to increase revenues and reduce expenses (Selling, General and Admin being the greatest area they need to address).
Keep in mind, any warrants that were exercised in the Quarter would add cash as well, but I think allot/most of the dilution wouldn't help with cash-flow as it related to remaining conversions and stock based compensation.
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I do not see how it cannot be more healthy than smoking tobacco (or marijuana for some).
My buddy was explaining that there was only 4 ingredients in his mixture. Nicotine, food grade propylene glycol, food grade glycerin and a flavour (cannot remember what it was).
Now does vaporizing it potentially change the compounds in some way that can be harmful? Maybe...but even so probably at minute levels compared to cigarettes.
Massive health benefits compared to smoking so I do not see how these bans cannot be lifted.
I totally understand having restrictions/regulations, wouldn't want my kids using them (especially with nicotine mixtures), and also understand that governments will want to take their cut (taxes), but for any smoker it is such a great alternative.
Met a buddy for drinks the other night. He was a pack a day guy and since he bought his ecig he hasn't had a cigarette in over 2 months. Plus, he isn't even on his 2nd tank.
http://www.ecigarette-politics.com/
No reference to African countries though.
Middles East:
Oman - banned
Qatar - banned
United Arab Emirates - banned
Jordan - banned
Iran - unclear