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I realize the dichotomy with the jumbo RS & the effect it would have on the warrants rounding up to those ridiculous values. On one hand, they NEED the RS to maintain QB to settle the warrants, on the other it could make things worse! Keep in mind we are dealing with crooks or idiots (IMO).
Warrant holders have NO VOTING RIGHTS so do not assume the "alleged 85%" voted for anything. If there is a sale, wouldn't the buyers be buying the warrant obligation as well?
The only thing I'm comfortable in saying is I have no clue how they will settle this. My converted shares are worth about 15% of what I paid for the units now so I will hold them at this point and accept that I will likely end up holding only my dik.
Thanks. At one point I wanted to tell people "oh no, this isn't a toxic death spiral & it's not debt, it's warrant conversion". In reality, now I think it's the sneakiest, deadliest death spiral one can conceive!
Minor point: the original value assigned to a warrant was 1.08, the warrant conversion price to pay for a share was $1.24. That's why I say the pps had to be around 2.50 to make it worth it to go that route. What a difference it could have been indeed...
I will repeat what I've previously said: It is silly for anyone to speculate what will happen going forward without including how the warrants will be handled!
Of course they stopped telling us how many are left, but at last count, and after the 1-70 RS, it was still over 1 million. Even if "only" 500,000 warrants were exercised at the current pps of .0053, it would require 7.1 BILLION shares. My guess is there are close to 1 million remaining.
One final thought for now: Each warrant that was valued at 1.08 went to 75.78 after the 1-70 RS. If the plan is to "wipe-out" warrant holders with a jumbo RS, 1 warrant at 1-10,000 gets a value of $757,800 dollars & 1 at 20k RS goes to $1,515,600 dollars. Since they "round up", how the F would that work!
I have 2 basic theories regarding the creation of the Units. They both revolve around management either being complete idiots, criminals, or a bit of both.
#1
The Units included 20 warrants with the option to convert to shares at $1.24 each. The pps for VPCO was right around that level back in July when they wrote this up. If the pps was around 2.50 or higher, people would have been happy to pay 1.24 for a share and the company would have received a large sum of cash too. The dilution would have been nothing compared to what they ended up with. Is it possible they actually thought the plan to acquire stores would go fast enough that the share price would rise to these levels? Was the 1.08 per warrant guaranteed black-scholes value thought to be just an incentive to sell the units?
#2
This scenario goes down the path of stupidity and/or "who cares as long as we get our $38 million". Meaning they had no idea or didn't care that all people would look at is the 1.08 value per warrant. The units sold for the most part for around $9 each. Just the 20 warrants at the b/s value exceeded $20 in value so this appeared to be a true arbitrage situation. Don't forget about the fixed 10 common shares for each unit too. When it was clear people just wanted to cash-in their 1.08 value and dilute the crap out of the SS, did management say F it, let the dilution roll, as long as we get to pay off debt and keep millions in cash while "giving the appearance" we are executing our retail plan, we'll be fine?
I still have a difficult time regarding the "standstill". Like I have said, up until a couple weeks ago I held 6,500 warrants. I was never contacted by anyone regarding anything about them. I realize that is a very small amount and maybe a small group of investors hold the majority?
They never 8k'ed whatever they supposedly offered for people to standstill. I think it was more like "hey guys, as soon as we get kicked off Nasdaq to Pink, you won't be able to convert". In other words, a "forced standstill". What could they have offered, that they didn't offer me, that didn't need an 8k?
Also, I discovered they don't even know who the people are holding warrants in "street name"! The only way they could have come close to the "100%" they alleged they were going for would have been to contact ALL brokers and have them contact their clients.
They also changed the rules a bit regarding the exercise of warrants. I had a standing request in from the day they originally halted conversion. The day after they hit QB, I called TDA to find out if my previous request was still pending. Answer was "no", but before they could re-submit my request, Vapor wanted my name & account number, which TDA does not forward without permission. (new rule #1 and keep in mind nobody contacted ME about the new rule and the company never published it either.) I said "yes", but also wanted confirmation what date would be used now when I re-submit? The standard rule was shares that you get are based on closing pps two days prior to request date but I wanted confirmation of my date due to prior/pending request. So TDA gets back to me & says "ok, your request has been submitted and shares will be based on 2 days ago". The pps 2 days prior was .07 cents and that was when price was diving every day. I said "cancel my request". All of this took place over a couple hours. The "old rule" was you could cancel a request within 24 hours of making it. New rule #2 is "no cancellations once submitted. It took 4 days to get my shares so by the time I got the shares I paid .07 for they were trading at about .02 cents which resulted in a net below what I paid for the units, f me!
Thanks for taking the time! I guess I was thinking since they got to QB as a "seasoned company" maybe the "30 days after initial listing" rule over .01 wouldn't apply, but I think you are correct, they will get booted in short order at this rate.
I am on the same page regarding the possibility of RS'ing everyone to death and then start fresh with 21+ stores, 15-20 million in cash, and hope for the best. I know that sucks and opens them up to many other issues, but they don't appear to have too many other choices.
I'll make a couple separate posts regarding my other ramblings and thoughts...
Hey buddy, I'm buzzed right now, hope this makes sense: If they got to QB using the "5 day rule" of above .01, then maybe they would get 180 days to comply? They clearly weren't above .01 for 30 consecutive days before QB, right?
Regarding the "reverse then forward", that is also one of my theories but I thought it was too crazy to mention! Thanks!
I have a couple other theories I'll post soon, cheers.
Like everything else, I'm not sure that the "30 days" is a fixed rule? If it were, how did they get to QB in the first place? See the 5 day thing below:
In the event that the Company is a Seasoned Public Issuer that completed a reverse stock split within 6 months prior to applying for admission to OTCQB, the Company must have, subsequent to the reverse stock split, a minimum bid price of $0.01 per share for its common stock as of the close of business on each of the 5 consecutive trading days immediately preceding the Company’s application for OTCQB. In the event the Company is traded on the OTCQX marketplace immediately prior to applying for OTCQB, the Company must have proprietary priced quotations published by a Market Maker in OTC Link with a minimum closing bid price of $0.01 per share on at least one of the 30 calendar days immediately preceding the Company’s application for OTCQB.
I recall seeing a reference to "5 days" in one of their many filings. Even if they knew well in advance they would need to apply to QB, I don't how they pulled it off?
Does anyone know what his time was in the half-marathon he obviously just finished just before the call? I hope he's OK, he just couldn't get hydrated.
High-Lights:
The conference room is big & clean! Lots of nice, empty chairs too so he'll be able to get a few bucks for them.
They have a nice refrigerator where they keep their "fuel", as Ryan calls it.
No, it's an annual, they filed a late annual, and they said annual.
However, something ain't right and 6.5 would be more than double last qtr. but they stopped telling us about how many stores they acquired, so we'll see...
NWSUN, I thought you meant shares from warrant exercise, not split...
I was screwed by this. Are you waiting for shares & are you aware they "changed the rules"? (not talking about how many can exercise)
And "yes", there are still many warrants yet to be converted...
PJ, I really don't know why your response to my opinion regarding infinite "patience" with ECIG is all about that other company? I made no comparison between the 2 companies and agree with everything you said about "them". I have found many times it becomes s.o.p. to find a persons previous blunder and try to make the point that they therefore must "always" be wrong or somehow hold it against them.
Quote:
I can see why youre hurt, angry and negative, but that has nothing to do with ECIG. Management here is CLEARLY not as dirty as Vapor Co., and are actually trying to build a company without purposely screwing their investors.
Regarding ECIG, I am not "hurt, angry, negative". I remain "cautiously optimistic" that they will continue to climb out of the gigantic hole they were put in by prior management and I'm concerned that Q4 sales were LESS than Q3. (Q3 15.4 Q4 14.8)
Not "as" dirty? I don't think ECIG management is dirty at all?
People will always post statistics about the immense growth of the vapor market but we did not grow our sales? Is having a high level of "returns" a good thing?
"If" the tobacco e-thing product is successful doesn't this become another product we must compete with? Even Dan said they don't want to be in chain-stores because we can't compete with Big-T. Even if that product ends up being not quite as good as liquid vapor, do you think we will be able to out spend Big-T to prevail? (Betamax vs VHS)
I stand by my opinion that it is nuts to think the world will stand still while we get our finances in order. We NEED to be kicking azz & taking names but with a very limited budget, which is obviously very difficult. The company WAS bankrupt, not ALMOST.
Finally, my opinion has nothing to do with the incredible job Dan & crew are doing. I must be confident they are doing everything possible, I just hope it's enough. I have yet to sell a single share. Apologies to you & everyone else for my run-on babble.
I know how most people despise "non-positive" comments so this is another area where I had been keeping quiet.
IMHO, the potential for this product is a reason that anyone who thinks "time is on our side" & "we just need to be patient" is insane.
I really want to be a believer, but have lost my faith.
It would truly take a miracle at this point...
Warrant "converters" get beat up if the pps continues to drop, make money if no change, make big money if pps has sustained rise.
Bj, it was slide 16 (I think?) that had the "23%" figure & it clearly said "year". Ironically enough, his comments about it were at the "23 minute mark". I listened 10 times & really thought he was saying " year" but just couldn't be certain so I kept my mouth shut...
On 3/17 I posted I wasn't comfortable with some of the things Dan said at Roth & you barked at me. I "thought" he was referring to "year" but wasn't sure so why post a "potential" negative? I still think the future will be bright, just gonna take a bit longer.
By the way, you still have a few days to buy more product, so don't forget to buy more product. Did you buy more product yet?
Yes, I am thrilled with the COGS, margin, & the rest of the improvements they continue to make. My concern is investor focus will be on decreased sales. They have been increasing distribution as well, right?
Off to the cc...
Almost everyone here was assuming 20%+ revenue increase Q over Q, not year, even though Dan said "about 23% for the year" at Roth conference.
Net sales DROPPED from Q3 to Q4. Are people actually excited that Q4 2015 was better than Q4 2014 when a retard was running the company?
Unless they say something NOBODY is expecting during the cc, we're tanking tomorrow. I really, really hope I'm wrong...
CUIN2, I luv ya buddy and your optimism, but I HATE the part below I high-lighted:
"Electronic Cigarettes International Group Ltd (OTCMKTS:ECIG) has emerged as one of the brightest turnaround stories on the OTC Markets. A number of factors are driving shares of ECIG higher, but most importantly is the improving fundamentals for the company. The turnaround picture for ECIG is indeed real and is being driven by CEO Dan O’Neill."
IMO, the current PPS SUCKS! Unless someone is a flipper & got shares at the embarrassing recent price of .19 - .20ish cents, I do NOT see .33ish as "driven higher"!
I really hope the timing of the 10k is to piggyback on the "resurrection" of Jesus...
Happy Easter
The average for my 73,850 shares is .76 & I have shares I paid $18.45 for (split adjusted).
I won't be worried once we trade above .50 cents for 30+ consecutive days...
Hey, I'm sure there are possibilities that are above my level of thinking! Gotta wonder why Frost didn't put up the $40 million in the first place though? Sure could've avoided this mess.
Also true regarding the 80 percenter's, except I don't believe them. Never was an 8k detailing what was offered to wait. I hold around 6,500 warrants which is peanuts, but nobody ever tried to contact me about a standstill. When I tried to exercise again last week, TDA told me the agent wanted them to forward my full name and account number, which is "unusual" & never asked for. Vapor claimed they were seeking 100% standstill compliance but this proves they don't even know who holds warrants if they are in street name!
Maybe it's a good thing I still don't have my shares a and I'll get something better?
The biggest if not "only" factor effecting the company right now is the warrants & you suggest a buyout idea without the word "warrants" in it.
What liability figure are you factoring in for them? How are they paid for? I'm not looking to bash or argue. I "want to believe" in a positive outcome too. Help me understand.
Based on the number of remaining warrants and a PPS of .02, it would take 3.96 BILLION shares to settle them.
With no RS, what is your scenario for an increased PPS?
Check your "transaction detail". It's your "rounded share" from 1-70 RS. Hang onto it, when they RS again at 10k-20k you'll still have 1 share...
If this reply was for me, NO, I don't think RS is good for anyone. What I am saying is RS is ONLY choice they have unless they come up with about $70 million some other way. And, as I said in post few minutes ago, warrant holders will NOT be made whole, they get equally, if not more screwed.
Good points, I pretty much gave up on Brauser & Frost & actually forgot about them! Funny thing is Sr. Brauser & 2 of his buddies are on the Vapor Corp. payroll. They each got a one time $50k bonus & all 3 get $20k per MONTH for 2 years as consultants to search for vape stores to buy! I think the "money train" is pointed in the other direction here.
Other strange thought I have is they can slowly bleed shareholders via RS's while holding on to most of the cash. It is possible, if they survive, to have warrants paid off (by the end of this year), still have $20ish million in cash, & 20-25 stores. Of course shareholders will be wiped out but ya never know?
Finally, even most warrant holders are or will be screwed too. I can't exercise mine! Tried Feb. 18 but was on standstill (that I was never contacted about or agreed to anything), tried again on 3/17 & was told the "rules changed". I need to give permission to forward my name & account no. to the agent. If I didn't call looking for my shares, would have never known. They had everything again by noon 3/18 & I still don't have my shares & quantity is based on 2 days before 3/18 request. Tried to cancel exercise request within 24 hours of making it, but guess what? New rule, no cancellations. So if I do get shares I'll be paying .073 cents for them. Wonder why people short? Warrants are subject to RS's too so this is an equal opportunity screwing! Go eci*g.
Everyone hypothesizing why or what is going on with this company should include how their theory would handle the WARRANTS. There is ONE reason for these stupid RS's and that is to "pay" for the warrants. About 1 week ago there were just over 1 million warrants remaining since they were adjusted by the 1-70 RS too. Each warrant is valued at $75.28. So if the PPS is .02 cents, you get 3,764 shares for that ONE warrant. Now start looking at what the PPS & OS will be after a jumbo RS. Remember, it's a moving target.
Regarding "cash on hand": In mid January they disclosed they had about $28 million as of December 8. This was before they paid $1.7 million to Fontem for patent infringement settlement. Add whatever they burned thru between 12/8 & today for what you think remains. Which brings me to next depressing thought:
Do people think Altria really "tried" to buy this company? There was one dopey seeking alpha article almost 2 years ago that speculated Altria might want to buy them. That was during the cig-a-like craze. The company totally repositioned from a chain store cig-a-like model to brick & mortar retail Vape stores. Hence the issue of "units", now warrants. They also took about a $1 million charge in Q3 2015 to shut down all of their kiosks.
Their patents are useless (see above). Of the 2 "biggies" they have, 1 is for a "soft filter" like a real cigarette. Wow, kind of like a device for a faster rewind of VHS tapes. The other is for a finger print lock on a vaporizer. Could be something there but they said over a year ago they planned to implement it. I saw the former CEO demo it. He had a 6 inch by 4 inch circuit board hardwired to a vaporizer. I shit you not. It does not appear to be functional. All but 2 of their stores are in Florida, Alabama has the 2. Some footprint, huh? So factor in the warrant liability with what they have to offer and ask yourself who or why would someone want to buy out Vapor Corp.?
I'm not even "half way" to being even to my avg pps with my 75k 'ish number of shares so I have NO intention of selling anytime soon!
I really hope I'm wrong but will NOT raise my expectations only to be disappointed since I plan to be here for a while.
GLTY as well.
It's like you took those words right out of my head. I've been thinking the same for a while and listening to Dan's "pitch" at Roth only reaffirmed it for me. Assuming they announce great revenue & wonderful reduction in costs with increased distribution will not be enough to really move the PPS.
Yes, I know how stupid that sounds but unless we hear something really unexpected, I think we're looking at 2017 before a real climb in PPS...
All of my shares are inventoried using the FISH method:
FISH - First In, Still Holding
Thank you for taking the time to create a detailed, analytical explanation regarding your thoughts about the warrants. I personally welcome reasonable opposing views here because sometimes they encourage a response like yours. IMO, even if someone disagrees with the stuff you presented, it adds much more value than simply telling someone to shut up & go home.
Just sayin...
Except with shares of ECIG, where the MM's do what they want, a.k.a. "naked short", right?
If Q4 2015 revenue is DOUBLE Q3 2015, which it won't be, full year 2015 revenue will be less than HALF the $30 you dreamt up. 2015 will be LESS than 2014, and WAY LESS than 2013. Other than that, plus you forgot about the $70-$75 million warrant liability, and they are likely the largest shrinking nicotine company public traded, your numbers are spot-on.
GTQ: VPCOU was the ticker for the "Units", which converted to warrants & preferred shares in January.
VPCOD is a temporary ticker. I think for 20 days? The "D" indicates the company did a reverse split, nothing else.
I use TDA & got shares at 11:30 AM EST
VPCO must be trading on OTCQB or higher before any warrants can be exercised.
You're a riot! I heard VPCO's uncle Philip Morris died and bequeathed his entire company to them!
Geeze, if only someone had warned people here that at least a 1 for 70 RS was a done deal. Oh yeah, that's right, I DID, the night before the run-up to high 009's, and I got ridiculed for being a basher! I'll hold my breath for the apologies...
To "Cash" & all: "WE" 20 percenters (I.e. me) can NOT begin to convert tomorrow. VPCO needs to be trading on OTCQB or higher for that to happen! The confusion is that VPCO needs to be at/above .01 to qualify for QB uplist, it is not just to be trading at .01.
After jumbo RS, shares are rounded up, so no worries about being wiped out. You will have at least "1" share.