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BobKS, as I have been a "repeat offender" in regard to posting how a Trump victory should propel VHUB higher, I'm not sure if I have any credibility in responding to WTF is going on with the stock this morning. But I'll respond anyway as no one else has yet offered a response to your invitation to comment.
I think that prospective buyers in VHUB can see that when there's an overhang of supply as represented by Mr. Fife's shares, then you can toss all the strong fundamentals (like the improvement in VHUB's regulatory environment) and all the technicals (like Cash's expert analyses) out the window. Somebody, presumably but not necessarily Fife, wanted to sell 300K shares and so the shares were dumped on the market.
VHUB really needs to redo its capital structure, or at least just put out some PR on how the process is coming along. It will be interesting to see if the first fiscal quarter 10-Q confirms that sales should be no less than 12 mil for this fiscal year - and if we get that confirmation whether the stock will respond.
Have a good week...
Good morning, Cashbyers, and I must confess it is enjoyable for me to compare your Twitter posts with your Ihub posts. I'm not sure that it is as much a tribute to your technical analysis skills as it is to your order execution skills that you were able to get your 18,500 shares this morning at .0111 which has been the low for the day.
I'm nowhere near an expert in how the penny stock market actually functions, but I would have imagined that only a market-maker would have been able to get the price which you got. So, let's compliment both your technical skills which impelled you towards your order to buy and your order execution skills which actually effectuated that buy order.
Beyond that, I wonder if there is some sort of "dump and pump" (sic) going on here. Could Fife be doing some tactical selling of some of his shares so that he can add many more shares at a lower cost due to the application of the conversion formula? ...and then the quarterly numbers will come out strong in a little while, which will provide the pump in a legitimate fashion.
Somehow, the expert investors get the balance right among cynicism required in the penny stock environment, fundamental analysis, and technical analysis.
Anyway, good luck with VHUB and the rest of your holdings.
Let me offer a few comments on your endeavors:
1. It is to your credit that you are among the few, if indeed there is anyone else, who has "opened the curtain" as to his/her true identity. It was interesting, pursuant to your openness, to read more about you in Linked-In, and I encourage you to devote some of your boundless energy to whichever MBA program you will choose. I think that your graduate thesis or project might be a quantitative analysis of the impact of the investor relations function on stock performance.
2. Regarding VHUB's IR campaigns, Paul Knopick did a diligent job in getting Kyle Winther (primarily) speaking engagements on various web-radio (I guess that would be how the medium might be described)infomercial kind of programs some months ago in an attempt to bring a larger body of potential investors to some level of awareness about the vaping industry in general and VHUB in particular. Nothing much happened, it would appear, due to that effort. ...though it would be interesting to survey the denizens of this board to see what drew them to first take an interest in VHUB.
3. I differ with Paul's approach in only one aspect. As an example, his press regarding year-end numbers focused, actually only even mentioned, sales and gross margin. Of course, the bottom line was available for discussion. I believe that if you don't discuss a topic, then the public will fill in the blank in the most negative way that can be imagined. Better to say there was a loss for the year and give some reasons, then mention how each of those reasons will become less onerous going forward, than to let the reader discover that indeed was a loss. Of course, Paul has done this for a living for a long time, so I'd take his viewpoint over mine every day of the week (but still I am allowed my curiosity).
4. Beyond matters of your post, to the extent that the polls have swung in Trump's direction and nothing seems to have been factored into the stock regarding the potential of reduced regulatory burden, I would believe that there's a substantial buying opportunity in VHUB at the moment, even with Fife's stock overhanging the market. Perhaps folks are waiting until the first quarter earnings release due in about two weeks.
I wish you well in all your endeavors. FWIW, if you have the financial capacity to do an MBA full-time, take a look at the graduate program at Bentley University in Waltham, MA.
You're welcome, Cashbyers! I looked at your Twitter account and you appear to be somebody who does this (i.e. trading) for a living more than just a hobby. It would be interesting to learn how VHUB first came to your attention. I've shared my story here so many times that it would be interesting for me to learn how others had VHUB pop into their minds (we already know Hostastock's and RPH's stories, as they're in the vaping business).
Have a great week for yourself!
Hostastock, rarely am I grateful to my prostate for awakening me in the middle of the night, but I enjoyed your brief post so much that I'm happy that I used the post-bathroom moments to see if there had been any responses to my prior posting. Even more seriously, I think that your own embellishment to technical analysis - namely seeing which market makers are being active or inactive - may be more valuable than how charts are read in cases like this where there are large "overhangs" of stock, whether it be Fife's shares now or Gotama's shares down the road.
I now take myself back to my regularly-scheduled sleep (actually after seeing what Cashbyers has written).
Good Saturday evening, Cashbyers, and your balanced view regarding VHUB is very commendable. Let me comment on some specifics of your post:
1. We're going to learn of the first fiscal quarter's sales in about two weeks, presuming timely SEC reporting via 10Q. If the number exceeds $3 million and there is an operating profit before reckoning interest expense, that's bullish fundamentally. So we're not reliant upon a press release per se.
2. Maybe even more important would be the announcement that recapitalization is finally about to happen, as this has been in the air since May of last year. The company really ought to be providing progress reporting regarding this endeavor.
3. But I think the most bullish occurrence for the stock would be a Trump victory, given his platform on reducing regulatory burden (that means FDA in this case) particularly upon small businesses. The likelihood of Trump's winning has increased in the past couple of days, it would appear. (This is not a forum for politics, so I'm not commenting one way or the other about who's getting my vote, and I hope no subsequent poster will drag us further into anything political.)
Just on a personal note, if you should happen to sell and leave this board, your presence will be missed.
Good morning, Cashbyers,
Mr. Fife is Typenex per the following SEC filing:
https://www.sec.gov/Archives/edgar/data/1515718/000114036116069226/0001140361-16-069226-index.htm
I don't readily have the documentation that Fife is also Iliad. But here is Fife's own website, and you can do the reading (as I'm a bit rushed at the moment):
http://johnmfife.net/
I don't have specifics, but I do recall from looking at one or more marijuana stock discussion boards that Fife's history - as one might logically presume - is less a matter of wanting to stick with a company for the long haul, but rather to "vulture" some cheapies and sell on the bounce up.
I have no idea what he's been doing with his shares. He's limited to 10% ownership, but as he sells shares, he could convert into shares to replenish what he sold. I would have thought that these newly issued shares would require an SEC filing to state that issued shares have increased - but this is far from my area of expertise.
In the end, VHUB needs to refinance the short term debt into a mix of stable long term debt and equity issued at near market value price.
Cashbyers, thanks much, and your recent analytical post really does "move the ball down the field"! I think the bulls have a better case right now, but we need to continue to listen to the bearish arguments and factor their good points into our reviews and analyses.
Lexus, I respect the point you're making about the Spring 2014 pump and dump, and I've even posted that reputation is far more easily lost than regained. In the case of VHUB, I would believe that the 2014 victims have predominantly taken their "tax losses" by now. The overhang on the stock right now is represented more by the potential for Mr. Fife to dump his conversion-shares. Much later on, the Gotama converted shares at 15 cents will be a formidable barrier, but of course you would believe that such threshold will never be reached. As ever, we'll see...
Auditor1, thanks you for your "random act of kindness" regarding your comments about my posts on this board. I'm not a shareholder in this, or in any, stock as I'm retired and am fortunate to be able to live off Social Security and pensions (and can afford to be risk averse).
As the regulars here have read a number of times, I got interested in this stock in spring 2014 when I was deluged with pump and dump e-mails and boiler room calls - and I was curious how long it would take for the company to collapse. I was amazed to learn that the Winthers did not dump their stock at all, and in some ways were victims of the scheme. So I have stayed reasonably active on this board as someone with no axe to grind, and given that my about 24 years of my 44 year career were devoted to being a CFO, I figured that from time to time I might have something to contribute to this community. ...sometimes being bullish and sometimes bearish in outlook, but always honest, though not imagining myself to be prophetic (or even correct). The bulls get angry with me sometimes, and the bears get angry with me sometimes.
Good luck, and enjoy your weekend!
Good afternoon, Cashbyers, and let me delve into some of the points you've raised.
1. I haven't tried out Discounted Cash Flow analysis on the company, as it's really hard to guesstimate the range of the stream of cash flows in future years.
2. I took a look back at the history of common shares outstanding. The company was at 68 million issued shares at June 30, 2015, growing to 72 million issued shares this past June 30, and further growing to 90 million shares as the most recent 10K was being promulgated (see page 29 of the 10K for the source of that info). So I'm not sure where you're deriving your 20% dilution from 2015, but you're in the ballpark so not a big deal at all.
3. As regards the price/sales ratio, your .26 number applied to a 2 cents stock price yields a sales number of roughly $8 million. That would be a reasonable number if we use a smooth growth rate from 2015 to 2016 to 2017 fiscal years. I would think that we might use as high a number as $14 million for annual sales if we use June and July monthly numbers as the basis for annualizing. I'm just saying that, to your credit, you're being on the conservative side in figuring out where the stock price might be headed.
4. I respect your use of technical analysis, but I have sincere concerns as to whether technical analysis really "works" in a situation where Mr. Fife can decide to unload some of his true-up cheapie shares at any moment or, on the positive side, where any of the posters here could put in an order for a couple of hundred thousand shares and drive the price up by 10%. Just going by support and resistance levels seems about as far as I'd go using technical analysis. Almost forgot, I've seen so many postings about how the market-makers in penny stocks have higher priorities than maintaining an orderly market that I'm even more reluctant to bring technical analysis into the picture.
As before, I'm in agreement with you that the shares remain undervalued at current levels. I'd like to see a press release on August and September sales, I'd like to see a progress report on obtaining permanent financing to take out the short-term convertible notes, and I'd - for the purpose of VHUB's prospects - like to see Trump elected as regulations upon small businesses would be rolled back to a significant extent. In summary, there are more chances right now for pleasant surprises than unpleasant ones.
Have a good weekend - I'll be out of pocket on Monday and most of Tuesday, but it will be interesting to get back on the computer and see how the stock will have performed on the next two trading days.
Good afternoon, Cashbyers,
I'll take a stab at answering your questions.
1. Regarding convertible debt, take a look at Note 7 to the financial statements as presented in the 10K which is available via the very website we're both on right now. This is around Page 55 or 56 of the document, and you'll find that VHUB has convertible debt of 931K payable to Iliad and TCA Global. A lesser number is shown on the balance sheet, because some of that 931K has been moved into the Derivative Liabilities caption which is explained in the notes to the financials, but nonetheless is way beyond my pay grade to understand.
2. Given that the debt is classifiable as a current liability, that will explain why the ratio of current assets to current liabilities is less than the familiar benchmark of 2:1, and in fact is less than 1:1.
3. The company had a positive net income FROM OPERATIONS in the fourth quarter of its fiscal year, so any current losses would be attributable to the debt structure as interest is a non-operating item.
4. Management announced in May 2015, if I'm remembering correctly, that they're trying to refinance short term debt into some better mixture of long term debt and common equity. But they haven't furnished any reporting as to any progress they have been making, at least as far as I can remember.
5. Let's work together through your accounts payable question. Cost of good sold through nine months per the 10Q was 2,530K. Cost of good sold for the full year per the 10K was 3,550K, so cost of goods sold for the fourth quarter of the last fiscal year was 1,020K. Let's annualize that, so a full year's cost of good sold at the fourth quarter sales volume would be 4,080K. 828K in payables at June 30 would be about a fifth of a year's worth of purchases, so that gives us roughly a 2 1/2 month cycle to pay their invoices. Generally, we'd prefer to see maybe a month and a half at most, which means that they really have deferred borrowing via convertible notes maybe another 160K as contrasted to using their suppliers as "the bank." ...meaning that you've made a good catch here in terms of financial analysis.
Overall, there's a BobKS posting today which resembles one of my recent postings in that we both believe that the stock would likely respond very favorably to the company being able to turn a bunch of their short-term debt into some mix of long term debt and common equity. I would add that refinancing should be doable, given how sales have been soaring and that the company has been addressing the issue of FDA regulations by being aggressive in entering foreign markets.
I've probably given you much more than the "high level analysis" you asked for, but I hope that this post has nevertheless worth your time to read it.
Good evening, Gustavo, and here's an instance where I'm in agreement with you. While the 10K was actually fascinating and enlightening reading for me (somewhat unlike your experience, I realize), your "read between the lines" approach came into play when I read the related press release.
One should always look for what isn't addressed in a press release (sort of reading between the lines when there is actually no line to read between). In VHUB's case, the press release sung the praises - and correctly so - of booming sales and gross revenues. But the press release did not take the extra couple of sentences to speak at all about the bottom line and related cash flow implications.
I do believe that if a company lets the public make its own determinations about the meaning of items not covered in press releases, the public will generally be much more negative than whatever matter merits ("what are they hiding?"). So I understand your skepticism regarding the potential of the company and of its common stock.
I still maintain an overall bullish view of the stock at current levels, believing that the company should be able to recapitalize its way out of an unfavorable short-term debt structure, given how sales and gross margin are trending. ...and I would hope that you've pulled back at least a little from your "scam" view. In any event, I do respect your point of view, and we'll both see who is more correct when some more sales and bottom line numbers appear within a month from now.
This discussion board is a really interesting place to hang out, as we all get to read opinions about VHUB that range from Kool-Aid at the one extreme to Scam at the other extreme. My opinion FWIW is that both extremes, while having some elements of truthfulness, are way off the mark, and that the truth is in the middle, though leaning towards taking a bullish stance on the stock at current levels. (I'm not finding the various character assassinations on this board to be quite as interesting, as the presidential race has provided me with enough soap opera for the next four years.)
Here's what I think are among the plusses:
1. The company is valued in the market at less than $1.5 million, and that seems low for a company which looks like it might do $14 million in sales for the current fiscal year and which ran at an operating profit in the last quarter of the prior fiscal year.
2. The company is hedging the FDA risk by becoming very active internationally.
3. The bunch of executives/insiders own over 40% of the stock and have held onto their shares.
4. Debt, if you include "derivative liabilities" (again please don't ask me what that's all about, as my brain explodes each time I read about it in the 10K), is in the $1-$2 million range which again is not a lot for a company doing a million in sales each month.
5. There are just about no accounts receivable, so you don't have to worry about whether the receivables are good.
And here are some of the negatives:
1. The investor relations section of the company website has indeed been neglected, so the folks on the mailing list, who are already likely to be "believers," know what's going on while potential interested investors are forced to scrounge for info after they've done their due diligence on the SEC Edgar website.
2. The lack of outside, independent shareholders in the midst of a family-run company is problematic. The risk section of the 10K itself brings out this point, and while having a company code of ethics/conduct is a fine thing to have, that's just a beginning.
3. The FDA's stance is a legitimate concern, and that I believe is holding down the share price more than anything else.
4. It really WAS true, though no longer the case, that Perlingos' social media page used the word "former" as regards his company presidency. The Investor Relations function in this crazy modern era probably does need to expand into looking at company officers' social media entries.
5. Way back in spring 2014, there was a pump and dump going on, as I first became fascinated, though in a negative way, with this company when I got boiler-room calls and pumping e-mails. (I discounted this factor over the course of time when I saw that the executive group shareholdings had not declined.) It's easy to junk a reputation and very hard to restore it.
So overall I'm a bull right now on this stock. I would be more of a bull right now if Trump's campaign hadn't hit some severe bumps, given his stance regarding excessiveness of federal regulatory powers. What's most likely to make the stock run upward will be profitable first fiscal quarter numbers, to be seen in about a month, and some reported progress on redoing the debt structure away from totally short-term and into a mix of long term debt and equity, even at the cost of some dilution.
While this post, I realize, is probably much too long, I do know that I haven't listed all the positives and all the negatives. I'm looking forward to seeing the audit opinion letter revised ASAP (see an earlier post of mine in that regard), and perhaps that will provide Paul Knopick an opportunity to comment on variety of current events in the company, such as August and September sales. Thanks for everyone's patience with me.
Yes, I did send an e-mail to Paul this morning, inquiring especially about that bizarre phrasing in the audit opinion letter, but really more focusing upon what really positive "raw material" he now has in his role of presenting the company in its best light.
As I write this note, I see that the stock hasn't yet traded today, and it will be interesting to check back in a while to see what sort of reaction, if any, there is among the multitudes in regard to the 10K.
Finally - and sorry for taking so long - I've read the 10K from front to back. I know I'll never understand the Derivative Liabilities discussion, and I'm not going to worry about that. But there's one WTF moment I'm having with the report and maybe somebody could figure this out for me.
Here's an excerpt from Page 38 taken from the auditor's letter:
As discussed in Note 2 to the consolidated financial statements, the Company has no revenues, a history of incurring net losses and net operating cash flow deficits and has limited cash.
I may be old and going a little (my wife would say "a lot") senile, but how can the auditor say that the company has no revenues when there are about 6.5 million reasons in the top line of the income statement to the contrary?
I know I'm the one missing something here, because the auditor's letter must have been reviewed "ten ways from Sunday" before it hit the press, but it's driving me batty trying to figure out where my brain has gone off the rails here.
Thanks for everybody's patience with me!
I can understand your point of view here. Despite there being positive signs to be seen from a strong fourth fiscal quarter performance, this is still a company which has yet to show a profit for a full year's worth of operations, a company which has capital structure challenges (the debt is all short term), and a mom and pop operation with no outside directors to guide them.
I'd disagree with you about there being nothing positive to be seen in the 10K, especially since I've devoted a few posts to various positives. But without disagreements there wouldn't be a buyer for every seller, and a seller for every buyer.
I will make two optimistic predictions, first that Paul Knopick will soon come out with a press release that will make my optimism look like your pessimism (probably mentioning something about first fiscal quarter sales) and second that the company will be able to refinance its debt into a more stable structure, given the sales boom and recent positive operating profits.
We'll see soon enough...
Enjoy your weekend!
Thanks, Hostastock, for the good laugh to begin my day. As regards my sounding excited, it's a mixture of being happy for some of the regulars on this board who operate in this penny stock world where you're going to have losing transactions more often than winning ones (and you make money by cutting losses short most of the time) and being amazed how a company which I began to follow nearly two and a half years ago only because I was getting pump and dump e-mails (and therefore wanted to track the company's decline) has become an apparent leader in its industry.
As ever, my feeling one way or the other, or my having a positive tone in my analytical work, doesn't make me right necessarily. I'll be curious how the stock performs in the next few trading days, especially when I'm out of pocket on Monday and Tuesday.
Have a good weekend.
I'm positively impressed by the fact that they now have 22 full time employees, compared to last year's 10K number which was 24 full-time and 3 part-time employees. They're keeping employee-numbers down while sales are zooming.
The going-concern footnote seems to be typical in regard to what we'd expect to see of a company whose main financial need is to recapitalize into a more stable debt structure.
(Perhaps this is it for now, as regards my analytical contributions to this discussion board, or maybe I'll come up with more thoughts later on. I guess this is a good time for me to repeat that I don't own any penny stocks at all, and I have more of an intellectual interest in VHUB rather than any financial interest. However, the fact that I'm unbiased does not necessarily render me to be any more credible of an analyst than any of my compatriots here on this board.)
I'm impressed that executive compensation declined somewhat from year to year, but what's really impressive is that this new fiscal year will not have the burden of Justin Moreno's salary. In other words, the executives are betting that they could do better via stock appreciation than via direct salary compensation. This mitigates somewhat the fact that there are no outside directors, as there is some congruence of goals between the executives and the shareholder community as a whole.
More to come later on, probably...
Regarding accounting entries, the excess of the loss on extinguishment of debt over the gain regarding revaluation of derivative liabilities was 221K. This is nonrecurring stuff, so the reported bottom line loss is about one-third less in "real money" (my CPA colleagues would have me shot on sight for writing something like this). I keep on going back to my general theme that this company really doesn't have a lot of debt, and the challenge is that it's short-term rather than long-term.
Also, take a look at that end of year accounts receivable number which is under a thousand dollars. This is really a "cash and carry" business, meaning that they don't need to go more into debt to finance receivables (which don't exist).
More to come...
At the end of the fiscal year, convertible notes and "derivative liabilities" total around $1,275,000 (there is no long-term debt). I would believe that this level of debt is on the smallish side for a company that I'm guessing will do about #14 million worth of sales in this fiscal year. The challenge is that they need to roll over a bunch of this short term debt into long-term debt and equity, as their current ration (the ratio of current assets to current liabilities is under 1:1 when a ratio of 2:1 has been the general minimum standard for what this ratio should look like). Don't ask me about derivative liabilities, as it will make my head spin (I retired before some of these accounting principles were promulgated).
More to come later on, but so far I would believe that this company should be valued at more, probably much more, than the roughly $1.5 million which is its current valuation, using 91 million shares outstanding times a closing market price of 1.63 cents.
I'm going to be doing a few things tonight, so I'll be posting piecemeal about my analyses and reactions to the 10K.
1. Through nine months there was a NET LOSS FROM OPERATIONS of 131K, and the year-end NET INCOME FROM OPERATIONS is 231K. So the fourth quarter ran a 362K net income from operations. ...which gives me an initial impression that dilution (the reduction of interest expense at the "cost" of more shares to eventually spread the profits over) wouldn't be the worst thing going on.
2. As of today, there are 90.3 million issues shares, up only slightly from Fife's filing which would have shown something like 89 million shares issued. So I have no clue at all as to who was selling the stock when all the good news about sales growth was coming out.
3. The bottom line net loss for the full year was 635K, up from 482K after nine months. So we'll all be looking at the non-operating items (interest and the like) to see what's been going on, primarily whether these non-operating items are cash-draining or just accounting entries.
4. They've included a statement regarding seasonality which should help us down the road. They're saying that the third fiscal quarter (January through March) is the slow season, so let's not get concerned when we see a dip in sales for that quarter.
More to come later on, hope this is a good start...
Could I offer an alternative point of view? I would think that the ultimate market for VHUB will be in the realm of weaning people away from traditional cigarettes. There will be clinical trials involved, and I would believe that a number of hospitals - given feelings about the state of society on their boards of trustees - would not want to be involved with a vaping company that would claim a marketing linkage to drugs.
There's no way to tell who's right in this discussion, but I did want to put an alternative opinion out there for you and others to consider. Time will tell.
No need to correct you, because indeed you are right - today should be the day that we all go batsh*t trying to do our best analyses on what the 10K will be telling us. Perhaps the Investor Relstions consultant to the company, Paul Knopick, will be putting out a companion piece to the 10K. We'll see soon enough...
1. You've got my prayers as regards the hurricane.
2. As regards VHUB and the debt repayment, I would believe that, just like they did in 2015, if they had paid the June portion of the debt in cash, we would have seen a cheerful press release to celebrate just that. Yet, the point you make is equally true that we would have expected an SEC filing if there had been a material increase in issued shares.
3. Of course you're right that the starting point for issued shares is the 89 million number which would include the 8 million in Fife's filing.
4. The absence of current reporting on matters like these is why cautious folks like me do things like cutting my estimated value of the stock in half as the last step in making guesses (or why other colleagues on this board will even use the word "scam" upon occasion). Fortunately, in less than a week, we should all be more enlightened as to what's been going on (especially if there is a robust "subsequent events" section in the financial statements).
5. And back to where I started, my prayers as regards the hurricane!
Good evening, Hostastock, my only reason for being pessimistic regarding the dilutive conversions is that the covenants of the loan had language reading something like that the conversion price would be 70% of the average of the three lowest end-of-day closing bids over the last month (I'm doing this from memory, so please cut me some slack). The stock dipped to something like .3 cents a few times, so even if we use closing price instead of closing bid, we're talking "give-away" shares at roughly .2 cents when we multiply by .7.
So let's say that only $10,000 in debt was involved. Let's do the math together. Every dollar of debt "costs" 5 shares, so $10,000 would be 50,000 shares.
I realize we're all pulling numbers out of our Tochases until the 10K arrives in a week, but I guess that's why discussion boards exist. Given your own bullishness on the stock, I would believe that you, especially, would think that just about the only person who'd be selling shares when we were getting news reports of million dollar sales months would be somebody who's just trying to get the principal back on his loan and could do so because he got shares for next to nothing.
I hope I've answered your question, and I'm wondering what your own beliefs and guesses might be. Thanks.
Good evening, Gustavo,
As regards a guesstimate for full-year sales in the fiscal year that began on July 1, I'd base my number on July sales which Paul Knopick's press release reported at $1.2 million, so let's say $14 million. I've been counseled on this board a few times that penny stock prices tend to be driven more by gross revenues (and therefore less driven by earnings per share) than "mature" stocks. But I'm still a bit agnostic on this, so I'll base my estimate of VHUB's share value on net earnings.
For the fun of it, let's say that there's been some dilution since the 81 million issued shares number was provided in Fife's SEC filing. So, continuing on along these lines, let's say that issued shares are up to 140 million (somebody must have been selling when all the good sales news was being reported, and I'm guessing it was dilutive shares resulting from debt-conversions). But let's also assume that interest expense has been going away as debt has been turning into equity.
Bottom line of all this reasoning runs like this. Let's say that the company can run a 5% profit margin on $14 million in sales, so that gets us to $700K. So we spread that over 140 million shares, and we get EPS of .5 cents. Let's give the stock a P/E multiple of 20 (it would be higher, but I want to factor in things like regulatory risk and there being no shareholder meetings except when the Winthers have supper). So that projects out to a stock price of 10 cents per share. The final touch on this is that, since only God knows if my 140 million shares or my 700K net income is anywhere near reasonable, I'd divide my own 10 cents number by 2, and I'd conclude that the stock would be worth maybe 5 cents at this moment in an efficient market.
There's a fair chance that I'm on the low side here. If Trump is elected, look for regulatory relaxation for small businesses in particular. If there's a report that the company has refinanced away from toxic debt, look for the stock to rise as risk will have been greatly reduced. To be complete and to be fair to you based upon your posting history, there is always a "scam" risk with penny stocks; however, that risk is greatly mitigated if you follow the posting history of RPH and Hostastock whom I've come to trust as faithful reporters regarding the quality of the company's products.
Feel free, you or anyone else, to beat up on me regarding this analysis, as I'm just an amateur in this stock market segment.
Good morning, Deagle, and thanks. Let me offer a little detail on my general agreement with your beliefs.
1. As regards "trusting" any poster, I do think that there are many posters who can be trusted as regards that they are presenting their honest opinions (or even facts at times, when you see references to documents like SEC filings). Their "honest opinions" may at times be biased, which is to be expected if one is holding shares in the particular company. "Trust" differs from "reliance," in that it is generally a mistake to rely upon any one opinion, post, or poster as having a monopoly on wisdom.
2. Some posters are more easy to trust than others. Posters who do business with the particular company can be trusted, at least generally and more than that when you've interacted with them for awhile, as regards the "realness" of the company as contrasted to the company's being just some sort of scam operation. However, their opinions on how the stock will perform going forward, while having some advantage in terms of how good products create sales volume which in turn grows companies, are not necessarily Gospel, as so many other variable beyond product quality come into play.
3.Also, posters who either cheerlead or dump (and your point about seeing what for instance VHUB posters do on other discussion boards is excellent) are far less easy to trust than those who offer analyses.
Have a good day for yourself. If I find myself blessed with some spare time today, I'll go see your handiwork on other discussion boards.
...and just to complete the picture, Hostastock, I visited that Facebook page which had the spurious use of the word "former" as regards Jake Perlingos' presidency of VHUB, and whatever was there isn't there anymore. I also checked Jake's Linked-In page, and he's most definitely company president still.
I'm going to make a SWAGuess (I think it's a familiar term) as regards what news is brewing for the company that can't yet be disclosed. I'll bet a week of your shop's sales that the company is well along in the process to secure non-toxic financing, whether via debt or equity issued at a non-dilutive price. The level of sales of this company infers that they don't need a lender of last resort to keep them afloat.
I do think that it's good times ahead for the company and its shareholders, though I would keep on listening to contrary opinions and treating the opinion-giver with respect, especially when reasons and logic are presented for such opinions.
Good evening, Hostastock,
Indeed as you've written, it is "good work" by the company, and it is also good work by you as regards the proximity of your own projections to the reported estimated reality in regard to sales for the fourth fiscal quarter.
If I may go a bit more into depth here, starting with your own calculations as the basis:
1. The nine month 10Q had year to date revenues of $4.45 million.
2. The NT 10K shows revenues of $6.5 million.
3. Therefore, the fourth quarter revenues were, as you calculated, $2.05 million.
4. The late July note from Paul K. gave the June revenues as $1.05 million.
5. If we add the June revenues to the nine month revenues, that takes us to $5.5 million.
6. ...which means that the sum of April and May revenues was $1 million, or an average of $500K, which is in line with the average monthly revenue of the nine-months ending March 31.
7. Therefore, something major in a positive direction happened in June, presumably international sales really kicking in, which continued into July, and hopefully has continued into the new fiscal year.
While I still think that the April and May revenue numbers should have been furnished when the June number was provided, that's just "old business" and not really relevant anymore. What is relevant is that a really conservative projection of revenues in the new fiscal year would be $8.2 million, if we just annualize the fourth quarter number.
But if we bring into the picture the July revenues of $1.2 million and use that along with the June revenues number of $1.047 million, that would lead us to project the new fiscal years sales to be about $13.5 million.
But now is when I bring out the caution signal. Until we know the latest number for issued common shares, we really don't have a way of knowing to what extent the stock may be undervalued in the market. But we'll know on October 13, I believe.
As ever I may be wrong, but I do think that today (the 28th) is the day when VHUB files with the SEC either its 10K or the form indicating that the issuance of the 10K has been delayed. If we see the 10K, I'll be looking at:
1. Calculating the fourth quarter, by itself, results, as this may be a better starting point than the full-year results for use in making a first projection of results in the new fiscal year.
2. Executives and their salaries, particularly putting the Perlingos question to rest. I would want to compare salaries from year to year.
3. Issued common shares to see what sort of dilution, if any, has taken place since the time we first saw the 81 million number in an SEC filing describing Mr. Fife's involvement via entities like Typenex and Iliad.
4. The subsequent events section.
5. The risks section of the narrative, particularly relating to the FDA and perhaps to ijoy.
6. Dealings between board members and the company, particularly whether the Winther CPA firm is mentioned again.
7. The paragraph about the company as a "going concern," to see if the language materially varies from that in the prior 10K.
8. I'll also be curious to see if a separate press release is going to be promulgated about sales in August in order to see if the motif of monthly sales over $1 million has been preserved.
So maybe today will become interesting or we'll just see, late in the day, that we'll need to wait another couple of weeks to see "which end is up" with this company. Stay tuned...
Good morning, Hostastock,
The numbers on the 10K will be interesting, but we'll need to do a little work ourselves to make those numbers as meaningful as they can be. The 10K, as you know, doesn't have a column for fourth quarter results by themselves, so we'll need to be subtracting the 10Q nine months results to see what the fourth quarter looked like - and from there to make whatever projections we will make about this new fiscal year.
I need to remind myself every so often that this is not a NYSE company that provides earnings guidance - and so here we all are on a message board trying to read entrails and tea leaves. Or, as you have written, some press releases would be helpful (not only as regards to earnings, but also in regards to how many issued shares there are over which to spread those earnings).
Have a good day for yourself, and if time is going to stop, I hope it will stop while something pleasant is going on!
Knife, thanks for your "random act of kindness." You never know what a difference even something that seems small can make in another's life.
Have a good day!
Good evening, Gustavo, the 10K is due to be filed on Wednesday, September 28 (source: Non-Accelerated Filer with June 30 fiscal year).
However, last year the company got an extension, and the 10K was filed on October 13, 2015.
As regards your smelling a rat, there are three possibilities that I could imagine:
1. Dilution that has occurred which has been suppressing the stock price.
2. That troubling Facebook notation on Perlingos' page about his being "former" president of the company, despite evidence to the contrary.
3. My old point about how April and May sales were not announced when the company celebrated the June sales crossing $1 million.
But there are also roses that could be smelled:
1. It's about time for the company to say something about August sales. A third consecutive month of million dollar sales would be a really bullish indicator. To be fair, that rose turns into a rat if there's no press release before (you can pick the date).
2. Getting the ijoy situation under control would be helpful, and the company made a strong start in that direction with its letter to the dealership community.
3. Looking down the road towards the presidential election, a Trump victory infers that there'd be a cutback in regulations, particularly for small businesses.
4. If the company is generating sales at over $12 million per year, they should be able to secure non-toxic financing and get Typenex/Iliad/Fife out of the picture.
I guess we'll see soon enough as to what's going on with the company. The first thing I'm going to be reading when the 10K is issued is going to be the Subsequent Events section, as a lot of what we're interested in involves post-June 30 events.
Hostastock, your input here is always valuable because of your unique vantage point as their customer. Your post brings up some fascinating questions:
1. Clearly - and it takes no great skill in between-lines reading - you heard from Paul that Jake P. is alive and well at the company. The question then becomes what the heck was Jake doing in putting in his Facebook page the word "former" as regards his presidency at VHUB. Otherwise phrased, there are various ways to do "homework," and sometimes the answers will differ.
2. An equally interesting question is whether Moreno had a non-compete clause in his contract, as one could picture ijoy pursuing him (or already having landed him for consultation purposes). On the other hand, I recall Moreno's resume included his service in the Marines, and I have not yet encountered a dishonorable Marine.
3. Your reference (I think) to me about your not being able to get into it like some others makes me even happier to have retired 3+ years ago, so that I have the luxury to pick my priorities. The topic of VHUB really is pretty fascinating in terms of its challenges as a family business in a now-regulated industry being lodged in the penny stock market where there's lots of corruption and market-inefficiencies to be found.
Enjoy your meetings to the extent that anyone can enjoy meetings!
I don't do snark, simply because - like just about the rest of humanity - I have a long history of being wrong (just ask my wife). So let me weigh in, with much respect for both principal fellow-posters in the current debate, on the matters under discussion:
1. It is a fact that the Investor Relations section of the VHUB website is woefully out of date, as both the press releases and SEC filings don't have later dates than August of a year ago.
2. The management section of the VHUB website does list Perlingos as President and Chief Technology Officer, which is in at least partial conflict with Perlngos' Facebook page which self-admits he's "former" president, but is silent as regards Chief Technology Officer.
3. Getting back to the first point I've listed, one would imagine that the company website is an aspect of the company's technology, so if Perlingos has any responsibility here, he does not appear to be carrying it out. Perhaps this was part of Justin Moreno's domain when he was chief operating officer, and something has fallen through the cracks since maybe even before the transition away from Moreno.
4. I have immense respect for the work that Paul Knopick has been doing as Investor Relations consultant. The one aspect in which I (from my background as a CFO, albeit as a nonprofit CFO) would have taken a different approach - and I've mentioned this in earlier posts - is that April and May sales must have been available when the splendid June sales were announced. It creates a degree of suspicion when known info is intentionally not being released, and I would believe that suspicion is a worse situation than even a negative fact-set, as investors and potential investors are very good as presuming the worst scenario.
5. The word "Limitless" does appear a lot on the ijoy website, along with such broken English everywhere in that website that I think very few people would dare to do business with them based on the initial impression that the website presents.
6. Somebody has got to be selling all those VHUB shares. We have a guess who's buying - just look at all the new names that have popped up on this board. As regards the sell side, the most natural guess would be that Typenex/Iliad/Fife is unloading the 8.1 million shares that have been disclosed that they own. The question is whether they have replenished those shares via conversion (remember that they're limited to 10% ownership of the company) and are selling shares that have a cost basis to them of perhaps as low as .002. We just don't know.
5. The 10K, which is due soon (eleven more days, I think) but historically has taken until mid-October to be provided, is going to answer a lot of questions, as long as there is a vibrant "subsequent (i.e. after June 30) events" section. Notwithstanding the 10K, if there is a report on August sales forthcoming in about two weeks, and if that report shows still one more month above the $1 million benchmark for sales, that could finally set the stock past the resistance at even .016, which is the price at which Typenex got into the company originally.
6. Also, I wouldn't be surprised if VHUB could secure financing at favorable terms if sales are progressing at over a $12 million annual rate - that press release would do wonders, I believe, for the stock price.
And so we've got a very mixed bag here for VHUB, and I can understand the strong feelings in each direction. The posters who do business with the company see the quality and breadth of the product offerings every day, and the posters who do not have such intimate connectivity with the company naturally tend to focus more on the concerns regarding imperfect or non-current financial and personnel info about the company.
I hope this post has helped provide some fraction of the "homework" that's been the bone of contention recently. Nobody "died and made me king" here, so feel free to rip this post apart where I've gone off the mark, but civility would be appreciated - because there may be other potential posters out there who have something to offer this board, and they might be more willing to contribute if there's more light than heat here.
Wishing all a good Labor Day!
With no disrespect to BobKS, I just looked at his source for reporting Jake P's departure from the company, namely the Facebook page. Indeed, BobKS is quite correct that Jake states that he is the former president of Vapor Hub. But that could very well be because he is the current Chief Technology Officer of VHUB, having evolved out of the presidency and into his current role. All of that aside, the brouhaha with the ijoy folks seems like pretty serious stuff.
Enforcing patent rights may be as expensive as getting products cleared through the FDA in a couple of years.
I do think that your primary point about the company's needing to communicate more and better with the investor community is spot-on. The Investor Relations consultant, Paul Knopick, has in my opinion done a fine job here for a couple of years, and I do think that more openness on the financial and personnel picture (e.g. what's going on with debt conversions, why did Moreno and presumptively Perlingos leave, what were sales in April and May since they told us what sales in June were, etc.) would be beneficial to both the company and its investors.
I realize that there is a thin line between press release material and SEC filing material, and that there's a need for greater legal and substantive precision in SEC filings - but I do believe that companies which can be trusted to keep their shareholders updated are rewarded with higher price-earnings ratios in their stock (and this company may very well be on the verge of actually having positive earnings).
It would be interesting if the sell-side on all the high volume of recent weeks has been more attributable to Perlingos (and Moreno as well, perhaps) selling shares rather than debt-conversion newly-issued shares being dumped by Iliad/Typenex/Fife. I also wouldn't rule out - though you might think it to be a real stretch - that Perlingos resigned so that he could put together an offer to buy the company.
We'll see soon enough, I guess. Thanks again for our interactions this morning.
Just to add to my prior post, I couldn't resist the temptation to find the ijoy website. It was indeed a bit jarring to see that they claim ownership of the Limitless brand (notwithstanding earlier commentary on that topic via Hostastock's - thank you as always! - furnishing of a VHUB alert to its distributor community, if I'm remembering correctly).
What I found almost as remarkable was this quote which I'm extracting from the website:
"ijoy is leading electronics brand originated from United States , IJOY owns the most excellent electronic cigarette R&D team. IJOY insists that the success of the products is the deeply understanding and combination of business, technology and the end users. To know and meet the target users indeed needs and
expectations that’s what IJOY pursuing."
I have enormous respect for anyone who has pursued English as a second language, but there still is some sort of responsibility to have one's work checked out when you're trying to create a good reputation for your employer or client.