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What news are people talking about coming out next week?????
NASDAQ uplisting (if all goes well) :)
We are a ways away from that possibility...
What additional news is expected next week?
At least we know Dan's motivation aligns with ours...
I sure wouldn't be satisfied if my investment was down over 10% after over a year....
Keeping your cash in the bank would have been a better investment with that return...
That is the only way I see the share price improving moving forward.
I believe the market is valuing the company based on the current shape of the business.
Once the business conditions improve, the share price will improve...
"If we do not obtain additional financing, we will not be able to conduct our business operations, refinance or repay portions of our indebtedness and achieve our business objectives."
Yes, we just received some good news...but this was good news because we needed it or our shares would have been worthless.
We are far from all the bad news being on our backs, the $41M was our survival funds (we would not have survived without it).
If we don't see revenue growth and reductions in expenditures, we are going to see further debt and/or further dilution (maybe both).
The stock price is where it is because the company has massive debt and is not profitable, so unless the financials improve the market will have reservations and factor in the risks...
I am chill buddy :)
Just answering the question as to why someone would loan $41M even if they anticipated default...
Anybody who knows anything about Chapter 11 restructuring would know that the approved restructuring plan would see this senior debt holder given most (if not all) of the restructured equity (leaving us with nothing).
So for your $41M, you walk away with 100% ownership (at minimum controlling interest), an improved B/S (due to liabilities being wiped clean), and a more financially stable company.
Something like 150% premium to the Company's 20-day volume weighted average price when it is in that range would be sweet.
Who wouldn't accept that offer?
LOL
You read any stress in any post I made?
You actually read what I have posted? I am saying I do not think bankruptcy is a near term possibility.
However, it is a possibility and the company themselves have stated it.
Also, you have never heard of loan holders taking over a company after a missed interest payment caused default? Who wouldn't like to control an asset that was worth $560M for $41M?
So ya, I can see someone ready to loan ECIG $41M if default could result in them owning the company.
I don't want that...not today anyway.
Maybe when the pps is higher an offer to acquire would be appealing.
Well from a revenue perspective ECIG generates about 0.15% compared to PMI revenues so maybe $5.20/sh would be a better equiv. assuming all else the same...
But ECIG is a long way from $4.76 EPS and a $3.88 dividend...
1% of PMI's worth? So ~ ECIG Market Cap of $1.3B? That would be amazing!
$300M in annual sales and profitability = $34.75 share price
Hey, I see the upside (otherwise I would have sold before the R/S and doubled my $s)...
I am hoping for $500M market cap down the road. That would be great for me :)
Before the 10-K was released I was overly optimistic and had some pretty wild aspirations (might have been a little greedy). My expectations have been tempered to say the least, but I do still see potential here. Just a longer timeline and allot of work for management to undertake.
I am also not banking on anything and realize I might lose my investment, but for me the reward is worth the risk. Just want to make some points that this is still a very risky investment and the $41M is just a step in the right direction.
People can buy and sell as they please...
I just think people need to be realistic and realize we have a long way to go...
People really should look at the B/S. They also need to review the 10-K in full.
Yes, this loan addressed the toxic debt, but...
They have $18.6M in current assets, of which $6.2M was cash and A/R.
They have $80.7M in current liabilities (excl. the derivative and warrant liabilities).
So cash & A/R just compared to A/P is ($16M).
Debt to Asset ratio of 1.91. 190% of their assets have been financed with debt. This debt needs to be serviced and if they cannot meet the debt covenants through operations than you have 2 options: 1. Issue more Capital to raise more $s or 2. Chapter 11 (stop the bleeding).
Cash Flow Statement - ($29.7M) in cash from 2014 operations.
They are massively leveraged and need cash to service the debt, but they aren't generating enough revenues to cover their operating expenses. So ignoring any risks associated with the Industry in general, financially they are a long way from being above water.
"Our independent auditors have indicated in their report on our December 31, 2014 consolidated financial statements that there is substantial doubt about our ability to continue as a going concern"
"We cannot assure you that we will achieve sustainable operating profits as we continue to expand our infrastructure, restructure our balance sheet further develop our marketing efforts and otherwise implement our growth initiatives"
"We and the businesses we have recently acquired have limited operating histories and we cannot offer any assurance as to our future financial results, and you should not rely on the historical financial data included in this Report as an indicator of our future financial performance. You may lose your entire investment."
Chapter 11 is not in the near term, so we don't need to worry about that for a while. They have time to further address their B/S, increase their revenues, and reduce expenses (basically become profitable). They also have 263M in Treasury Shares that can be used to obtain more cash if required.
I think what the BORG was referring to was if they file for bankruptcy, someone can come in and buy the debt for pennies on the dollar leaving creditors with minimum and shareholders with nothing. Might happen, but if Dan continues to do his thing I do not see that happening.
The way I look at this is similar to oil and gas.
Big oil and oil producing countries have a vested interest in keeping their industry going. The lobbying $s are huge.
Big tobacco and tobacco producing countries have a vested interest in keeping their industry going so I wonder how much lobbying is going on that has resulted in these bans and restrictions.
At the end of the day, with the health benefits I see, I cannot see this Industry folding. Just wanted to point out it isn't a sure thing.
Twitter, like all Tech companies, raises capital based on speculation and the valuations are crazy. Plus, it is not an apples to apples comparison when your talking billion $ valuations to a couple hundred million $valuations.
Revenue is key because the company is bleeding cash. These are not book losses, so unless we want further dilution to take place the company is going to need revenues to meet their operating expenses. This $41M was nice because it addresses the toxic debt. Put without further capital, revenues are important.
Yes, the NOL can be sold, but we need ECIG to stick around long enough for that to happen.
I personally agree with you regarding the bans/restrictions, but just wanted to point out that there are significant risks for investors in this industry and wanted to counter the pumping a little.
Appreciate your response.
Yes, that too.
But some risks have a higher likelihood than others....
Let me start by saying I want this stock to fly. I want to make a boatload of $ on it and I hope the future is positive.
Industry growth has been huge over the past few years. I believe the product is a much healthier option for smokers and the general public (no 2nd hand smoke). The potential is definitely there.
However, what if revenues for Q1 are flat? What if the net operating losses continues to rise? What happens if more Countries ban the products outright (Brazil, Argentina, Hong Kong, Singapore, Uruguay, United Arab Emirates etc. have banned e-cigarettes) or regulations strangle the industry?
ECIG may have "one of the largest distribution network in the world and a slew of good products", but distribution is not an issue for anyone entering the market and none of ECIG products are unique. This is an extremely competitive and risky industry and market share is not guaranteed.
This is not a sure thing, there are huge risks and those should not be ignored.
Q1 - So this one is most likely going to drop before it moves further up?
A1 - Maybe. History shows that to be the case, but history also shows some colossal collapses...
Q2 - Is there a good way to feel out how much it will drop?
A2 - You can look at charts or maybe someone has an algorithm they want to share with you :)
Q3 - What may be a better option to be buying right now?
A3 - Go to the nearest casino and put your money on black (or red if that is your preference).
Seriously, you should not get advice from a message board and you should not invest in any OTC stocks with money you cannot afford to lose.
Anybody who bought this stock today has the opinion that the share price will rise and anyone who has shorted the stock today has the opinion (or ability to drive the price down) that the price will drop.
Today was a really good step for the company, but read the whole 10-K (specifically Item 1A Risk Factors). This company has a massive Net Loss. If you are looking for a "safe" investment, look elsewhere. Read how Warren Buffet invests (invest in companies with positive ROE, not allot of debt, good profit margins, etc.) and look for a company that fits the criteria but is currently trading at a discount (good fundamentals, but trading lower than they should be).
I am pretty sure I will be out before $15 :)
I invest in dividend paying blue chippers, ETFs, REITs, etc.
I gamble with companies on the OTC market and other speculative plays...
Not so sure about any "creative accounting" talk.
Revenue recognition needs to be GAAP compliant and the SEC has specific criteria.
I definitely want to see revenues increase (30% would be great), but they need to get their expenses in line in order to become profitable. So I am going to evaluate the expense side of the Q1 report.
Awesome!
Wish I had done the same, but after that 10-K was released there was no way I was putting in more $s....
Don't get me wrong, at $3.00 I am making $s but if it takes until 2017 to get there I will be disappointed.
Okay, I am confused now.
You posted before that you were in at 0.18. That was pre-R/S so your investment was at $2.70 in today's pricing.
You also said you bought 500 more on March 13th, so that would be in the $0.16 area which is $2.40 post R/S.
Maybe you can help me figure out your 650% gain?
For you to gain 650% when the pps is $3.00, your avg. pps needs to be $0.46 or $0.03 pre R/S.
I am not saying you didn't buy post-R/S at an avg. of $0.46, so maybe that is the case....
LOL - $3.00 by 2017
That's awesome...and equal to $0.20 pre R/S, which is where we were 2 months ago..
This is an extremely speculative buy. You should only invest what you can afford to lose.
In the 10-K itself the company stated, "You may lose your entire investment".
This company just received a qualified opinion on their year end financials. The auditors expressed reservation as to whether this company can continue to operate as a going concern.
Everyone who is thinking of buying shares should read the whole Risk section of the 10-K. I wish this was available as a reference prior to me buying shares (I would have had second thoughts and definitely would have tempered my expectations).
Some key points:
1. They owe more than they generate in annual revenues. $58M in debt compared to $43M in Revenue
2. Their Selling, General & Admin expenses are greater than revenues. This is not factoring in COGS & the Goodwill Impairment. This is a huge issue. Debt and Equity is what funds this company's operations.
3. As a result of 1. & 2. they NEED to obtain additional financing or they will not be able to continue to conduct their business operations.
4. As a result of 3. there will be further dilution, so that needs to be factored into the future (speculative) value you place in this company.
On the plus side, I still believe in this management team and the industry is growing at a massive rate. They are doing what they need to do to keep their heads above water, but nothing is certain right now. So many variables that this could pop or turn to dust.
I am a gambler by nature so okay to see how things play out...
You should not compare 2013 to 2014.
Their acquisitions were made in Q1 of 2014, so obviously their Revenues were going to increase from 2013.
Apples to Apples, their Revenues did not significantly increase and actually decreased Q3 - Q4.
I am not bashing here, just stating the facts.
I am not selling for a loss right now, but I am a realist and I know I wont be selling for longer than I anticipated.
Well said. Great post!
2014 Q2 Rev - $11.3M
2014 Q3 Rev - $15.9M
2014 Q4 Rev - $15.7M
No Rev increase from Q3 - Q4 = disappointment and sell-off.
Annual 2014 Rev well short of $75-$80M expectation.
Hard to see how they get to $200M in Rev for 2015...
Well....the 10-K wasn't as good as hyped...LOL
Hard to see $200M in Rev for 2015, guess I will wait for Q1...
$3? That is only $0.20 pre r/s. If that was the goal you should have sold pre r/s because it was already there...
Very disappointed in the Q4 Report, thought Revs w/b $10M higher...
I played this wrong, but still believe the future will be brighter.
Based on this, it appears there is some latitude, but the market will not view this well...
Securities Exchange Consequences of a Late Filing
In the case of a company with securities quoted in an over the counter market, like the OTC Bulletin Board, there are no listing requirements. However broker-dealers participating in the OTC Bulletin Board markets are members, and governed by the rules, of the Financial Industry Regulatory Authority (FINRA). FINRA Rule 6530(e) prohibits members from quoting the securities of a company that has failed to timely file a required report three times in any 2-year period, or that has had its securities removed from the OTC Bulletin Board quotation service twice in a 2-year period for failing to file a required report within 30 days of the filing deadline. Once a company’s securities are prohibited from being quoted on the OTC Bulletin Board the company must timely file all required reports for a period of one year before it can regain eligibility.
Very concerned because the market will view this very poorly and that is not good from a pps perspective...
If they are late filing this report, tomorrow is going to be a blood bath....
Symbol change due to the reverse-split.
After 20 days the symbol will go back to just ECIG.
The EDGAR system hours of operation for submitting files are 6:00 a.m. to 10:00 p.m. Eastern Time, weekdays, excluding Federal Holidays. Files submitted after 5:30 p.m. Eastern (with the exception of Section 16 filings) will receive the next business day’s filing date.
Companies may request a filing extension for their Form 10-Q’s and 10-K’s by submitting Form 12b-25 via the EDGAR system. By filing this form, a filer may gain up to 5 additional days to file Form 10-Q or 15 days to file Form 10-K. Companies have up to 24 hours after the original filing deadline to file Form 12b-25.
Rough Calculations...
Q3 Results:
$31.3 Rev
$20.8 COGS (66%)
$8.9 DM&A
$43.2 SG&A
($43.1) Net Loss
Q4 Est. (~$40M Q4 Rev):
$71.3 Rev
$47 COGS
11.9 DM&A (2.7/Q)
57.6 SG&A (14.4/Q)
($45.2) Net Loss
Q4 Est. (80M Rev total):
$80 Rev
$52.8 COGS
11.9 DM&A (2.7/Q)
57.6 SG&A (14.4/Q)
($42.3) Net Loss
Note, at $50M Q rev, this Co. is almost a net earner:
$50 Rev
$33 COGS
$2.7 DM&A
$14.4 SG&A
(0.1) Net Loss