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when you are in at 20%-40% of the $0.0001 price (like Tonaquint) you actually can pocket a nice margin at $0.0001. They are not investors, just financial guys clipping coupons. The want their money back as soon as they can get it and not playing the stock for a long term investment.
I have said this before. My guess is there a supply of shares that are being sat on by Tonaquint that are impacting the actions of the market makers. Tonaquint likely still has a few hundred million shares left to sell that they can sell at a profit at $0.0001. This overhang has to be cleared. The new MM rules are likely impacting how and when Tonaquint sells these shares and which MM's are willing to handle the transactions.
I don't know how you can assume that a private company wants to go public. There is a lot of compliance (SEC, Sarbanes Oxley compliance) that comes with being public that they don't have today.
It is clearly safe to assume LRS 2018 sales are higher than 2017 and that LRS still exists as a corporation. Other than that the whole going public idea is opinion and speculation.
My guess is that some of the shares showing up on the ask are Tonaquint/Fife's shares. He has shares that were issued before the change in MM rules. He could be dripping these out.
He is the one shareholder that can sell at .0001 and turn a nice profit since he got the shares at 20-40 cents on the dollar on his conversions.
Rail from western Canada to Chicago is $60+ per ton in tank cars. It makes it too costly for feed. I agree you need a digester in Canada to supply feed in the Canadian market.
I have always thought the play for Choice Farms to convert their chicken poop into feed for their own consumption and for sale to other western Canadian producers. They have grain and chicken poop so they can make their own feed.
AllSource has four trucks and less than 10 employees.
The majors have a number of facilities, hundreds of employees working just in feed. The coops have input they get from their members at cost and reprocess for sale to their farmer members. By the nature of being a coop they have built in customers and a lower cost structure.
Don't get me wrong this can make AllSource bigger but the majors all have much larger footprints and sales volumes.
they are already supplying some organic product to feed producers and blenders. the issue they likely have is they are sourcing from a number of smaller suppliers. Bio-Art would allow them to produce in bulk and on a more consistent basis.
AllSource will never be a major feed producer since this market is highly concentrated by the big guys (Cargill, ADM, Land O'Lakes, CHS, Tysons).
you said they were operating for the US government in your note.
They are not they are merely licensed to operate on the rods like every truck and bus that crosses state lines.
You would never truck chicken sh!t from Canada to Illinois by truck (too costly and you would need different environmental permits to bring it in from Canada). They would need to go rail. You would never ship animal feed that far anyways it is not a high value product to handle the shipping costs.
My guess is that AllSource intends to supply animal feed from organics to larger producers like Cargill, ADM, Land O'Lakes, other farm coops. There are a number of feed processing plants in the Midwest (in Wisconsin and Minnesota) that take organics and blend them with mill and other material to make feed.
This doesn't mean they can conduct government business. It is their federal government registration to operate trucks on US government roadways. All trucks operating on the interstate system need to register federally and in the states they operate.
Note they are not registered as a waste and garbage hauler, just to haul waste water.
If you looked up LRS or Waste Management you would see they are also registered, but for garbage/refuse.
T
My guess is that the decision was a lot more complicated. Advance also has a waste transfer station, a CNG truck filling station and a recycling center in Batavia. They invested a few million dollars in Batavia operations the last three years. I am sure they would want to be compensated in some way for this or would need to replicate the recycling center for local residents.
In addition Advance being 8x the size of LRS has a lot more weight to throw around.
the converts are still there and mostly held by Tonaquint/Fife. The good news is that they can't be converted anymore into shares (without a legal opinion acceptable to the MM) so they are basically high coupon debt.
sorry typed to fast
A farm is likely not at
1) the LRS California site (not big enough and no permits)
2) The AllSource site (since it is a warehouse in an industrial park not conducive to building a series of machines)
LRS has a series of other sites. Northbrook and Skokie are not configured to house a farm. Need to check out other sites.
It may be something they are talking to Allsource about rather than something under contract.
If they are building something it is likely not at
T aLsOURCE SITE (TH
If they are building something it is likely not at
T aLsOURCE SITE (TH
see my message. The only permits relate to the initial machine
Not in Chicago. A licensed contractor needs to pull the permit unless te owner or the contractor employees certified electricians. The permit will always be in the name of the electrical sub
CMI
There are two open electrical permits for the LRS site on California. One is for general electrical wiring and the other is for the electrical wiring for installation of a feeder. They were issued in May and June of last year. project cost for both $58k. Neither has been closed which means the city hasn't singed off on the final project yet. They were issued to D&G Electrical in Crete, Illinois (who could be a sub on the job since ECOS can't get a permit as they are not licensed).
No new permits in the cue for anything else at the California Avenue site for any other projects which means no farm at this site. I don't think you could put another digester on this site due to its configuration and othe ruse by LRS.
DG
You can't convert the organic output to natural gas for use in a vehicle. The technology isn't there yet.
A number of people like BioMcn actually sell their gas to other producers for use as an energy source. You can use a gas refomrer to crack the gas to make heat and power.
US Natural gas is so cheap and will be for the next ten years that converting a fleet from NG to something else isn't really economical. I wouldn't see LRS or any other large fleet swapping out an NG fleet for another fuel source. NG is $3 per mmbtu and (sub $3 in a number of markets). The cost curves show more supply and prices staying low.
I think the play for ECOS is to produce methane which can be sold as a fuel gas. They need to be able to transport it to a user or put the plant near methane consumers.
T
The technology that powers an engine on natural gas is different than that which you would need if you use organic waste as a fuel source. The Europeans (Volvo) have worked on technology to use biomass as a fuel source for trucks. The Chinese currently use this technology. The engines use methanol from biowaste.
There is a company in Europe BioMcn (which is owned by the conglomerate (OCI) which is producing methanol and biomethanol from organic waste. Methanol can be used as a fuel source and can be mixed with gasoline to produce other fuels. They also sell it to industrial methanol users.
This would be interesting. How did you hear about this? If it is really a deal, ECOS would be under an obligation to disclose a deal of this magnitude under the securities law (it would be a material agreement). They should have filed an 8K.
Since AllSource is in the protected area given to LRS under their deal (180 miles from the California avenue site) you can only surmise that
(i) LRS would be getting a cut of or is in any AllSource deal;
(ii) LRS has waived their right under their deal with ECOS (they wouldn't do this for free); or
(iii) the LRS deal is off (at which point ECOS would not be bound by the protected territory rights of the LRS deal).
The only reason that this is possible is that they had $9k in cash at 9/30/17 and have the following fixed expenses
Rent $40-60k per annum plus utilities, oper exp and property tax
Accountants $22k per annum
Salaries $450k per annum for the two Kwaks and Siegel
CFO Salary $48k
Other Salaries for other employees
Even if they defer the Kwaks and Siegel's salaries (which they have done in exchange for shares before) there isn't enough cash to cover the other fixed expenses.
Or they don't have the money to pay the external accounting firm their fee for the annual audit.
Jabez
In pennyland compliance with securities laws is not something that is followed by many companies. I have always viewed the fact that ECOS hasn't always adhered with the securities rules as an insurance policy for investors. If this doesn't work out (which I hope isn't the case) the investors can always go after the elder Kwak (who actually has some money and assets).
The anti-fraud and disclosure rules apply to every issuer. If you withhold information to manipulate the price of our shares you expose yourself to personal and criminal liability. There is no exemption from these rules.
ECOS can delay reporting financial information. However, the company and its officers should not sell shares, issue new shares or purchase shares.
they are not exempt from the securities disclosure requirements or trading on insider information. Their is no exemption from that.
There is only one problem with that idea. Intentionally withholding information to manipulate a public stock price to effectuate another transaction involving the stock is classic securities fraud. Don't think they are stupid enough to do that.
The Korean company doesn't own ECOS (see my earlier post). ECOS is merely a distributor of the digester and all of the other products on their website.
The ECOS connection to the Korean companies that they distribute for is through Jeung Kwak (James Kwak's father).
DS how do you come to that conclusion from the SEC filings.
ECOS has a Korean subsidiary K-MBT (Korean Micro Bubble Technologies). K-MBT had the rights to the diesel fuel and lithium battery technologies years ago (under license form a Korean company).
The voting control of ECOS is in the hands of the two Kwak's and Siegel through their super voting preferred stock.
The common is owned by the 180 public shareholders (non of which has a controlling interest or a more than 10% interest per the SEC filings).
There is a Korean company which owns the digester technology and which ECOS is the distributor. Since they never filed the distribution agreement, we actually don't know any of the terms of that deal (compensation level, term, etc.).
not so fast. they are working on a new version of the digester that takes your shares and turns them into recycled paper. why dump them and pollute when you can recycle them safely and properly
Hey Kwak
You need cash and can't sell shares. You have a project to finish and the potential to sell more digesters. Rather than borrow more money from people charging 39% interest, why not pursue a local investor. He will clean up your balance sheet. See link below.
I know you read this site and this guy likes eco-friendly businesses
https://www.marcuslemonis.com/pages/submit-your-business-plan
Or they could bring the chicken coop heaters and have the chickens do aerobics while laying egs. The possibilities are endless. What scares me is Kwak might actually do something like this.
If he could only get MS to do the workout video we would all be a lot better. I think the workout video is a tease for their new product. We haven't had a new product in 2+ years
He is Mike and Becky's kid. Looks like Dad gave him some work to do on social media. Trust me Mike Siegel doesn't eat like that.
The MM's are afraid of them. The issue is that you are taking a risk that the shares that you are getting from the note holder and flipping into the market are not securities exempt from registration. That is a risk that nobody wants. No lawyer worth their salt ill give you an opinion that the shares are exempt from registration (which is what MM's are asking for)..
This change coupled with tightening of the naked short rules (which note holders have used in the past to suppress share prices) have put a definite chill on the note market.
The best way out for issuers (like ECOS) with note obligations is to try and sell shares into the market using a normal registration statement to raise capital to pay off debt. Unfortunately in pinkyland that is hard to do. Who would buy those shares.
My guess is the note holders just sit here and let there notes earn default interest and hope for the best.
Don't worry that won't happen for long
I do like the chicken little syndrome about BK.
I would agree with DS that the debt is not huge especially when you put in context of who they owe money to. I annotated some excerpts from their last SEC filing which should allay some of the BK fears. The real debt of this Company owed to parties who can be meddlesome is closer to $1.2m not $8.7m.
The real fear to stockholders is that the way to deleverage is to convert debt to equity which would throw a lot more shares in the market. The good news is they can't do that until they get current.
Customer deposits $ 175,000 (1)
Convertible notes payable $ 896,666 (3)
Notes payable-related parties $2,773,623 (2)
Current Portion Long term $ 1,016
Derivative liabilities $1,842,555 (3)
Acc Exp and sundry current liab - related parties $1,847,267 (2)
Accrued expenses and sundry current liabilities $1,132,457 (5)
TOTAL CURRENT LIABILITIES $8,668,584
Long term debt $ 73,984 (4)
TOTAL LIABILITIES $8,742,568
1) $175k- This deposit goes back to the old diesel emulsion project days. It has been outstanding forever. If it was an issue it would have surfaced much sooner. They can't write it off since they legally owe the debt, but the counterparty has walked away from it.
2) $4.6m- This is money the Company owes to shareholders like (i) HanscomK for their loan; or (ii) executives for unpaid salaries. These debts can be eliminated by capitalizing it into shares. They are not going to BK over salaries since they would have claims against themselves.
3)$2.6m- This is the money owed to the convertible note people. They are stuck like us. They can't convert and flip under the new rules. They likely wouldn't BK the company as their is nothing to be had.. They will just want to be paid out first.
4) $75k- Is per the financials are real 3rd part obligation to a Bank. it carries interest at 39% per annum. It is allegedly to a bank (which is suspicious since it carries a rate well above the usury rate). This creditor is the real threat to a BK but you need two creditors to force an involuntary BK.
5) They have never said what is in this category of obligations. Likely includes rent and other accruals. Kind of high but if it is general business obligations these types of creditors don't commence their owe BK they pile on someone else's party. Why? Because they are unsecured. They can't just stop providing services
Now now I am not infallible. I have been wrong before and will be in the future. Just don't tell my children or my Rabbi.
I would like DS to be right, but after all these years in ECOS, I would be happy with .0003
yes at one time (like now) they had products with promise and potential. I view the money I have in here as piss in the wind money so if it plays out I win, if it doesn't I may not be able to get the extra large coffee every day in retirement.
yes their plan but not evidenced by any real orders. All premised on getting machine 1 to work