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Wow, just thought I would check in here after being away for awhile. Remember me? I warned you about this EXACT thing happening 18 months ago and you decided to insult me and send me profane threatening private messages.
Turns out I was right and you were wrong. I never cheer for someone to lose money, but hopefully you've learned your lesson about listening to people who clearly know much more about this stuff than you do.
This is not EXCC, this is a different company called Excel Force. EXCC has told us they will no longer be reporting publicly. Also, who would think they could post a $1.5mm profit?
You have absolutely no idea how this works. EXCC doesn't get to choose if they are in default or not. They cannot refuse to pay additional interest. The lender is not "making assumptions". It is very simple, they are in default of their loan agreement, the lender has refused to lend them additional money, and has moved to recoup their money through the sale of the business.
A buyout would not be a "jackpot" for shareholders, it means a liquidation of assets to the highest bidder for pennies on the dollar so the lender can recoup their money. Look at the capital structure of the Company. They have tangible assets of ~$8mm, they owe the bank ~$13mm. It doesn't take a math wiz to figure out that the shareholders would be left with NOTHING. Even if you look at straight book value of the equity, it is -$1.8mm and dropped $1.5mm since 12/31/16.
The bank is calling the shots here. That's what happens when a company is in default, they don't have a choice in what happens. The bank takes over and tries to recover their money.
They hired a new CEO months ago, things have deteriorated further. The bank doesn't want to put more money in. No way to improve things without buying more portfolios. Bank is selling off assets to get repaid on the loan. It has nothing to do with the CEO. Company is DONE.
It's almost as if, gee I dunno, the Company is insolvent and is getting liquidated by the their lender...
Exactly, nobody will value a company that loses money every quarter at 3x revenue. Company valuation is typically done on a multiple of EBITDA, not revenue.
This Company does not make money, has declining revenue, and is in default of their bank loan. The only way they can make more money is to buy more portfolios, which requires money, which the bank won't lend to them.
There is no way this stock will get to $0.34, it wont even get to $0.05. It's overvalued at $0.01
They could be in default for a number of things, not just missing a payment. Probably because the financial performance has been so bad, they have missed covenants. The bank will act to liquidate the assets so they can be repaid. Whatever is left will go to the shareholders in bankruptcy if anything is left.
They released an 8k saying they were still in default and the bank was forbearing. The bank is in the business to make money, you are right. Unfortunately they won't make money on EXCC because the Company can't pay its loans back. So the bank will liquidate the company and sell the assets to pay the loan back. Bankruptcy is right around the corner. You can call me a "dumbnut" if it makes you feel better, but the facts are right there.
So you're not concerned that the Company is going to be liquidated to payoff the loan that they've been in default on since last year? You're still buying stock? Interesting strategy.
The good news is that Mr. Hyde doesn't work there anymore.
You are aware the Mr. Hyde is no longer with the company? Turns out he was a genius at making himself rich, the stockholders? Not so much.
Yes, all businesses do start out with $0 in revenue.
HOW ABOUT...CAN YOU EXPLAINING TO US HOW THEY MANAGE TO EARN OVER 18 MILLION IN REVENUE?
Certainly, glad you asked. They obtained a bank loan and purchased portfolios of merchants who all utilized credit card processing services. These merchants pay a fee to the processors so they can accept credit cards at their businesses. EXCC gets a portion of this fee in exchange for providing customer service and handling various aspects of the transaction.
Without a loan from the bank, the company would never be able to obtain these portfolios.
THIS COMPANY HAS A SOLID BUSINESS THEY HAVE SOLID MERCHANTS ACCOUNTS. THESE MERCHANTS ACCOUNTS VALUE IN GOLD.
Well, they have merchant accounts, yes. However, merchants go out of business all the time. Not all at once, of course, but business fail in the US each month. So, it stands to reason that some of their merchant customers will go out of business and no longer be processing revenue through their card machines. In this case, the company needs to replace these merchants, either by recruiting new ones or buying new portfolios.
Merchants go out of business every day, its just the way it is. If you have a huge portfolio of merchants, some will go out of business. The company has to constantly add to their portfolio or else revenue will decline. Since they have no way to do that (bank line is frozen and they can't buy new portfolios) their revenues will continue to shrink.
With 98mm shares outstanding, your belief of a $0.50 share price would mean the Company has a market cap of $49mm when it sits today at $5.1mm. So what makes you think the valuation will jump almost 10x with no new assets coming into the company?
How are you calculating the valuation? The Company has a negative book value and the cash generating assets (the portfolios) are decaying every day (as merchants go out of business). I think $6mm market cap is generous considering the bank loan that would need to be paid off in a liquidation. I think the bank would be lucky to get repaid at this point.
Selling at $0.07 is still better than selling at $0.00, which is where this thing is going
Yep, Company is in default of their bank loan, revenue, EBITDA, and net income is down, portfolio is dwindling, fraud losses are up, they have no means to acquire new companies. Gonna be a GREAT year!!
So they are saying the losses last quarter were from discontinued operations, otherwise Q1 16 was profitable. Q1 17 was not, you have to compare apples to apples. This quarter was much worse than last years Q1
10-Q is published
That post is full of incorrect information just FYI
That is not how commercial loans work. It is a legally binding contract that says they MUST pay default interest.
They did not choose to be in default, that would be extremely poor decision making and yet another reason not to invest in this company.
They noted in the 10-K, which was released in April, that they were in default. They are still in default now.
If you refuse to pay your mortgage, the bank will take your house. You signed a legal contract. This isn't a game, this is very real
But honestly, name one company, a quick google search shows a few that went bankrupt
What companies have they increased 500 times over?
Good to see you are back, care to respond to my previous post?
200% revenue growth rate? What year did they show 200% growth?
From FY14 to FY15 the growth rate for revenue was 84%, impressive, but it was due to the acquisition they made during that year.
From FY15 to FY16 the revenue fell 3% once you remove the discontinued operations. If you include the discontinued operations they show heavy losses in FY16, and even still, revenues did not grow 200%.
When the 10-Q gets released, it will be a nice dose of reality for you
So from your due diligence, what makes you think the stock will appreciate in value?
Interesting insight, what makes you say that?
This is a sinking ship, smart money is in the shorts. Once they report Q1 numbers I have a feeling that the stock price goes to $0.05 or lower.
Great day for the shorts!
This is not correct. Covenant breaches do occur all the time, yes. However, it is a default of the loan agreement and the bank can call the loan. It has the same ramifications as if they missed a payment. Typically a bank will not call the loan if the covenant breach is simple, however, if they are worried that the cash flow of the business cannot support the debt going forward, they may exercise their rights and seize the assets of the business.
Stock looks ripe for short selling
I would guess closer to $4mm as there is no reason they would grow without adding merchants or acquisitions.
Exactly, the company has told investors they are not in compliance and cannot access their bank line. Why on earth would you not believe them?
Yes, there are plenty of portfolios to be acquired, however the company does not have the funds to do acquisitions. The bank loan is frozen.
This press release is from November, the 10-K has more recent information.
This is a public forum where people can express ideas they have about stocks they invest in. I have not said anything that is not true about this company. I am comparing notes on my research I have done with this company. If anything these are issues that those have have a financial stake in the Company should be aware of. My goal is not to affect the share price, and I don't believe that this forum has enough shareholders represented here to make an impact anyway.
This is supposed to be a place for discussion and sharing of ideas. If everyone just posts how great the stock is, then what is the point?
Estimated by who?
Yeah, and they talked about the bank loan in that presentation as well. If they can't acquire, how fast do you think cash flow deteriorates? They need at least $2mm for interest and management is highly paid as well. Cash flow could be a concern towards the end of the year.
Agree, however it seems that nobody takes the time to read it.
Care to elaborate? How do you anticipate they will be able to grow without outside financing? What are your expectations if the bank loan gets called?
Thank you