From 3 Months Ago ... A little Perspective -
Eco-tek worldwide ceo speaks about the company's future plans
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Published: Apr 28, 2014
TORONTO, ONTARIO--(Marketwired - Apr 28, 2014) - (ETEK) I came to join Eco-Tek in June of 2013 and immediately recognized that it was a great little Company with truly fantastic products but, with the passing of its founder more than a year earlier, it had lost its direction. Even best lubricant in the world and the best oil cleaning system won't sell themselves. Job one was to get more customers. A new team of seasoned professionals joined the Company, most them on performance based renumeration, and they had kicked up our sales. We have been achieving a 50% growth in sales per quarter and we are convinced that we can sustain this kind of growth in revenue for the foreseeable future. Next we had to increase our margins. Working with our suppliers and using smart cost controls we have brought our margins from low 30s to high 40s. Our distribution partners in North America were focused on smaller customers and our international success with larger customers in the mining, construction and transport sectors showed us that we should change up our distribution in North America. In April we started that process with North Dakota and we will add about 10 more distribution partners in North America over the next year. Overall Eco-Tek expects to have revenue of $2.2 million to $2.8 million in 2014. Before I joined the Company, it became a public Company by way of an RTO. The group that arranged this fairly expensive process funded the Company by Convertible Promissory Notes and Promissory Notes. The Company borrowed about $900,000 over the course of last year to pay for its costs associated with filing, legal, accounting and audit work with regards to being a public Company. This group ceased to provide funds in August of 2013 and Eco-Tek has gone to the financial markets to obtain financing since that time. A large portion of the outstanding debt from the period up to August 2013 could have been converted into huge numbers of shares and the Company has taken steps to minimize the impact of this issue by changing out the notes that could have converted for many hundreds of millions of shares for ones that convert for only millions of shares. These conversions have occurred between December 2013 and March 2014 with little or no impact on our shares. The Company has also made arrangements with other note holders to convert their notes into preferred shares that will not impact the common share dilution. The Company also has about $475,000 in debt to the original founding shareholders and they have also agreed to convert to preferred shares. This action plan will take about three more months to complete and it has has two major benefits. One: it significantly reduces the potential dilution. While the total conversion number would vary with share market price, we believe that the overall impact of our action plan will have reduced dilution by about 1.3 billion shares. Two: it almost eliminates the Company debt, new debt excluded. We expect the fully diluted share number to be between 650 million and 750 million plus new shares attributable to stock options. I and many of our senior staff are taking the major portion of our pay as stock options. This action has two large benefits for the Company. First it conserves cash, which is always a valuable commodity for a growing Company, and second its aligns the interests of our team with our shareholders. I like to have everybody in the canoe paddling with the Company. The Company plans two more action items with regards to our share structure. First, in the next short while, we will file for a change in the Authorized Shares from 7 billion to 1 billion, and second, once we have completed the conversions and debt elimination as outlined above, we will commence a buyback program to reduce the total outstanding issued shares by about 250 million. We expect this program to take about a year. Eco-Tek is a great little Company about to get much bigger. We were six hard working people in June of 2013 and we are now a strong team of twenty-seven that grows every month. We will still have our ups and downs but we are inspired by our recent successes and excited by our prospects. We expect to have bright future, make good money and have some fun. We invite you come along and help us on our journey.
