Electronic Cigarettes International Group Ltd fka ECIGQ

[jprise]

Dilution didn't really start until Dec 1st @ (.50). What we have been seeing since then in my opinion is the remainder of the January and February placements. Roughly 6 million dollars. I would say they are close to done with these. I should clarify these notes totaled almost 27 mill, they have prepaid most of it up to this point.

January Private Placements
$ 3,354,022 $ -

February Private Placements
2,586,206

An interesting note on this debt:

Certain Covenants

The Company has agreed, subject to certain limited exceptions, not to, and to cause each of VCIG LLC, Must Have Limited, FIN Branding Group, LLC and Hardwire Acquisition Company (collectively, the “Subsidiaries”) not to, (i) pay any dividend on or repurchase any of its capital stock or rights to purchase capital stock or repay or purchase any subordinated debt, (ii) repay any principal under any indebtedness (other than the 12% Convertible Notes at any time on or after November 17, 2014) other than with net proceeds from the sale of equity securities of the Company or (iii) pledge any of its assets. The Company also agreed, subject to certain limited exceptions, (i) not to cause or permit any of the Subsidiaries to incur any debt or guarantee any indebtedness or to transfer any of its assets or issue or sell any equity interests and (ii) not to take any action, or fail to take any action, that could materially diminish the business of any of the Subsidiaries or divert the business of any of the Subsidiaries to any other person. The Company has also agreed to cause its subsidiary VIP to maintain a minimum EBITDA of $900,000 each month.




Note on cash flows

Cash Flows


Comparison for the nine months ended September 30, 2014 and 2013



Operating activities for the nine months ended September 30, 2014 required cash of $28,250,000 compared to $1,025,000 for the nine months ended September 30, 2013, an increase of $27,225,000. This increase was primarily due to the quarter's operating loss.


Our cash flows provided by financing activities were $58,312,000 and $2,509,000 for the nine months ended September 30, 2014 and 2013, respectively, an increase of $55,803,000 primarily due to the proceeds from the issuance of debt.

Our cash flows used through investing activities were $26,570,000 and $8,000 for the nine months ended September 30, 2014 and 2013, respectively, an increase of $26,562,000 primarily due to acquisitions made during 2014.