Livewire Ergogenics Inc (LVVV)

[Det_Robert_Thorne]

Marketing costs money, even small ad buys

Even if it only costs a few thousands to run late night ads in large markets, LVVV doesn't have the cash to do so, and in order to raise it, they have to issue lots of shares at very low prices.

In order to raise $50K cash at the current stock price of $0.008, the company would have to issue convertible notes that would convert at something like $0.006, and would likely be price protected at 85% of the prior week's average price on the conversion date. At a conversion price of $0.006, that would mean over 8.3M shares added to the float.

The shares would be unrestricted, and so could be immediately sold, further depressing the stock price.

The next $50K borrowed might then cost 10M - 12M shares.

The time for these small ad buys would have been a couple of years ago, when LVVV's share price was higher and the float was lower.

This year, LVVV signed the deal to create HempWire with Medical Marijuana, Inc specifically so that they could then sell CBD-inclusive chews to the multi-level marketing company, KannaWay, which would mean a fairly large initial buy as the KannaWay members bought their initial stock to qualify to be in a downline. (This meant no marketing costs for LVVV, BTW). Unfortunately, the surge quickly ended, because chews that contain CBD sell for several dollars apiece.

That's why there was a big drop-off in 3Q from 2Q.

BTW, my guess is that the deferred revenue on the LVVV balance sheet is payment received from KannaWay for the initial order, but not shipped yet. Not sure how that will roll off the balance sheet as revenue, since the start-up interest in KannaWay has flagged over the past months.