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Re: RPH9878 post# 1645

Thursday, 01/08/2015 10:05:32 AM

Thursday, January 08, 2015 10:05:32 AM

Post# of 8579
If you're asking whether, presuming I were holding the stock (though I'm actually not), whether the company's press release regarding new products would make me more or less bullish on the company, I would say that it's a mixed bag. I'll grant you that the company has a great product line and is a leader in its industry.

But the under-capitalization of the company is a major downer. I haven't added up all the debt, but if you were to take the loans from Gotama, the 1.6 million loan recently negotiated, loans from officers of the company, and the bank loan from yesterday (though it's not long term debt), the debt/equity ratio would be through the roof (basically there is no equity yet).

As a total outsider here and having no emotional involvement, my belief is that the most likely future of this company is that it will run out of money and run out of lenders to lend them more money - which will lead them to offer themselves up to the major long-term competitive force in this industry, which is the various cigarette companies that have dipped their toes into vaping. So, bottom line - I think you may very well make some serious money here, but I would believe that the pot of gold at the end of your rainbow will be the sale of the company.

All of my commentary must be given and be taken with a few grains of salt. Before I retired, I was CFO of a major academic medical center, so I can claim no expertise in the for-profit arena and especially in the realm of true entrepreneurship, like the Winther family is demonstrating (though I'd feel better about the company's prospects if it were managed by professional managers rather than as a mom and son operation).

Again, I wish you well here.