Hostastock, thanks for asking. What I'm saying is that if anyone goes into business, s/he first invests his/her own money and then "leverages" that money through borrowing (debt). ...sort of like buying one's home: you put up 20% and in consideration that you have "skin in the game," the lender is willing to put in four dollars for every one dollar you put in.
VHUB is an interesting situation in that the last balance sheet I saw shows no stockholders' equity after absorbing initial losses, which means that the company is being financed basically completely via debt.
Now don't take that as a slam against the company, because it happens that some of that debt is owed to the founders, and more of the remaining debt is being secured by the personal assets of the founders. So indeed the Winther family does have "skin in the game." They're not going to default on company debt, if they possibly can avoid default, because the lenders can go after them.
Since this vaping industry is such a new industry, I wouldn't have available what a "normal" debt to equity ratio might be, but I do know that being so tilted in the direction of debt does raise a few eyebrows and a few questions. But again, those questions can be readily answered if truly sales and the actual collections from those sales are growing so fast that the company would be able to not only pay the operating expenses but also slice down the pile of debt pretty quickly. That's precisely what you as a bull on the stock are betting on.
I hope that I haven't written too technically for you on the one hand, and I hope that I haven't talked down to you on the other hand. ...and I'm sure that there are a bunch of other posters on this board who might have explained this better than I have. I wish you well!
