Hey Bernard, how was your weekend? Fine I hope. Sure, I'll take a shot at your questions.
Growth - It seems as though VHUB's growth story as to this point in time is not linear quarter over quarter. Instead we see a few quarters that pretty much looked stalled as far as growth and then a breakout that propels them to the next level. The last 3 quarters were 1.2 then 1.1 followed by 1.1 now a projection of 2.4 for this current quarter. That seems to me that some new factors allowed for that. Vape shows they have been attending and possibly they hit on a distribution deal or something. They are apparently selling product in the UK now. I do believe they will be correct with their projection. When they gave it the quarter was almost 2/3rds completed so it was far enough along for them to extrapolate. Also they have to be very confident they will hit on that projection. If they don't they will likely get hammered. They would have to be very unwise to give that projection if they had any doubts of hiting that target. In the next fiscal year as you said they project 10 million in revs. As you say that would be in line with this current quarter moving forward extrapolated out. In the future they may come out with new products. They may ink new deals, growth of certain products could really take off or might even fizzle. There are things and events that will happen in the future that at this point in time would be irresponsible to project. They should be conservative and project based on only what they know right now. I strongly believe for instance they did not know back in January that this current quarter would be a breakout quarter for revenue. It is best to keep projections based on the here and now and as events take shape and factors change to then adjust projections.
Loan payments - It really seems as though they turned a corner in this current quarter. Many wondered how they might be able to make cash payments unless their revenues started to increase. The company basically stated that revenues have doubled this current quarter. With the new factor that revenues will be 2.4 million vs 1.1 or 1.2 million it then becomes evident that in fact revs did increase and probably just in time. With this new factor it then becomes plausible how they then can continue with cash payments. As I read the financial report I read over page 14 and 15 closely. I see that the last time they appeared to have taken out a tranche from Typenex was on January 16th. Unless I am missing something it doesn't seem to me that they have taken out any more tranches, so it doesn't seem they are taking out more tranches just to pay off the last. Also I read some clause in there where it even seems that they are prohibited from even doing such a thing. What I honestly think is that just in time they turned a corner and can and will be able to legitimately make loan payments with cash due to the doubling of revenues starting this current quarter.
Events will continue to unfold as time marches forward. It now appears they are selling in the UK for instance. This is not only a new company but basically a new sector as well. I don't think for awhile anyway we see straight linear revenue growth but instead see some stalling out for some quarters but at times some breakout quarters that brings revenue to the next level as is what seems like happened in this current quarter. You like baseball? You ever see a team play .500 (win percentage) ball for a long while and then all the sudden win 10 games straight. Then play .500 again for awhile and then win 8 games straight. Once it is said and done though and the season ends the ballclub has a good record do to the average play for much of the year but combined with stellar play for a few times during the season. VHUB's growth seems to be happening like that.
