I'll be lead-off hitter as regards today's SEC filing relating to events of May 23. John M. Fife owns JFV Holdings which owns Red Cliffs which owns Typenex which owns just under 10% of VHUB shares, as 10% has been the contractual limit to Typenex's ownership stake in VHUB. Meanwhile, there's more Typenex debt due in about a week, if I am remembering correctly, so we'll have to go back to other SEC filings to figure out what happens when debt falls due, there isn't (for all we know right now) cash to pay up, and Typenex is at its limit in regard to owning VHUB shares.
Meanwhile, VHUB has a credit facility with TCA Global, and there's lots of room within that facility to borrow money to pay off Typenex, but there's a caveat...TCA can just say no.
So, there are various ways that this can all shake out, and I'll list them from worst to best for the company:
1. The plug could be pulled on the company, and proper homage would be paid to Cerp.
2. Typenex and VHUB renegotiate, and Typenex winds up holding lots more of VHUB, as the 10% limit would be rescinded. The conversion price would be in the sub-pennies, and this would be a textbook case of dilution (and proper homage would again be paid to Cerp).
3. VHUB refinances its Typenex debt coming due through TCA, which would kick the can down the field.
4. At long last the search for equity financing, first mentioned around thirteen months ago, could bear fruit. But, given that the current market value of the approx. 81 million shares outstanding is only around $650,000 and the capital need would be in excess of that to comply with the new FDA regulations, this too would dilute the positions of current shareholders.
Good news on the sales/earnings front, which would help right around now, can't reasonably be expected until mid-October, as we're now in the company's fourth fiscal quarter. The annual reporting has come about ten weeks after year-end as contrasted to six weeks during the first three fiscal quarters.
Overall, I'd be really pessimistic, except for the fact that Typenex and Gotama own a lot of stock in VHUB, and their cost bases are a lot higher than what the stock is going for these days. So there would seem to be an incentive to get the company straightened out rather than dissolved. If I were more cynical, I'd write that there's an incentive to "pump and dump," but the company has its code of ethics and, beyond that, I just don't think that an investing public could be faked into believing the pump, given all the publicity swirling around the FDA's new regulations.
My guess? I think that this company is going to be sold into the hands of deeper pockets which can afford the FDA compliance measures. If I were Typenex, that's what I'd be pushing for.
I guess this is a good time to repeat what I've mentioned occasionally during my presence here. I've never been a shareholder in VHUB, nor do I intend to be a shareholder in anything during my retirement. I first started following the stock when it was being pumped in Spring 2014; the e-mails I was getting were sufficiently annoying that I just wanted to track how long it would take for VHUB to crash and burn. Ultimately, I reached a conclusion (which doesn't necessarily mean that I'm right) that the owners of the shell into which VHUB inserted itself were doing the P&D and that the family-ownership is more victim than perp (they didn't sell during the P&D, and the stock dropped from a $1.87 intraday high to subpennies during the last six or seven months of 2014).
I wish the Winthers well, and I wish the crew on this board well. IF the company can hold on until the election, then look for the FDA's grip on the vaping industry to loosen IF Trump should win, and look for the stock to recover substantially. All the "if's" seem to be long-shots at the moment, and that's why the stock is sitting where it is sitting.
