Blue Line Protection Group Inc (BLPG)

[MikeyInTheD]

I like the recent news and direction the company is taking in providing security and banking for the underserved marijuana sector. The larger players don’t want to tarnish their names or reputations dealing with a borderline legal industry. These leaves smaller players like Blue Line to pickup some much needed revenue. They seem to have some financing in place but in reading the 10-K I find myself really doubting the ability of the company to continue operating long-term. Nearly all of their debt is due in 2018-19 and already financed at 10-19% interest rates. I don’t know how the company will find attractive rates to refinance these loans without massive shareholder dilution through offerings and options. Management needs to publicly address the debt situation of the company and how they will raise funds to complete the business expansion planned. They have some great ideas and I would like to see them developed because they could generate significant revenues for the company. Cash flows by 2020 could be sufficient enough to sustain the company without the need for further financing. We need to fill the two year gap until that occurs and this will be the most pressing issue facing management.

I am still on the sidelines on this one. Wanting to buy on the plans as they been laid out to shareholders. However, the debt situation of the company makes me cautious. I think the company could face potentially 80% downside from the current levels before leveling off. I may wait for a better entry point around .0125