Sorry Snow, I shouldn't have used cents after the $.004, but if that were the earnings per share, at a P/E of 10 we'd be at $.04, at a P/E of 30 we'd be $.12. I didn't hear Gary say earnings of $.004 cents a share, I believe someone calculated that based on the O/S, and may have been somewhat high, based on the O/S. Regardless, I believe Gary was being very conservative in his estimates, and that we'll overperform, especially once the U.K. figures come in.
Even if we're installing equipment in some of the largest hospitals in the world, those needing 3, 4, even 5 units, if we're building 25 units a month, we're not installing nearly what we're producing. I've got to believe that many of the others are going to the U.K.
I certainly don't know, but I would suspect that if I were shipping virtually hundreds of units, I'd do so by filling freight containers, and putting them aboard a ship headed to the U.K. I would suspect that one freight container could hold perhaps 100 or more units. If this is the case, they'll be manufacturing for months before the first container is shipped. To me, this makes far more sense than air freighting each unit as it's built, unless the U.K. is paying a premium to have them shipped in that manner.
I really liked what Gary said about expansion, partially paid for from what they're earning, part on loans they're negotiating, and yes, some dilution when the stock's at higher prices. I believe he knows that the news that will be coming will generate those higher prices, but he also knows the SEC frowns on hype, so he'll deliver the news rather than give us flowery estimates that fail to come to pass.
It's very hard to say just what Gary meant with the $4 million statement. It's certainly enough to justify a higher share price, but if he meant that at the end of they year all debt would be paid off, and we'd have $4 million in the bank it would represent substantially more. While I doubt we'll be debt free by the end of the year, especially if he's taking on additional debt, anything is possible as earnings grow dramatically on delivery of a lot of equipment to the U.K. If in fact the company is going to fill shipping containers and sending say 100 units per container, the payoff should be substantial, though I'm not certain if we get paid when they arrive in the U.K., or not until they're installed in U.K. based facilities.
Perhaps a month or more ago I questioned if they were going to be building the units in the U.K., that question was answered, they're not, so virtually hundreds, perhaps over 1000 units will be needed to just fulfill the U.K. needs. I would suspect that any lenders Gary is speaking with have access to the orders from the U.K. that the company is working to fill. The banks would know if the company purely received the order, or if they got some payment up front or not, they'd also know if the U.K. intends to purchase, or lease all these units. If they're purchasing, it will bring in a great deal initially, but only sustained by selling into other parts of Europe not covered by the U.K. contract. If leased, not as much up front, but very sustained payments.
While I still believe this company will be a cash cow, it will take time to recognize that. Even with 2 to 3 hospitals per month here in the U.S. that Gary said we'd be adding, without knowing how many units per hospital, it's very possible that by the end of the year somewhere between 35 and 50 U.S. hospitals may have our units, and that may represent something between 60 and 100 leased units here in the U.S. as I gather leases are being used in hospitals in the U.S.
What I didn't hear in Gary's presentation was predictions of growth, like the 40% per month he previously stated would occur beginning in July, I don't think he really thought out that figure when he gave it, 40% growth in a year is great for most companies, month over month is nearly impossible to achieve.
We need to realize what we're paid for, and what we're not. If we sell 10,000 gallons of fluid in bulk to ACE, we get paid for it. If ACE bottles it and sells 10,000 one gallon bottles to someone else, they get paid, we get nothing more. If that middleman sells those 10,000 gallons to Costco, CVS, etc, they get paid, ACE doesn't, we don't, we were previously paid for the fluid, which now is on the shelves at Costco, CVS, etc, which we can be happy about, but when we buy a bottle, no money goes back to the company, they were already paid.
It would be a totally different picture if we were selling directly to Costco, CVS, etc, but that's not the case, at least not yet, and I doubt if it will be as we'd be competing with our distributors. I believe that DE intends to go after a great deal of retail business. What I don't know is if he can sell to say Costco, for nationwide distribution, or if he's geographically limited. The company would be paid regardless, I just don't know how free each distributor, so of which make their own product, are in terms of the area they may sell and service in.
I believe that where we are today, perhaps 1% of the general population has heard of HOCL, I believe in perhaps 3 years over 50% of the population will have at least heard about it, and perhaps 20% will be routinely using it around their homes and/or workplaces. It may not sound like it, but that would be tremendous growth.
Gary
AI
