Here is where your math is not adding up. HPNN is not selling the product. USACIGS is selling the product. USACIGS is getting the product from electronic Cigarettes, INC. (You can check there websites if you want to verify. If you really want to have some fun put both sites up at once and see just how many pages USACIG just stole outright from electronic Cigarettes, INC.)
Out of the below $7.00 retail price they are hoping for they have to purchase the product from Electronic Cigarettes, Inc. and the person selling the product in the store front is not going to touch the product if they can not at least make 40% which is $2.80 per unit sold. That leaves $4.80 as a purchase base for the retailer. So for every unit sold, I say sold because products like this are always done on a consignment basis, the retailer pays USACIGS $4.80. USACIGS is not getting the product on consignment so they are having to front $4.08 for each unit they bring into inventory leaving them $0.72 cents Gross Profit for each unit sold. You have to take shipping, advertising, office and admin overhead, and labor out of that $0.72 cents profit for each unit which on average is going to run 70% of Gross based on a company that is run right leaving $0.21 cents Net profit per unit. OUT OF THAT $0.21 cents HPNN is going to get a cut.
Taking standard accouting and business priciples into account for USACIGS to even make $100,000.00 in profit in a calander year they would have to sell 476190 units. Since they are selling on consignment to the retailers they would need to keep at a min 25% inventory overage to handle restockings etc meaning they would have to keep 119047 unit on hand at all times. Based on there purchase price from the manufacture of $4.80 they would have a carrying cost of $571,425.60.
USACIG, even with the help of Peter dumping shares like crazy, can not run the company the way it needs to be run to even make $100,000 a year before they divided it up between the two of them. The credit market is horrid right now. Neither of these two gentlemen have a chance with a bank or a VC. One is not established (USACIGS is not a registered Corporation or even and LLC. It is a sole propritorship that started in late Feb 09) and the other is not reputable or credit worthy (please see all collections, leins, lawsuits, and back child support orders that are currently public record).
USACIGs could start out small as a one man operation in the local area and build it up to where he could make a very nice living at it over time but they do not have the capital, the know how, and with Peter in the mix the reputation to pull off a campaign blitz and be able to sustain it.
It just is not going to happan.
