Energy One Corp (EGOC)

[jamigo]

Hello Mr. Brown. It's nice to see you post and, IMHO, if you really want to move this stock you'll have to inform potential new investors by some means other than Facebook. Just sayin'...

Perhaps you could clarify your “clarification” of "toxic." My remarks are keyed to your quoted comments with my emphasis on potentially confusing statements..

Using my 1 post: Just in case there were any questions on the subject, I hope that the relationship with TCA and our acquisition of Master Lease is now clear with respect to any "toxic" questions. 

I missed a bunch of posts but the questions are probably about the toxicity of the financing, not the acquisition.

As per the release: “This was an all-cash purchase of 100% of the equity interest in Master Lease. No shares were issued, nor will be issued in association with this deal,“ said Raymond T. Brown, Chairman of E1. “Just so there is no confusion by the market or our shareholders, there are no stock or option conversion features as part of the deal, nor any associated with our credit facility. It was a pure cash deal for a great addition to the E1 business model”

Your source of the cash is questionable or should be to shareholders. Googling “TCA Global” led me to “toxic”, “death spiral,” and some interesting 8-Ks. None of the results were very encouraging. It seems that TCA is the offshore short term lender of last resort for some really sad companies (see 1st link). I'm guessing that the credit agreement (2nd link) is pretty much what you agreed to. If not, why not post EGOC's agreement in the interest of transparency. Shareholders need to read that and know for sure that it isn't toxic financing.

http://www.trafcap.com/Press-Releases/

http://www.faqs.org/sec-filings/120614/SPEEDEMISSIONS-INC_8-K/ex99_1.htm#b

It also looks like TCA now owns EGOC instead of the shareholders in the event that you can't repay on schedule. I don't know how you plan on repaying TCA when your only source of revenue will be from Master Lease and they're not doing that hot according to you (“$300,000 in revenue and will realize 20% EBITA “ for a quarter...). If you're borrowing/repaying the $600K over 6 months, how could you possibly do it?

You'll have no choice but to repay with stock and that seems to trigger the death spiral. Your statement that there is “no stock or option conversion features as part of the deal” might apply to the acquisition at this moment but not to the line of credit in the future. Help us out here and show us how the financing isn't toxic. Your shareholders should certainly have a right to see what you committed them to in the credit agreement.

Oh, and about that “business model”... If the model was to retrofit old trucks and lease them out how do you plan on doing that when EGOC has no approved products? That window of opportunity is slamming shut and none of your devices are approved. The last deadline is 14 months away and you face stiff competition from established companies with approved products.