and why isnt the buying commensurate with that enthusiasm? price is in the $0.03s now and now sign of slowing down. are the pumpers here not willing to put their money where there mouths/publicly stated beliefs are? dont have enough cash on hand to stem the tide from the Jifu shareholders cashing in?
what about those illusive watch sales? launch was 12/1/13 and there still has been NO update on what is going on. sound familiar? similar to the pump back in 2012 with the Mach5 accelerator? i know several on here have been active, rational investors and hope they do not get burned too badly and have a chance to recoup some of the losses on future runs.
as more shares flood the market, it will be tougher and tougher to sell higher into runs as they wont run as far and they will fall faster. just normal market mechanics.
remember - all the revenues reported were from Jifu side and the company has not provided past accounting of Jifu acquisition so XCLL shareholders dont know if those revenues are actively growing or declining and they have no real idea of where those revenues are really comprised.
the only upside for current shareholders/dedicated longs is the possibility of the company witholding material information until Jifu selling is absorbed (companies dont want to release positive news into a flood of selling). however, that is a very fine line withholding potentially material information.
in the meantime - no real reason to buy until the sellers are or near being exhausted.
do you happen to have any proof (able to be shared) about Wright's dealings internally with MLOG and the reverse merger? do you have a group that is considering legal action and/or has separately petitioned the SEC? i have done so individually on separate occasions but without numerous complaints on the same company/individuals - i dont really know how serious those complaints are taken or if given any priority. the stats on the SEC website is somewhat staggering and provides little hope that an individual complaint will ever move into something researched let alone actionable.
the $0.47 was the "fully absorbed cost" for the energy shot as laid out in the 2013 10K that was filed 4/15/14. it is not expected per the recent 8K to be just under $0.40. it wasnt clear whether this was due to better pricing/sourcing or strictly economies of scale with production increases. either way - it bodes very well for future earnings. that is a massive decrease in costs on a percentage basis and is immediately scalable which is key in evaluating/putting a valuation on stock value (based on trailing earnings, forward looking earnings, etc).
if they are paying off the previous toxic loans with the more favorable, current loans - it will drastically minimize/avoid dilution which will greatly benefit those valuation models as well. mgmt/insiders have a highly vested interest in keeping dilution down as they are the largest shareholders and are paid minimally from a compensation standpoint. their compensation is heavily tied to specific performance measures outlined in the filings and are directly related to product sales. that is a positive sign for shareholders.
i posted the numbers in a previous post with some rough calculations on future, PV
HJOE recovery shot is caffeinated and has as advertised something to the effect of "the equivalent to about a cup of coffee". the energy shot has no caffeine.
keep in mind with regards to their alignment - a lot of salary/compensation has been deferred by mgmt/founders with no interest being accrued. it is laid out in the filings. shell companies that exist for the enrichment of a few willpay themselves ridiculous salaries, "defer" salary at very high interest rates. they then finance with toxic terms, pay themselves back with high interest, and/or convert the deferred salary into immediately vested shares (depending on how they structure the agreement). unsophisticated shareholders will assume with their large share position that they are vested because of the number of shares they own and looking for the long term payoff. they ignore the bloated salaries and company loans at 20-25% where they are basically providing a steady stream of cash to themselves while the company systematically fails.
there has been none of that here. or atleast nothing that i can see/uncover. i formerly assumed they made some bad financial decisions on capital that put them in a bad spot in 2013. however, after going into the court filings on the 3rd party lawsuit - it appears they derailed the company's plans. with their expected cash flow from revenues - the issues from the financing would have never materialized. if that is correct, and having now a CEO who understands the capital waters - spreading the risk and doing short term deals that can be unwound helps mitigate risk if they are off on their own assumptions with future cash flow.
while it isnt the best scenario - i certainly prefer it over dilution. if the company is on the path to make $2-4MM on a forward 12 months - $125K is a small percentage of the cash flow and should be easily absorbed.
this is my assumption and based on Veal's past - it seems to make sense. he seems to have good history in bringing in money and minimizing dilution. the process works and makes sense IF cash flow assumptions are accurate.
i think this is where they got in the bind in 2013. they had all their eggs in one basket financially and when it went sideways with the failed production runs/product - everything went sideways and they did not have the experience to right the ship quickly enough. we know sales were legit in 2012. if one assumes they were ramping up in 2013 and were going to do 3-4 times that amount - then the cash flow would have easily been inplace to pay off the old financier (the other lawsuit).
that is my take and assumptions. that is what i am basing future investment and risk/reward off of.
the remaining money should be going towards production, and SG&A with respect to marketing and getting distribution agreements
my guess is this financing is a cyclical process to pay off past financing. that is the way i would do it. you raise money from the "best" lender and pay off existing, toxic short term financing before it becomes toxic/dilutive. you keep doing this until your cash flow is sufficient to get net terms and/or capital on interest terms. you then pay off the last short term finance debt arrangement. think about it as continuing to transfer balances from one low interest credit card to another. you are paying transfer fees each time and taking some hits but it is a small premium relative to paying it all off at once and/or paying much higher interest rates.
it is a win/win for the lender/borrower to a large degree. the lender gets a massive premium and a quick return on the original loan and immediately removes risk off of their balance sheet. unless they are strictly looking to tank the stock by diluting the hell out of it and shorting it into oblivion like some financiers do - this is a risk/reward lending scenario to them. if they get paid back 25-50% in six months on $50K - that is good money and no future risk.
for the company - while the premiums are steep - they are looking at it strictly short term and are OK as long as the industry doesnt change the rules mid stream. they have cash flow expectations/assumptions based on pre orders/sales. they know their fixed costs and probably have a good idea on variable. they cant predict the unknown unknowns (like a negative verdict in a lawsuit) but assuming they have reasonable expectations on the cash flow and pay back terms - they can do this until they are self sustaining.
in the end - they may pay $50-125K for this premium throughout the year. since they are the majority shareholders - that is preferable over diluting their ownership by 25-50% of the company through toxic lending. it also protects their personal capital if everything goes sideways
thanks. if he burned Sackler as well - why is Sackler back in bed with him under NUTT or was Sackler in on the play to begin with?
was this before or after the reverse merger of MLOG to NUTT? i have no personal dealings with any of them other than trying to get information that should have been public.
which shell are you referring to? while MLOG was trading as a shell - the company was bringing in income/revenues from the IP settlements. i cant prove that other than common sense/logical progression that they kept suing entities in the same courts using the prior cases as foundation and then new plaintiffs would settle. you dont keep suing people under the same principle if you keep losing.
i believe they were making considerable money on these IP suits and when several investors started piecing it together and trying to get material information disclosed, they created this reverse merger to hide the MLOG numbers under the guise of a private company and sell it as a "good deal" for teh shareholders since they retained MLOG private shares plus owned x% of the new NUTT
what is left to liquidate? they sold their Ford truck. they have no assets other than the one machine in R&D phase and around $100K claimed as IP. that is roughly $250K to spread out over 2BB shares. since the common shareholder is last in line behind secured debt holders - that is a moot point. regardless - the "street" value of the remaining FRU is whatever someone can part it out for and sell for parts (motors and pumps will have residual value) and scraps. the IP will be near worthless in liquidation unless some parties bid it up to start the charade over again in a new shell
that is the point - "if" the FRU was what it was claimed to me. with all of the engorgement and enriching of a limited few and years and years of the same cycles occurring - you still believe the FRU had any market viability to begin with...?
lot of enthusiasm on the boards and posters talking about these prices never being seen again but the buying does not support these sentiments. this suggests the next move will also be short lived and probably remain volatile until these weak hands have become frustrated with the lack of movement, sell, and move on.
this more than likely going to act like a trading stock (rather than a long term investment) until 3Q14 numbers are released. seems to be too many tentative buyers/holders that still havent been convinced the company has turned the corner and/or the PRs are fluff. these have been some pretty solid announcements and there has been very little reaction.
many supporters dont want to read/admit this but this is testament that the market simply does not believe the story that the company is selling or dont trust mgmt to take the company to the next level
very strong cash position
major agreements that have been renewed with major players
increased coverage/acceptance of key product line in Europe/India
continually increasing third party data/results for new indications.
EECP has become very tired and micro cap traders/investors have given up on the potential/company
mgmt cannot effectively communicate how they are going to specifically drive top and bottom line in any given period
disconnect between BOD and mgmt? (i am getting this)
continued negative net income when market is expecting positive - communication on SG&A is poor to inadequate
from a risk/reward standpoint - this should be trading between $1-2 which is where forward looking earnings would be minus increased expense of GEHC resigning/commissions and considering deferred revenues/commisions expense as actual revenues/income. they had a better year in 2013 than 2011 even though those revenues havent hit books yet. in 2011 - based on industry PE multiple with $3.8MM in net income - fair price for stock at that time was around $1.60-$1.80 (dont remember exact number)
so - why is there such a non reaction to a rather positive event and what should be their best quarter ever (2Q14 assuming a good portion of deferred revenues are finally realized/booked.)? if the company CEO can not clearly answer that question for shareholders - they have problems.
lowenstein - i agree with the majority of your sentiments but where is your rub? frankly - your message gets lost in the delivery. i have asked you several times before and you refuse to answer. why?
again - i think the whole reverse merger was a way for wright and meccarelli to hide what they were doing at MLOG under the guise of a private company and are more than likely funneling all of the profits/proceeds from the legal settlements on the IP fronts into their own pockets through bonuses, inflated salaries, etc that are no longer under the scrutiny of the public eye/SEC
the SEC dropped the ball on this one. they were spoon fed the particulars and so far (at least from anything that is publicly available) have yet to even start an investigation around:
share restructuring while company was non reporting.
insiders dramatically increasing shares while non reporting.
where the missing MobilePro shares are. they are listed as owning 1.7MM of NUTT but they had 3.1MM of MLOG when it only had 7MM outstanding.
did not provide financial data prior to reverse merger
both meccarelli and wright are 5%+owners of NUTT but never were at MLOG while they were reporting
they withheld shareholders with material information about IP settlements
did not take the reverse merger to vote. they claim they didnt need to because the majority of the shareholders cnosented ahead of time. this really isnt/shouldnt have been possible since the 3MM shares that MobilePro owned are supposed to be in a receivership and neither Wright nor Meccarelli were ever listed #$%$ owners. there is no way they had the shares to make that vote legally.
i have plenty of beef as a MLOG holder. where does yours come from?
les got paid VERY well to "reverse engineer" or as you put it - provide blueprints. in the solid modeling world - that is referred to as taking an existing product and recreating prints, executable files that can be fed to production equipment (such as CNC machines) to produce the parts needed to recreate the finished product in full scale production. while that can certainly be a tedious task - what was he really being employed to do?
obviously i am very cynical and have been a ardent critic of this company. however, looking at the history and every thing you have seen throughout - does it not make sense that he was contracted by the company to provide "blueprints" under the guise that they were ramping up for full production? that maybe he saw an opportunity for some quick money on a project that he could care less about and would never see the light of day? engineers are constantly being asked to create things or provide models for a design that they do not agree with, could care less about, or intuitively know/feel they will never make it. however, they arent goign to tell someone "no" if the work pays well. the marketing and such is up to the client - not the engineer/design house.
maybe les saw another opportunity to make some more quick money and ran with it only to realize he was facing some liability and then slowly and silently backed away (like the long line of consultants and special advisers have throughout the years).
history supports my assumptions on his involvement and that the blueprints were only for optics to keep the charade going.
those are rough numbers in terms of some estimates/assumptions. interest/option expense can have a dramatic impact on SG&A/expense line and it would be prudent for the company to bury all cash into the business (inventory, marketing, R&D, etc) instead of paying corporate taxes/burning up excess forwarded losses. however, those that understand valuations and accounting know how to look through the sheets and know the true strength and drivers of cash/profits. if they start producing those kind of revenues and the growth trend supports them taking real market share (which will be measured by repeat orders and increasing demand from distributors) - then the profits will come.
again - that is the allure of retail. small ideas/businesses can be quickly scaled up at minimal cost and are easily understood with respect to the impact of increasing the business and what it means to the bottom line.
i got in because the founders were true marketing guys, understood the space/buying mentality, had tenacity, and always seemed to be working. when one looks at their compensation (very modest for what they are doing and heavily loaded on actual sales/performance incentives and not some mushy, non reported metrics set up by a competition committee) coupled with the deferred salary in order to keep cash in the business - they appear to have this set up and vested for the long term. as a long term invester/shareholder - i want the mgmt/insiders to be as vested and committed as i.
while this isnt usually the space i invest in - it has a certain appeal and definitely considerably more "fun" than the normal long term stock.
taking this further to look at multiples and share price - if they double production every quarter - they would end up with $7.9MM in revenues and close to $3.4MM in net profit. assume half of that as they increase commission expense, corporate tax (which retained losses would cover for the foreseeable future), and increased marketing/sales expense and that is $1.7MM in earnings. with current share count around 135MM, that would produce an EPS of $0.013/share. if the industry PE multiple of 22 is assigned to the EPS - that would justify a share price of $0.28/share
with a growth multiple applied (2 - 4 times industry average): a PE of 44 would provide a fair market share price of $0.56/share and a PE of 66 (3x) would be $0.84/share.
now - current energy shot market is roughly $1.7BB as of 2013. at just 1% market share - that is roughly $17MM in revenues without assuming the 15% growth in this market. that is just over twice the revenue they could be doing be self sustained sales. at $17MM - they would be close to $8.7MM in earnings or if using 50% of that - $4.85MM/year in earnings. that would provide a share price of $0.84/share with a PE of 22 and with a 2x multiple - that would be $1.61/share. and that is only at that is at only 1% of market share and a relatively conservative earnings relative to revenue.
again - the power of retail. it is very scalable if the product is accepted and takes off.
from picture - it looks like 20 pallets have been produced on initial production run or at least what is being shown on twitter/facebook.
there are 7200 bottles per pallet which is 144K bottles in the 20 pallet run. there are 24 bottles to a case so that is 6000 cases which the company stated.
per 2013 10K (released 4/21/14) - they have average revenue of $27.55/case which equates to $165K in revenues on initial run. per 10K - the absorbed cost per bottle is $0.47 which has product cost on initial run of $67.7K. the difference should be gross profit (before overhead - SG&A) which is $97.6K.
last 10Q - SG&A was $327K (Selling and marketing was $187K and general and admin was $140K).
if they do this same run each month - that is $495K in revenues in 3Q14 and GP of $292.9K. If they do 4 runs in the quarter - that is $661.2K in revs and $390K in GP. therefore - if they average 1.11 runs/month in a quarter (a run = 6000 cases/20 pallets) they will break even. if they do 4 runs - they have a net profit of $63K which would be $254K.
at one run per month - they will have the cash flow (theoretically) to sustain production at 1.3 times the rate. this assumes SG&A remain relatively flat and cash used elsewhere doesnt accelerate. while that will more than likely happen - they raised $350K in the last quarter which provides roughly 5 runs or 2.5 runs and covering SG&A. at cash flow positive with one a month - that allows considerable growth.
now - if the reorder rate stays steady (let alone grows) - they will be self sustaining at that rate after one quarter. if they double their capital raise - they theoretically can increase production by 4X assuming SG&A is kept in check. even at 1 run/month - they generate $1.98MM in revenues on energy shot alone.
this is the power of retail and why the price continues to climb. if no adverse affects (negative lawsuit outcome, FDA inquiry, etc) - the company should accelerate revs and gross profits quickly.
one would hope.
for all of those giving a thumbs down - why not try to engage in the discussion. do any of you giving the auto thumbs down even know the impact Dempsey had on this company/stock and was the primary driver behind the buyback ? the buyback which at this point has almost been completely nullified?
how many of you thumbs down have actually ever spoken directly to any of the mgmt or directors?
you can continue to thumbs down and you will drive away those that are actively working on behalf of all shareholders to ensure those in charge are held to task for their fiduciary responsibilities.
this company is in a very unique position in penny land. they have cash, no debt, growing revenues, and seemingly unlimited opportunity on two fronts. yet - their stock continues to decline in one of the strongest bull markets we have ever seen. why? have any of you unabashed supporters have a sound theory on why the price declines when risk continues to be mitigated and reward continues to increase and/or get closer? that defies logic and certainly every normal trading/investing axiom.
go ahead and keep your head in the sand and blindly trusting mgmt and BOD have your best interests at heart with every vote and decision. that worked well for Enron, GM, Solyndra, shareholders and on and on. something is not right between the BOD and mgmt. there is a major disconnect somewhere that Wall Street does NOT like. however, feel free to continue to hope and pray instead of ask the tough questions and really immerse yourself in the due diligence required not to get fleeced.
also - if they do not get it together soon - you will have another 10-15MM shares to absorb which is 2-3 times the capital used to take out/silence Dempsey. at that point - you will be looking back at $0.08/share and all that momentum created over the last two years will take 4 times as much capital to overcome
TA is more for traders/momentum players. it requires consistent and/or large volumes to be fairly predictable. hedge funds and professional money managers are the ones that create the algorithms and then use them against traders as they have "inside knowledge" of the buy/sell limits. however, in this case, the action isnt being driven by traders/TA. it appears to be some dedicated accumulation. there was no reason for the price decline and certainly not from that volume perspective. someone/group put some capital into play to drive the price down and quickly forcing out recent traders. the resistance they faced was from long term investors/players (like me and others) that saw another attractive price point and started buying against them. if they do not crack that resistance, they will close the short positions and ride the long back up as the supply/demand reverts (which in essence - is the foundation for TA to begin with: the prediction of inversions based on models).
i think we are seeing that now. i and several others i know who like this stock started actively and aggressively buying this when hit dropped below $0.045. now that they have shaken the trees and no more easy shares are coming - they will stop fighting the resistance (which is the natural market forces TS alluded to).
besides all of the upside and potential that has been discussed numerous times, the two biggest things going for this is investors can actually touch, feel, and taste the product which is VERY rare in the penny stock world (or even most stocks for that matter). second, which fuels credibility to the first is being actively promoted by a household name. whether or not the product/company actually succeeds is somewhat immaterial to the potential and risk/reward scenario being set up now. right now, investors are going to continue to put a premium no success as risk continues to subside. barring any adverse news - that should continue and drive price up.
no sellers coming down to the $0.04 range and buyers are slowly inching up the BID. very little being offered on the ASK as well. $0.06 trade earlier was probably a feeler thrown out to see if the market was ready to move. i would not be surprised to it trade aggressively later on in the trading period back to that range.