It's, more than likely GHS selling shares they hav
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Posted On: 11/29/2017 5:20:12 PM
It's, more than likely GHS selling shares they have from the initial Put Notices of the Equity Funding Agreement.
However, because of the average daily dollar volume limitations, the first tranches of the EFA will probably be Put Notices in the $150,000.00 range which will amount to less than 15 million shares. GHS does have the option to convert some of the Exchange Note from the Meadows Settlement at a 37% discount. In any case, expect them in the early going to sell everything they buy or convert. They have $1.2 million of risk exposure to get covered. The more they sell into the retail market, the higher the average daily dollar volume becomes meaning the larger the next Put Notice from RMHB can be, and RMHB wants more than $150K. Frankly, they need a lot more more than $150k to undertake the new product development. Further, if the entirety of the 300 million shares registered in the Form S-1 get sold, the company will likely only net around $2.5 million. At least that represents a start of what is needed to start over.
Understand that the slower the dilution is, the slower RMHB gets the cash from the Equity Funding Agreement. This is why I'm forecasting April, at best, for the product launch.
I believe we are beyond good news PR,s supporting the PPS. The dilution will trump anything we hear. A well planned product launch with great marketing lead up is what it will take to halt the dilutive erosion of the share price.
Consider this. The market cap right now is 14.75 million dollars. That is 36X annual revenues. If after 200 million new shares become issued and outstanding, the share price were to remain unchanged, the market cap would be 18.6 million dollars, or 47X annual revenues. Neither 36X or 47X will attract much new money.
However, because of the average daily dollar volume limitations, the first tranches of the EFA will probably be Put Notices in the $150,000.00 range which will amount to less than 15 million shares. GHS does have the option to convert some of the Exchange Note from the Meadows Settlement at a 37% discount. In any case, expect them in the early going to sell everything they buy or convert. They have $1.2 million of risk exposure to get covered. The more they sell into the retail market, the higher the average daily dollar volume becomes meaning the larger the next Put Notice from RMHB can be, and RMHB wants more than $150K. Frankly, they need a lot more more than $150k to undertake the new product development. Further, if the entirety of the 300 million shares registered in the Form S-1 get sold, the company will likely only net around $2.5 million. At least that represents a start of what is needed to start over.
Understand that the slower the dilution is, the slower RMHB gets the cash from the Equity Funding Agreement. This is why I'm forecasting April, at best, for the product launch.
I believe we are beyond good news PR,s supporting the PPS. The dilution will trump anything we hear. A well planned product launch with great marketing lead up is what it will take to halt the dilutive erosion of the share price.
Consider this. The market cap right now is 14.75 million dollars. That is 36X annual revenues. If after 200 million new shares become issued and outstanding, the share price were to remain unchanged, the market cap would be 18.6 million dollars, or 47X annual revenues. Neither 36X or 47X will attract much new money.
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