IMO the 2nd quarter report does not show much of a
Post# of 11899
Posted On: 09/01/2013 12:35:12 PM
IMO the 2nd quarter report does not show much of an improvement in the business.
Balance sheet looks good, however, it is a bit of slight hand to show $1.7M in assets (after liabilities) because the "note receivable" which makes up $1.35M of that "asset" is merely the "expected" Ironridge funding of $50,000/month over the next year or two.
In actuality, RFMK has about $360,000 in real "assets"; mostly inventory and a miniscule bit of cash on hand. If we deduct that amount by the current liabilities (~$140,000) we see that RFMK really has a net worth ("business value") of about $220,000.
Contrary to what some wish to believe, RFMK actually does have EARNINGS, albeit very weak.
For the six months ending June 30, 2013 there were sales of $13,500. This means they sold about 22 units per month over a six month time frame. Granted, this is extremely WEAK performance, however, it is important to remember that the company did not really ramp up any kind of massive marketing effort (spending a lot of money, etc) in order to sell vast quantities. The first half of this year was more of a trial (test) time and getting "exposure" to the market and getting out the CannaCig / Cumulus name and brand, as well as a few brick and mortar stores in California. In order to ever get ramped up to be selling tens or hundreds every day or week, the company will need to engage in a massive nationwide marketing effort which spans more than just social media. In order to make money a company must spend money (marketing). There is unfortunately no way around it. It is a bonus if a brand goes "viral" in social media circles but that is wishful thinking, it is rare real businesses do not count solely on freebie social media campaigns to garner huge sales. The cost of sales for those six months was only $4,000. I doubt any sane logical business person can assume that spending $4,000 on making sales happen could possibly bring in tens of thousands or hundreds of thousands in sales and revenues. That would just be fantasy land. This is the real world of business, and so real money must be spent on marketing tools, lead generation, ads and a wide assortment of marketing capabilities in order to drive sales. IMO a couple of possibilities can explain management's actions thus far. Either they just have not made the decision to go ahead and spend such money yet on these efforts, OR, they are inept and just do not know these basic business principles, OR, they have no intention and never had any intention of ever actually ramping up sales which would suggest they are using this company as a shell to dilute shareholders and shuffle around money to each other for "consulting services". Hopefully for the sake of long term investors they just have not yet had the money and desire to yet go forward with such a marketing campaign and they are planning to take such action in the future. IMO the constant funding by Ironridge should begin to give them enough so as to at least start building up a marketing effort. But I guess we shall see, it has been months since any progress in this company has actually been made. Many promises have been given by the CEO but nothing has happened. Summer has passed and now we are going into the Fall and still no 10K, audit, uplisting, new dry herb product, board of directors announcements, nothing.
The O/S continues to spiral out of control as the PPS declines on lower and lower volume.
Just in the year of 2012, Ironridge was issued 520M shares of stock. If we assume an average selling price of par value ($0.001) then that is just over half a million dollars. Well, I think we all know by now where half a million dollars ended up going... to a sketchy insider, Brent F., which has still not been explained by the CEO, other than the use of the standard dodgy "consulting services" expenditure.
The CannaCig and Cumulus are no longer being ordered by the company. I imagine because they still have so large an inventory; $360,000 worth of units they have never sold. Why? Simply because they have not (yet?) spent the money necessarily for marketing in order to sell product. Some of the foolery from the peanut galleries on other boards are claiming that the CannaCig/Cumulus are no longer being sold, that is not true. These units can be purchased but there is no ACTIVE marketing going on to sell them, but they are available for consumers to buy. The dry herb vaporizer is coming out "soon", allegedly, so we shall see what kind of interest there is in the market for the new device.
BTW, RFMK has listed a "consultant" for investor relations of whom has an email with a "mindspring.com" domain. I think we all know the past pedigree of the mindspring "business" and how it relates to Brent F, the insider who received half a million dollars from our CEO Mr Allinder recently, allegedly, for "consulting services". Let me be so bold as to suggest to the CEO and the other shareholders that in my opinion this company does NOT need to have an "investor relations" contractor of whom is doing who knows what and receiving exorbitant fees for "services", which to this day I have yet to see, as I have NEVER received a response from this CEO once over the years I have sent sporadic communications in asking about the business. There really is NO "investor relations" dept for this company as well there should not be, yet I can just imagine in the next few RFMK quarterly reports seeing tons of investor monies getting handed over to these "consultants".
Also contrary to the belief of some who really do not know what they are talking about, not only does RFMK indeed have earnings but the earnings is on the rise. Now, obviously, we already know that these earnings are pathetic, weak and miniscule. I am not pumping RFMK in how great their earnings are, I will be the first to describe their "earnings" as extremely weak. However they DO HAVE earnings and they are rising.
"The sales during the six months ended June 30, 2013 were $13,546, an increase of $10,709 or 377%, as compared to $2,837 for the six months ended June 30, 2012"
When one is doing calculations for analysis on a stock, company and it's earnings, typically the "P/E ratio" is derived from the rate at which the earnings increases or decreases (there is a possibility to have a negative P/E ratio). At 377% growth, the P/E of this company (if sustained) portends a rather high P/E going forward into the future IMO. Of course, the market will decide over time what the expectations for earnings will be and how much investors/traders are willing to pay for those earnings and the expected earnings growth. In my own calculations I share with fellow investors and RFMK followers, I like to just assume a rather standard P/E of 30 for most high growth (high risk) micro cap companies. Because the growth of penny stocks can typically be rather explosive. Most of the low growth large companies on the S&P have a P/E of 10 or thereabouts, so I do not think it is so outlandish to assume a P/E of 30 or so for some of these penny stocks. Actually, if a company's balance sheet is net positive (assets vs liabilities) AND it has positive earnings and earnings growth then typically an analyst would tack on the per share "business valuation" onto the EPS*P/E and divide that by the number of shares in the company. I leave such calculations to all the investors but suffice it to say that in my opinion, the current share price of RFMK drastically under-values the current value of the company and the future potential for sales and revenues. All just my honest opinions, of course. BWTFDIK, right??!!
You must unlearn what you have learned. The dark side clouds everything.
$RFMK
Balance sheet looks good, however, it is a bit of slight hand to show $1.7M in assets (after liabilities) because the "note receivable" which makes up $1.35M of that "asset" is merely the "expected" Ironridge funding of $50,000/month over the next year or two.
In actuality, RFMK has about $360,000 in real "assets"; mostly inventory and a miniscule bit of cash on hand. If we deduct that amount by the current liabilities (~$140,000) we see that RFMK really has a net worth ("business value") of about $220,000.
Contrary to what some wish to believe, RFMK actually does have EARNINGS, albeit very weak.
For the six months ending June 30, 2013 there were sales of $13,500. This means they sold about 22 units per month over a six month time frame. Granted, this is extremely WEAK performance, however, it is important to remember that the company did not really ramp up any kind of massive marketing effort (spending a lot of money, etc) in order to sell vast quantities. The first half of this year was more of a trial (test) time and getting "exposure" to the market and getting out the CannaCig / Cumulus name and brand, as well as a few brick and mortar stores in California. In order to ever get ramped up to be selling tens or hundreds every day or week, the company will need to engage in a massive nationwide marketing effort which spans more than just social media. In order to make money a company must spend money (marketing). There is unfortunately no way around it. It is a bonus if a brand goes "viral" in social media circles but that is wishful thinking, it is rare real businesses do not count solely on freebie social media campaigns to garner huge sales. The cost of sales for those six months was only $4,000. I doubt any sane logical business person can assume that spending $4,000 on making sales happen could possibly bring in tens of thousands or hundreds of thousands in sales and revenues. That would just be fantasy land. This is the real world of business, and so real money must be spent on marketing tools, lead generation, ads and a wide assortment of marketing capabilities in order to drive sales. IMO a couple of possibilities can explain management's actions thus far. Either they just have not made the decision to go ahead and spend such money yet on these efforts, OR, they are inept and just do not know these basic business principles, OR, they have no intention and never had any intention of ever actually ramping up sales which would suggest they are using this company as a shell to dilute shareholders and shuffle around money to each other for "consulting services". Hopefully for the sake of long term investors they just have not yet had the money and desire to yet go forward with such a marketing campaign and they are planning to take such action in the future. IMO the constant funding by Ironridge should begin to give them enough so as to at least start building up a marketing effort. But I guess we shall see, it has been months since any progress in this company has actually been made. Many promises have been given by the CEO but nothing has happened. Summer has passed and now we are going into the Fall and still no 10K, audit, uplisting, new dry herb product, board of directors announcements, nothing.
The O/S continues to spiral out of control as the PPS declines on lower and lower volume.
Just in the year of 2012, Ironridge was issued 520M shares of stock. If we assume an average selling price of par value ($0.001) then that is just over half a million dollars. Well, I think we all know by now where half a million dollars ended up going... to a sketchy insider, Brent F., which has still not been explained by the CEO, other than the use of the standard dodgy "consulting services" expenditure.
The CannaCig and Cumulus are no longer being ordered by the company. I imagine because they still have so large an inventory; $360,000 worth of units they have never sold. Why? Simply because they have not (yet?) spent the money necessarily for marketing in order to sell product. Some of the foolery from the peanut galleries on other boards are claiming that the CannaCig/Cumulus are no longer being sold, that is not true. These units can be purchased but there is no ACTIVE marketing going on to sell them, but they are available for consumers to buy. The dry herb vaporizer is coming out "soon", allegedly, so we shall see what kind of interest there is in the market for the new device.
BTW, RFMK has listed a "consultant" for investor relations of whom has an email with a "mindspring.com" domain. I think we all know the past pedigree of the mindspring "business" and how it relates to Brent F, the insider who received half a million dollars from our CEO Mr Allinder recently, allegedly, for "consulting services". Let me be so bold as to suggest to the CEO and the other shareholders that in my opinion this company does NOT need to have an "investor relations" contractor of whom is doing who knows what and receiving exorbitant fees for "services", which to this day I have yet to see, as I have NEVER received a response from this CEO once over the years I have sent sporadic communications in asking about the business. There really is NO "investor relations" dept for this company as well there should not be, yet I can just imagine in the next few RFMK quarterly reports seeing tons of investor monies getting handed over to these "consultants".
Also contrary to the belief of some who really do not know what they are talking about, not only does RFMK indeed have earnings but the earnings is on the rise. Now, obviously, we already know that these earnings are pathetic, weak and miniscule. I am not pumping RFMK in how great their earnings are, I will be the first to describe their "earnings" as extremely weak. However they DO HAVE earnings and they are rising.
"The sales during the six months ended June 30, 2013 were $13,546, an increase of $10,709 or 377%, as compared to $2,837 for the six months ended June 30, 2012"
When one is doing calculations for analysis on a stock, company and it's earnings, typically the "P/E ratio" is derived from the rate at which the earnings increases or decreases (there is a possibility to have a negative P/E ratio). At 377% growth, the P/E of this company (if sustained) portends a rather high P/E going forward into the future IMO. Of course, the market will decide over time what the expectations for earnings will be and how much investors/traders are willing to pay for those earnings and the expected earnings growth. In my own calculations I share with fellow investors and RFMK followers, I like to just assume a rather standard P/E of 30 for most high growth (high risk) micro cap companies. Because the growth of penny stocks can typically be rather explosive. Most of the low growth large companies on the S&P have a P/E of 10 or thereabouts, so I do not think it is so outlandish to assume a P/E of 30 or so for some of these penny stocks. Actually, if a company's balance sheet is net positive (assets vs liabilities) AND it has positive earnings and earnings growth then typically an analyst would tack on the per share "business valuation" onto the EPS*P/E and divide that by the number of shares in the company. I leave such calculations to all the investors but suffice it to say that in my opinion, the current share price of RFMK drastically under-values the current value of the company and the future potential for sales and revenues. All just my honest opinions, of course. BWTFDIK, right??!!
You must unlearn what you have learned. The dark side clouds everything.
$RFMK
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