Shareholder Question: Current Situation

QUESTION

  • With all of the great news and developments in recent months, why is the stock so grossly under-performing?   Is it all the dilution from the 504’s? I’ve had this stock (1.1 mil shares) for almost 3 years now and I’m down about 80%.  In your opinion what has to happen to get back up over a penny?  Will you be in a position to buy back stock once revenues from DR start coming in? Please give me a reason to be optimistic other than dangling vague news about the pending NA’s. Thanks
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ANSWER

Your question sums up the situation for a number of shareholders, this is why it is important to deal with it in this open environment.  It would be easy for me to blame short-sellers and a few bashers on the principal public discussion board, iHub, but that would be too simplistic.  They certainly deserve criticism for their many misleading or outright false statements intended to sow the seeds of dissension within the shareholder community, for reasons best known to themselves.  They know what they are doing, enjoy doing so and are probably benefiting.  Criticism of their actions plays no part in their assessment of their own conduct. 

Having said that, they would not be able to be so effective if the circumstances of the company were more advanced – therefore the current share prices is more my fault than theirs.  Ultimately, the company has not yet progressed far enough to be resilient to such targeted attacks – and no one is more responsible for this than me.  The decisions that I have made have brought us to where we are.  In many ways,  we are in a good place, but being “close” does not cut it  – and the reaction of the market, in the form of the current low share price, makes any discussion of our operational progress unsatisfying for shareholders who have a capital loss in their portfolio – even if it is an unrealized loss which can easily become a capital gain “overnight” at any time.

The bottom line is that the attainment of one or more of the 3 principal large retailers with whom we have earned a place on their short list for approval to be carried in their stores would be so significant in its positive impact, that our current challenges would disappear substantially.  This is simply because the scale of operating in those account(s) would profoundly alter our platform from being a brand that aspires to be a household name, to a brand that has the practical means to be that, coast to coast.

The unvarnished truth is that this is what it will take for the share price to increase substantially.  The risk that we are all taking as investors, myself included, rests on this question.  What large U.S. accounts will we be able to gain that put us within reach of consumers coast-to-coast for a nationally coordinated presence?

I have provided a great deal of detailed information about our progress and efforts in this regard.   By reviewing everything that I have said over the years, on public record, you will see that the process of growth has been laid out openly for shareholders to see, including our challenges.  It is rare amongst our peers in the penny stock environment to be so forthcoming so that risk takers can make their own informed judgments as to the risks involved.  My own judgment is that we have all sorts of reasons to expect the firm to advance significantly, and the share price to reflect this.  However, ultimately, I have never “sold” our shares – but rather offered participation to the strongest of the speculators who, understanding the risks, want to be part of the upside potential.

Anyone who tells you that I don’t care about the share price or don’t understand the need for us to accomplish our goals on an urgent basis is of course just plain wrong.  My colleagues and I are working hard and deeply appreciative of the openings that have finally been provided to us by substantial accounts that are looking at us very seriously.  They are fully aware of all our circumstances and are comfortable that we are a company that they could do business with.   It just boils down to their review at the moment, which is going on as we speak.  We have no reason to fear what the outcome will be, but similarly, I do not yet have the final decisions.  We are ready proceed, and they know this.Accordingly, the best thing that our current shareholders can do is await the outcome of those decisions.

There will be a substantial decline in our dilution rate when the share price recovers, as I am confident that it will – and more so.  Reviewing our market capitalization figure, we have been at a much higher level before, even allowing for the difference in O/S.  This company’s integrity and solid operating style will bring its own rewards when we get our “break” with the listing(s) that we need.   By this standard, we are in much better shape than other penny stocks that have provided substantial returns.   I have no reason to doubt that we will deliver this outcome too.



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