Analysis of EFFI July 26 2017 by Newswire.world – Author Richard C Tang – public company analyst.
Effi (Efftec) is a OTC Pink Current Company.
It has released a news release on July 21, 2017.
The full press release is below on this page.
There are 8 main points in the press release.
- Restructuring of the Company assets – There are three (3) sectors that the Company states it is focusing on as separate entities. This is a significant point because the press release states : with possible future related businesses or activities,
- Spin-off – definition: In the press release it states verbatim “with an intent at some future date to either spin-off or sell each segment or vertical”
- A Spin-off is a formal registration to create a new business. If the parent company is a Public Company, in this case, EFFI, then it means that they may register three separate filings to make child subsidiary public companies. A spin-off is a situation where the common share shareholders will have a apportioned pro-rata ratio of the shares of the child company. This is a dividend structure, whereby owning EFFI may give spin-off shares of the child company to the EFFI shareholder. This is treated as a dividend in most cases and is still subject to capital gains upon the disposal of the child security.
- Disposal of assets for cash. In the press release it states ” The Company has also decided to sell the suite of five individual industry-specific patents which focus on technologies and methodologies that improve the efficiency of gas discharge lighting systems, commonly known as HID and CFL lighting systems”
- When a public company disposes of the patents through a sale, it will in turn increase the cash assets or in kind, and negate the depreciative cost of owning the asset, or the depreciation. This may indicate a reflection on the upcoming balance sheet if they do indeed sell the patents. Patents typically sell for the worth of the asset plus it’s potential worth depending on the exclusivity that the patent provides. The technologies and methodologies as subtly explained are part of what is called intellectual property, or in lamens terms how the patent works and what’s required to make it work. Selling a patent along with the system of how the product works brings a multiple earnings potential when selling the “system” rather than the patent itself.
- “The Company is pleased to report, however, that its chief executive officer has returned to that position on a full-time basis. In addition, The Future Farms has been able to utilize its established line of credit to purchase the Company’s products on a regular, recurring basis.”
- This is a point that states that by retaining the CEO of the Future Farms, it will have a means for the company to borrow money and grow its business. This indicates that it may not require signing future debt holders or any more external debt holders, and that it has strategically retained the company account line of credit to avoid OTC markets Toxic Debt.
- “Lastly, the Company is currently pursuing a leasing option with a medical marijuana grower in California which was initiated by the Consulting Partnership Group whereby the leasing arrangement will utilize the Company’s proprietary container design and will be funded as part of the Company’s restructuring.”
- This states a new business of marijuana growing for EFFI. What might have been overlooked in this subtle statement is the “proprietary container design”. What is a container design? Marijuana is subject to growing under strict guidelines and contained spaces. This is a very subtle statement that the company is creating “containers” for growing marijuana. A similar container design company is $SANP, santo mining podwerks. For example Podwerks has recently announce a successful initiative to sell pods as shipping containers for a profit. The profit margin for Podwerks for each container, for example, is $40,000 profit per container. This may bode well for EFFI as well.
- “The Company is in preliminary discussions with its largest debt-holder along with an unaffiliated third-party investor, which could provide not only for certain financial flexibilities,”
- This is a very significant statement where there is debt holder negotiation to prevent dilution. This may create stability in the company if it is negotiated amicably. This is a suggestion and not a fact.
- “Lastly, the Company has decided that it does not intend to either increase its authorized common shares or to enact any share splits or reverse share splits and, in consideration thereof,”
- As clearly stated, no increase in authorized common shares, meaning that the price per share of common shares should be well grounded and set.
- Not enacting any share splits is to garner respect and potential positive bias of goodwill for the shareholder for a sense of trust to not decrease the price per share.
- “ the Company has retained SEC legal counsel and an independent certified public accountant in order to commence the preparation of a Form S-1 registration statement in order for the Company to be a fully reporting issuer by the end of this year.”
- Filing a Form 1 S1 Registration will allow the company to achieve a higher ranking and prestige of the company status from Pink Current to QB or QX or potential upgrade to Amex or Nasdaq. It is required that stringent audits be made to successfully upgrade to the higher tiers. This garners higher respect because the accounting is stricter when all of the quarters and annuals are audited and signed off by a PCOAB auditor. This allows for higher potential for the company to increase its worth by bringing better quality intellectual property and investors in the future. This is a suggestion and not a fact.
In general, this press release has 8 significant points that has not been highlighted until we have analyzed this. This is a analysis from our editorial team. This is not a paid advertisement. This is not paid or endorsed by the company. Our statement is not an endorsement of the press release.
We report on this particular press release because it is for the education of our 4,000 members and avid press release readers. We aim to provide clarity in the public company sector so that investors can have more information and better understanding on their investments. This is not a solicitation to buy or sell.
This is officially released to the public by www.newswire.world author Richard Tang, public company analyst and editorial review of NewsWire World.
This is valid as of July 26 2017 and survives to July 26 2017 and makes not guarantees of the events of the future of the company or their promises stated.
Links to very important statements :
S1 registration: http://www.investopedia.com/terms/s/sec-form-s-1.asp
Pubco Spin off / Spin-out transactions explained: http://www.lexology.com/library/detail.aspx?g=815f7831-3a5d-414c-8d80-05db9ccf4ff1
Selling patents: https://www.legalzoom.com/articles/selling-your-patent-what-you-need-to-know
Santo Mining Podwekrs containers similar to the containers as explained in the press release: https://www.otcmarkets.com/stock/SANP/news/PODWERKS-Finalizes-Container-Grow-Pod-Order-and-Prepares-Shipment?id=164004&b=y
Efftec International, Inc. Announces Financial Restructuring and Provides Corporate Status Update
LAS VEGAS, NV / ACCESSWIRE / July 21, 2017 / Efftec International, Inc. (OTC PINK: EFFI or the “Company”), a holding company that focuses on sales of hardware, nutrients and professional consulting services into the hydroponics and indoor grow markets through various business segment activities, announced today that it is restructuring its businesses to better align with segment and managerial competencies. The Company’s strategic direction has now been organized along the lines of the following three segments or verticals:
- Consumables: Red Light Bakers — suppliers of specialty baking mixes;
- Hard Goods: Xe Lighting and private label lighting — suppliers of lighting products and nutrients to the indoor grow markets and Budz Sunglasses — manufacturer and distributor of specialty grow room safety sunglasses; and
- Professional Consulting Services: Consulting Partnership Group — suppliers of turnkey solutions and consultation for indoor agriculture.
The Company has developed and intends to further implement a technology-based “incubator model” for each of these business segments or verticals, along with possible future related businesses or activities, with an intent at some future date to either spin-off or sell each segment or vertical, either in whole or in part. The Company believes that this “incubator model” approach will maximize the Company’s value by providing shareholders with the ability to participate in the ownership of any separate segment or vertical spinoffs.
In terms of reporting upon the business and operational activities of the Company over the past year in light of this restructuring announcement, the Company provides the following status update.
The Company, after significant review by management and outside legal counsel, has decided to divest itself of its ownership position in Hemplife Industries and the Company is presently in discussions to sell its ownership interest to a potential buyer. The Company has also decided to sell the suite of five individual industry-specific patents which focus on technologies and methodologies that improve the efficiency of gas discharge lighting systems, commonly known as HID and CFL lighting systems, that was acquired in April, 2016 since further development of these patents are no longer relevant to the Company’s planned future business activities. The Company is continuing with its strategic partnership with The Future Farms despite the fact that its planned acquisition of that company has been further delayed due to various reasons mostly attributable to the temporary absence of the Company’s chief executive officer last year due to illness and various other issues attributable to unmet conditions specified in the acquisition agreement. The Company is pleased to report, however, that its chief executive officer has returned to that position on a full-time basis. In addition, The Future Farms has been able to utilize its established line of credit to purchase the Company’s products on a regular, recurring basis.
Lastly, the Company is currently pursuing a leasing option with a medical marijuana grower in California which was initiated by the Consulting Partnership Group whereby the leasing arrangement will utilize the Company’s proprietary container design and will be funded as part of the Company’s restructuring.
As previously reported, the Company and Chapman Aerospace are continuing to review opportunities to deploy Chapman technology in the hydroponics and indoor grow markets. The Company’s proprietary medium mix, developed and produced with its joint partner, Volcanic Solutions, has been tested with full expectations of excellent market acceptance. Although the Company has received an initial order of three hundred (300) bags per month, the fulfillment and logistics costs presently do not allow the Company to achieve its minimum profit margin expectations. The Company is, therefore, pursuing alternative ways in which the bagging can be performed in South Florida, close to the Company’s customer base, which would allow the Company to meet these profit margin expectations.
The Company is in preliminary discussions with its largest debtholder along with an unaffiliated third-party investor, which could provide not only for certain financial flexibilities, but also could include an infusion of new capital which the Company intends to utilize among its business segments or verticals to further its revenue growth and earnings potential as well as to pursue additional opportunities.
Lastly, the Company has decided that it does not intend to either increase its authorized common shares or to enact any share splits or reverse share splits and, in consideration thereof, the Company has retained SEC legal counsel and an independent certified public accountant in order to commence the preparation of a Form S-1 registration statement in order for the Company to be a fully reporting issuer by the end of this year.
According to Brian Tucker, President of the Company, “The restructuring actions along with the revised focus on the three business activity segments or verticals will greatly increase the Company’s ability to achieve further growth as historically evidenced by the increase of over 900% in net sales of $247,000 for the calendar year ended December 31, 2016 compared to $27,000 for the calendar year ended December 31, 2015.”
Safe Harbor Provisions: This Press Release may contain, among other things, certain forward-looking statements, including, without limitation (i) statements with respect to the Company’s plans, objectives, expectations and intentions, and (ii) other statements identified by words such as “may,” “could,” “would,” “should,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” or similar expressions. These statements are based upon the current beliefs and expectations of the Company’s management.
For further information, please contact:
Mr. Jack Morris, Chief Executive Officer
Efftec International, Inc.
SOURCE: Efftec International, Inc.