KALY Up 1800% since our alert!!


Saturday, July 23, 2016

KALY Up 1800% since our alert!!

Kali, Inc. (PC) (KALY)

0.093 ▲ 0.009 (10.71%)
Volume: 79,005

KALY Up over 1800% since our alert!!

Jul 22, 2016 Kali, Inc. Accelerates Growth Strategy With Acquisition Candidates
D
SARASOTA, FL–(Marketwired – Jul 22, 2016) – Kali, Inc. (OTC PINK: KALY) announced today that it has identified two acquisition candidates in the marine services industry and is in the process of conducting due diligence with a vision of acquiring both entities.

The first acquisition candidate is a marine mechanical repair, maintenance and installation company with over 15 years of experience in the Florida market. Its service team has over 75 collective years of experience servicing all types of marine vessels. The company has developed an extensive customer base, long standing wholesale supplier relationships, and an overall outstanding reputation in the industry.

Controlling marine growth is an expensive and time-consuming process. The second candidate is a marine specialty services company that has created a niche business to quickly and safely remove marine growth and other surface debris. They have built a foundation of providing high quality work at affordable prices.

“Our growth strategy is to quickly expand our market share through acquisitions and opening new markets. Our blueprint is to identify and target acquisitions that provide Kali with increased market presence, strong management expertise, customer reputation and loyalty strengths, diversity of marine services offered and strong supplier relationships. We are in the process of evaluating each company to ensure our criteria are met to execute our strategic plan,” stated Charles Yawn, CEO of Kali, Inc.

About Kali, Inc.
Kali, Inc. is a marketing and development company focused on small to medium sized market cap companies. Wave Marine & Yacht Services. a wholly subsidiary, of Kali, Inc., is a full-service yacht maintenance company which provides solutions for all aspects of the recreational boating lifestyle.

Forward-Looking Statements – This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties that could cause future results to differ materially from the forward-looking statements. You should consider these factors in evaluating the statements herein, and not rely on such statements. The forward-looking statements in this release are made as of the date hereof and Kali, Inc undertakes no obligation to update such statements.

CONTACT:
Kali, Inc.
(941) 444-6994
management@wavemarineservices.com

Kali, Inc. (PC) (KALY)
0.084 ▲ 0.0003 (0.36%)
Volume: 12,940 @ 1:25:26 PM ET
Bid Ask Day’s Range
0.084 0.086 0.0839 – 0.084

Understand These And You Might Have A Shot At Surviving The OTC Marketplace


Title: Top 25 Axioms Of OTC Investing 

Subtitle: Understand These And You Might Have A Shot At Surviving The OTC Marketplace 

Author: vantillian http://investorshub.advfn.com/boards/profile.asp?user=94357

INTRO 

I am calling these 25 points “axioms” in that they are propositions that are not necessarily proved or demonstrated but rather are self-evident to those who trade/invest on the OTC. In other words, these truths should be taken for granted and serve as a starting point or a foundation when deducing or inferring other propositions about OTC investing. I will not seek to prove these axioms to you…they just simply ARE. An axiom appeals to no other authority for verification…it stands on its own as the truth. Therefore, with these axioms we are dealing more with beliefs and less with facts. But without fundamental beliefs, you will have nothing whereby to interpret the facts. So sit up and pay attention because the following are very important ideas that could keep you from losing your shirt and help you to win nicely at playing the OTC market.

1. The Center Stage Axiom 

The longer an issue stays in the spotlight…the worse. There’s always one or more good reasons as to WHY a company is trading on the OTC…especially if it is a sub-penny company. There have been many times in the past couple years I thought I had found that “true gem” that was going to be another Yahoo. I believed in it big time. I bought into it big time! But after the initial run and a dead-cat bounce or two…things began surfacing that were completely damaging to the demand for the stock. Simply put, the higher a stock climbs in the investing world, the more its rear end shows…and OTC butts ain’t pretty. Are there the occasional rule breakers here? Yes (usually they are reverse merger plays). But those stocks are few and far between and they generally uplist very quickly to a higher exchange. As a general rule, the longer a company stays in the limelight, the more enemies it will attract. Bashers. Shorters. Bidwhackers. Apathy. New shares from various and sundry places (especially DILUTION and restricted shares coming off restriction). It’s always a war to make the PPS (read: Price Per Share) go up on any issue. Don’t stay too long at the war. Fight as long as you are advancing and retreat the moment you see the enemy reinforcements gathering. Or possibly better yet…retreat before you think you even heard the enemy reinforcements. Remember, it’s not your job to make a stock PPS go up, it’s your job to make your portfolio grow. OTC valor is much different than armed forces valor. 🙂

2. The Carpe Diem Axiom

Always take *some* profit when you’re sitting on significant gains 50% or higher. Unless you are already independently wealthy and view OTC investing *only* as gambling for FUN (which isn’t an altogether bad thing to view it as), take profit. The way to accumulate wealth playing OTC issues is to always exit too soon. Furthermore, it leaves one feeling pretty dern good when he left some on the table for the next guy and was not the chucklehead that singlehandedly killed the run. If it does make you feel good that you were the chucklehead that killed the run, shame on you. Always remember…you do not know the next time buying pressure will allow you to leak out of shares without injuring a stock and/or your portfolio! Seize the day. Seize the opportunity strong buying pressure provides.

3. The Itchy Trigger-Finger Axiom

Someone always has shares to sell to ruin a run. Read it again: Someone ALWAYS has shares to sell to ruin a run. Make this statement your computer desktop and/or screensaver. Say it to yourself ten times whenever you start your trading day. Paint it on the ceiling above your bed so it’s the first thing you see in the morning. Please understand that someone owns a whole lot of whatever stock you’re jazzed about at much lower average than you — and often times they own it for NUTHIN’ (i.e. compensated promoters, debtors, relatives of CEO, etc.). Also, if you think that YOU are the ONE that is holding all the shares that could potentially ruin a run…think again. Only God knows where all the shares are or will be coming from…because who knows what kind of shorts will attach themselves to your play and sell you nothing but VAPOR.

4. The Domino Effect Axiom 

Almost everyone that loses money playing the OTC looks to point a finger somewhere. They want someone or some entity to blame for their loss. Forget that the CEO sold 100M shares into the open market, they’d rather lash out at the popular poster that promoted, endorsed, and otherwise “pumped” the stock. Here’s what folks like that should understand…there is a domino effect of people getting screwed. Here’s an illustration: the CEO legitimately plans NOT to sell shares but some emergency comes up…and believe me…”emergencies” almost always come up for these guys! Selling shares is the easiest way for him to raise the money and “After all,” the CEO justifies to himself, “the reason I went public in the first place was to raise money.” The problem here is that the CEO failed to tell his promoters and/or closest investors about his need to raise funds and that group of people is living under the assumption that the share structure is stable (i.e the supply will remain the same). So the CEO got screwed by somebody and had to pay up. He screws the promoters and his closest investors and they had to pay up. Now the promoters and close investors will probably screw another batch of investors. Scenarios like this have happened more times than I can count! When something goes wrong and you’re holding several thousand dollars worth of stock, you’re not going to be looking to inform the world about things that will negatively affect the stock’s PPS! You’re looking for ways to bring in buying pressure, not decrease it! Folks love pumpers/promoters when they are helping the stock they are in go up. Folks hate those same pumpers/promoters when their stock is going down. Heroes and zeroes in the microcap world are one and the same…it just depends on the day. Remember this though…if the guy at the top decides to take advantage of people…he most certainly will succeed. What you need to know is your place in the food chain. And friends, if you’re a rookie to the OTC world…you are a bottom feeder that gets caught eating the crap of all the other fish in the ocean when the “Domino Effect Axiom” kicks into high gear.

5. The Vapor Shares Axiom 

If you see a poster battling the idea of shorting OTC issues with determination and vigil, sit up and pay attention…that poster is either a short himself or working on behalf of the shorts. People and/or groups with the right connections can and do short OTC issues…many times they short stock into oblivion with the full approval and consent of the leadership of the company. Contrary to popular belief, many OTC CEOs don’t give a flying fig newton what their stock price does…what they care about is getting their hands on YOUR MONEY. There is alot of money to be made when a stock goes up. There is even more money to be made when a stock goes down if you were selling vapor all the way down to .0001 and cover there. Microocap hedge funds exist. Microcap hedge funds manipulate stocks and steal the money of good people. Unless you are a microcap hedge fund yourself, you can almost never win a battle against a powerful microcap hedgie that is shorting the snot out of your beloved stock. Remember, this is an “axiom” that stands on its own. I will not seek to prove the validity of this point to you. You must simply either accept it or reject it.

6. The Glass-Half-Empty Axiom 

Bashers on message boards are a very real force to contend with and it’s not a coincidence that I’ve put this axiom after the “Vapor Shares Axiom.” It is easier to get a person to sell a stock than it is to buy a stock…and they know this very well. If your stock’s message board becomes infested with bashers…be careful! Unless you believe the company has some incredible news that may force these guys to cover or unless you know of a group with mega-bank that is going to push the stock and perhaps force a cover…be careful when playing with shorty. Many of these bashers will try and convince you that they are there out of the kindness of their heart to try and rescue other investors from the perils of a diluting CEO or worse. Nope. Their motives are to bring the PPS down down down. Bashers, in the end, are almost always right eventually because they are bashing OTC issues. They know axioms like “The Center Stage Axiom” too!!!

7. The Supply IS Demand Axiom

I have seen several runs simply because a stock has a low share structure. A low supply creates demand. Know the share structure. On plays where the TA is gagged, plan to exit within hours of entering and play the momentum only unless you have STRONG and SOLID reason to believe the stock will go up. Call transfer agents. Learn what authorized shares, outstanding shares, and float mean. The share structure is the first thing I look for when making a new investment…it should be the first thing you look for too. If a company is not willing to be transparent in this area, you can bet there’s a hundred other areas they’re not willing to be transparent about. I have and continue to invest in plays where the transfer agents are gagged (unable to report to you what the current share structure is) but I don’t plan to stay invested for long.

8. The Don’t Click The Mouse Yet Axiom 

Never buy a stock at the high of day after a significant run (good rule of thumb here may be 70-80%). Wait for a pullback. And while you’re waiting, do some due diligence. Check the company’s filings on pinksheets.com or otcbb.com. Read a few of their PRs. Check the history of the leadership there. Call the transfer agent (T/A) and ask for the share structure. And on stocks that are pulling back, buy at the bid. Remember that it takes both bid buyers and ask buyers to make a stock PPS go up.

9. The Morning Patience Axiom 

The first hour of the market is “amateur hour.” With most first-hours on hot issues, it’ll either be extreme bid whackage which will cause some panic selling which will create some excellent buying opportunities later in the morning OR it will be extreme ask slappage which will lead to a pullback around lunchtime. I hardly ever buy during the first hour of the trading day, and I’d venture to say 80-90% of the time that decision has paid off. I’d rather watch a few missed opportunities than be stuck in a bunch of “apparent” ones.

10. The Bruised Knee Axiom

There are too many enemies against an OTC issue’s PPS going up to NEVER lose a battle. Know how to take a defeat. You lost. YOU made a mistake. Evaluate what went wrong. Evaluate why YOU lost money. It’s okay to lose money occasionally but it’s not okay to be just as dumb after as you were before! Think, think, THINK! Don’t make the error again. Get smarter. Listen, school is expensive…tuition rates are high! If you want to make money trading the OTC you had better plan to spend the first year in school.\

11. The Show-Me-The-Money Axiom

I once asked a poster that was complaining about getting lied to on a message board: “Are you stupid in any other areas?” Seriously folks, everyone on a stock message board has an agenda…including ME. Including YOU. Consider how often your posts are seasoned with fiction and/or things that you simply DO NOT KNOW TO BE CERTAIN. Consider that you have most likely served up a poo-poo platter covered thickly with powdered sugar. Trusting stock message boards for accurate due diligence is like trusting the National Enquirer for accurate UFO sightings.

12. The I’m-Rubber-And-You’re-Glue Axiom

Develop thick skin if you plan to post on stock message boards much. ‘Nuff said.

13. The Know-Your-Anthropology Axiom 

Understand the nature of man! For this axiom, you need to be somewhat of a Christian theologian. The Bible clearly teaches us that mankind is not naturally good…he is naturally evil (Psalm 14 is a good place to start). The word Christian theologians use to describe our condition is “depravity.” Because of the fall of man, we are morally corrupt in every part of our being and tend toward wickedness (i.e. greed, theft, lying). We stand in need of redemption from a Savior. So understand that you are playing amongst people (including yourself) that are not naturally good…they are naturally bad. In other words, you’re playing with fire. Lies, half-truths, and misrepresentations abound in the OTC world. You better take EVERYTHING with a grain-of-salt the size of Texas. Some posters require more salt than others to digest. Be an evaluator of people. Learn how to ask the right questions. Make sure your yellow flags and red flags are ALWAYS working.

14. The Early-To-The-Party Axiom

Be willing to buy lower what you bought higher. I have often arrived to a party early. By “party” I mean a gathering of people and people’s money that will result in a stock’s PPS going much higher. By “early” I mean I got there before the stock was sitting at a low. I am always somewhat discouraged when a purchase I made continues to go down. But if I have done solid due diligence in the company, I often take it as an opportunity to add more shares cheaper and lower my average. In other words, don’t look at your initial investment as dead money and hope that it goes back up again so you can get out. Average down, do the due, and then promote your stock to others and help jumpstart the party. Be a spark plug.

15. The Next! Axiom 

Be looking to get out of an issue the moment you get in. Have an exit strategy in place. By buying a stock you are not entering into any kind of formal arrangement like matrimony. You are an investor and as such your goal is to make money. If your investment should go up within the first 20-30 minutes of purchase why is it any different taking some profit then as if it took 20-30 days for it to go up? Get in. Lock in profits. Ride freebies.

16. The Grow-Up Axiom 

Somebody once said: “If somebody screws you once, shame on them. But if somebody screws you twice, shame on you.” In the OTC world I would modify it a bit to say: “If somebody screws you once, shame on you. If somebody screws you twice, you really are a moron.” Take responsibility for ALL your investment decisions. Almost nothing ever happens as planned or hoped here on the OTC. There are too many enemies against making a stock’s PPS go up. If you’re going to play the game down here…you better be ready to accept FULL and COMPLETE responsibility for EVERYTHING YOU DO IN THIS INVESTING REALM. Point the finger of blame at only one place: yourself.

17. The Ask-Yourself-Why Axiom 

Understand that many of the people encouraging you to buy an issue are compensated promoters whether they disclaim it or not. Most times they do not have your best interest in mind, they have their best interest in mind cause they’re sitting on a mountain of stock and can’t wait to turn paper into cash. It has been said that “the man that can answer the question ‘what’ will always have a job but the man that can answer the question ‘why’ will always be his boss.” Be continually evaluating EVERYTHING by asking questions that begin with “WHY.”

18. The What-Was-That-Again? Axiom 

Understand you are almost NEVER getting the whole story. The only way optimists will survive in the OTC is if they become compensated promoters. Pessimists can either become paid bashers or fast flippers. The OTC calls for realism. Be a realist. To be a true OTC realist you need to know and understand all that you are up against to make a stock’s PPS go up.

19. The Public-Versus-Private Posts Axiom 

Many of the people pumping stocks are stuck in them and want to inspire a whole new wave of bagholders to come take their place. Often times what is being said on the public message boards is completely different than what those same posters are saying behind closed doors. Realize this. Digest this. Embrace this. Don’t be naive.

20. The Buy-The-Story-Not-The-Company Axiom 

So you bought a stock because of a solid PR that came out. Cool. Why did you buy? Because of the story. Do you really know anything else about the company? Is it real? Do they have a big building? Do they have equipment? Are they producing? Forget all that. In many ways it is irrelevant. If you are going to invest in the OTC you had better learn to invest in STORIES. Now, ironically, one of the dictionary definitions for “story” is “a lie or fabrication.” Do you really think that you are investing in the same caliber of companies on the OTC as you would on the NASDAQ or NYSE? Don’t be naive! Do you think what your company outlined in that lovely PR is really going to happen? Two words for you my friend: SAFE HARBOR. In the OTC you are investing in POTENTIAL ALONE; therefore, be a discerner of the POTENTIAL OF THAT COMPANY’S STORY. What has great potential? Water to China? American Idol in a 3-D world? Gasoline replacement in a weed? Oh yeah baby! All those STORIES have great POTENTIAL. But there’s a monster “IF” involved in every one of those. After some time, the reality that the “IF” is gonna stay a big “IF” sinks in and the stock PPS encounters a slow death. Sadly, some of the really real OTC companies go unnoticed because they do not have a great story with potential. The term many investors use to refer to the story is “kool aid.” Does your stock have good “kool aid?” Well, does the potential of your company make you want to buy it? Does it make other want to buy it? I try to avoid investing in OTC issues that do not have good kool aid flowage or the potential for good kool aid flowage. Wow. What a concept. On the OTC sometimes you have to invest in the POTENTIAL POTENTIAL of a company. (That last sentence wasn’t a misprint. Read it twice if you need to.)

21. The Don’t-Gamble-Away-The-Mortgage Axiom 

You *should* expect to lose your entire investment. You *should* expect to lose more money than you make playing OTC issues until you wise up, learn these axioms, and behave according to them. If you are playing the OTC to try and make some quick money to pay off a debt, good luck with that. Unless you are an experienced OTC Jedi Master that does this for a living (and I’m by no means saying that I am one or that I have arrived!), you better ONLY USE MONEY YOU CAN AFFORD TO LOSE.

22. The Dingleberry Axiom 

This is the term I save for bidwhackers. Realize that the OTC market is unfortunately full of people that don’t understand the concept of selling at the offer. They are more than happy to whack out the bids on an issue for their lunch money. Realize that usually the longer an issue stays in the spotlight, the more problem it is gonna have with dingleberries, er, whackers.

23. The Bid And Offer Axiom 

Level 2 is often the truest of truths in the OTC. It tells a very accurate story. If you cannot afford to spend your day glued to L2 watching the issues you’re trading…you shouldn’t expect winning trades on the OTC. I simply cannot stress enough the importance of having LIVE Level 2 and understanding it. Spend some time paper trading which watching L2s. Practice. Practice. Learn. You just gotta understand what the Level 2s are telling you. Some of my friends would also come in here at this point and say it is not only L2 it is also the chart. I would argue that it is MORE L2 and LESS the chart. By understanding and watching L2 I feel like I can identify dilution much faster than by simply looking at a chart and all its indicators.

24. The CEO Is A Scumbag Axiom 

Now I know we’re all quick to defend our favorite CEO…but the truth is he or she is a scumbag. Now what level of scumbag she or he is I cannot say…but with confidence I can say that every OTC CEO is a scumbag. Deal with it.

25. The Know Your Friends And Enemies Axiom 

You will have a hard time succeeding down here without friends. Any amount of public success will bring you more friends and new enemies. Understand which is which. Keep your nose clean. Loose lips sink ships. Know when its time to sever a relationship. Know when its time to repair a relationship. Know your associates.

Now, I must ask you, knowing all of the above, do you REALLY want to mess around with penny stocks? I mean…really???

In Conclusion 

Those of you that have never traded in the OTC or are just beginning to trade down here and are right now shaking your head and thinking that you somehow transcend these axioms…you will have to learn the hard way. Traders like me will end up with your money. I want to thank you in advance for helping build my portfolio.

Those of you scared out of your gourd right now…GOOD. You should be. You should realize that you’re absolutely nuts to be risking money down here (and I use the term “down here” on purpose) in the OTC!!!

Investing in the OTC is very risky. It’s riskier than Alaskan King Crab fishing! But the rewards often outweigh the risk. The lure of monster profits is too much for many of us to say “no” to. The idea of finding that one true gem in a million that becomes the next Yahoo is too strong a draw for many of us to avoid. The surge of adrenalin that comes when profiting 100% on your money within the same hour you made the trade is addicting. The fun that comes from finding friends and having a successful trade with them is indeed AWESOME.

The OTC is a crazy world that attracts some pretty crazy people…and yet I have chosen to live in this world…I have accepted the consequences of investing in the OTC. I feel safer putting my money in an OTC issue than a NASDAQ or NYSE issue because I understand the OTC.

I have written all of the above as a student, not a teacher. I will always be a student of the OTC…ever learning. I do believe that is a good attitude to have if you want to truly be a successful OTC trader/investor. I do hope that some of what I have said above will help you retain and/or build your bank!

If you want to quibble about something I’ve stated above or you’d like to tweak something to make it a little more accurate…please feel free to come and engage me on my Van Scan board here: http://investorshub.advfn.com/boards/board.aspx?board_id=12481

Sincerely,

vantillian

NOTE: This material is original with me but please disperse and dispense far and wide as long as you give credit and you think it will be helpful. 

QUES Quest Solution Inc. – $QUES earnings are out, Growth


QUES Quest Solution Inc. – $QUES earnings are out, Growth.

$QUES earnings are out, Growth Continues, Organic growth continues, Cash flow up

 

ZERO DILUTION, HOW MANY PENNY OR EVEN NYSE STOCKS CAN SAY THAT?

 

Please remember, as you read this, they changed the way they report earnings as of Jan 2015. They now defer revenue and earnings on software over the life of the contract, this despite them actually GETTING the entire revenue and profit up front. They didn’t do this in 2014,

 

Thus the revenue for 6 months is actually closer to $30 million and they are profitable by about .045 cents!……if they would be reporting now, as they did in 2014

 

Also note, the huge interest expense paid every quarter for the purchase of QUES and BCS….imagine how great the bottom line will be as the debt goes down.

 

They say 2nd half will be even better, and that doesn’t include Canada deal

 

All in all, we are on the right horse!

 

Published: Aug 13, 2015 8:30 a.m. ET

 

Second Quarter Adjusted EBITDA of $1.1 Million, Cash Flow From Operations $1.6 Million, Positive as Expected and Growth Continues; Reaffirms Full-Year 2015 Revenue Guidance

 

HENDERSON, NV, Aug 13, 2015 (Marketwired via COMTEX) — Quest Solution, Inc, “The Company” (otcqb:QUES), today announced financial results for the second quarter and six months ended June 30, 2015 and reaffirmed full-year 2015 financial guidance.

 

Second Quarter and Subsequent Highlights

 

—  Second quarter net revenues of $13.6 million, up 82.4% compared to the

prior year.

—  Adjusted EBITDA of $1.1 million; positive as expected

—  Cash flow from operations of $1.6 million

—  Signed patent license agreement with NCR enabling “Smart Targeted

Advertising”

—  Signed agreement with Hyperion Partners to create and launched Quest

Total Solution as a Service (QTSaaS) concept

—  Expanded sales force into New York and Chicago

—  Expanded Board of Directors with the addition of W. Austin Lewis IV as

an independent director

 

 

 

 

Second Quarter Comparative Select Financial Results

 

For the Three Months Ended

—————————-

June 30,       June 30,

2015           2014

—————————-

Revenues, net                                  $  13,557,615  $   7,434,246

Gross profit                                   $   3,330,810  $   1,360,324

Gross profit margin                                 24.6%          18.3%

Interest expense                               $    (342,794) $        (400)

Net income (loss)                              $    (285,449) $    (262,305)

Earnings per share – basic                     $       (0.01) $       (0.01)

Earnings per share – diluted                   $       (0.01) $       (0.01)

Weighted average shares outstanding – basic       35,414,484     35,510,416

Weighted average shares outstanding – diluted     40,219,637     35,510,416

Net deferred revenue balance at 6/30/15        $     804,584  $           –

Accounts Receivable balance at 6/30/15         $  10,109,443  $   4,420,610

Adjusted EBITDA                                $   1,089,902  $    (253,391)

 

 

 

“As expected, we delivered positive Adjusted EBITDA for the second quarter and continue to expect additional improvement in this metric as we progress through the second half of the year,” commented Tom Miller, Quest Solution’s Chief Executive Officer. “As we extract synergies from recent business combinations and continue to shift of our business model towards more contracts that bundle services with our innovative hardware and software solutions, we expect our top and bottom line to continue to grow. Partnering and teaming with leading technology companies as we have is reducing our time to market with innovative, mobile and cloud-based solutions to drive quick returns on investment for our customers and further establish our recurring revenue model. Our recent win with a leading PVC piping component manufacturer is a perfect example of how our team’s ingenuity and deep understanding of this long-time customer’s business is expected to lead to a larger share of their technology spend. Working with this customer puts our solution to work in one of the country’s largest home supply retailers and expands our opportunities to leverage our knowledge and experience for additional growth.”

 

“To support the increasing number of opportunities in the marketplace we further expanded geographic coverage by adding sales teams in New York and Chicago over the last six months,” added Miller. “These are industry-leading technology experts with a with a proven record of success in selling solutions and building deep and wide customer relationships in our target markets We will continue to add and develop strategically placed salespeople who can sell bundled solution and service projects that help to support our near and long-term growth objectives and are expected to increase our base of recurring revenue.”

 

Scot Ross, Quest’s CFO, added, “Our solutions-based strategy is gaining momentum in the marketplace, increasing the portion of our business that represents recurring revenue. With an increased percentage of revenue under long term contracts, we are gaining greater visibility into expected future financial results and are thereby confirming our full-year 2015 revenue guidance today. As of June 30, 2015, our backlog of business to be delivered over the next 6 months stands at $ 4.6 million and the net deferred revenue balance was approximately $805,000, representing hardware and service net revenue under contract that is deferred to future periods and will be recognized when services are delivered. As a reminder, this is EBITDA for which we have received the cash and paid the expense and will recognize for accounting purposes over the life of the contracts.” Ross continued, “Additionally, our cash flow from operations was approximately $1.6 million, which is attributable to the integration efforts achieved during the quarter from the sales and operations team performance.

 

Second Quarter Financial Results

 

Revenue

 

Revenues for the three month period ended June 30, 2015 increased 82% to $13.6 million compared to $7.4 million for the three months ended June 30, 2014. This increase was due primarily to the acquisition of BCS in November 2014 and additional Quest organic sales activity sold in the second quarter of 2015. Second quarter net revenues of $13.6 million represented an increase of 27% over first quarter ending March 31, 2015.

 

Gross Margin

 

For the second quarter of 2015, gross profit margin was 24.6% of total revenues compared to 18.3% in the second quarter of 2014. The gross margin improvement was due primarily to the additional revenue generated from the BCS acquisition and the operational efficiencies achieved from the continued integration efforts of the combined companies.

 

Net Income (Loss)

 

Net GAAP accounting loss for the three month period ended June 30, 2015 was $285,449 compared to a net loss of $262,305 for the three months ended June 30, 2014.

 

Adjusted EBITDA

 

The company’s operating expenses during both quarters ended June 30, 2015 and 2014 included non-cash expenses including depreciation, amortization of acquisition intangibles and stock-based compensation for employee and director stock options. Without the effect of these non-cash expenses, Adjusted Earnings Before Interest, Taxes and Depreciation and Amortization (“Adjusted EBITDA”) for the quarter ended June 30, 2015 was approximately $1.09 million compared to negative Adjusted EBITDA of $253,000 for the quarter ended June 30, 2014. Please refer to the financial tables included below for a reconciliation of GAAP to non-GAAP financial results.

 

Year-to-Date Financial Results

 

Revenue

 

Net Revenues for the six month period ended June 30, 2015 increased 42% to $24.2 million compared to $17.1 million for the six months ended June 30, 2014. This increase was due primarily to the acquisition of BCS in November 2014. The unaudited pro-forma revenue of Quest and BCS for 2014 would have been $19.7 million, so in comparing the two companies year over year, there was an approximate 23% increase (or $4.8 million) due to organic growth of both companies.

 

Gross Margin

 

For the first six months of 2015, gross profit margin was 23.6% of total revenues compared to 19.6% in the first six months of 2014. The gross margin improvement was due primarily to increased sales from the BCS acquisition in November 2014, continued integration efforts and operational efficiencies achieved during the quarter and year to date.

 

Net Income (Loss)

 

Net accounting loss for the six month period ended June 30, 2015 was $708,000 compared to a net loss of $16,000 for the six months ended June 30, 2014. The decrease in net income is attributable to the increase in interest expense of $737,000, of which $400,000 is non-cash original issue discount classified as interest expense in accordance with GAAP.

 

Adjusted EBITDA

 

The company’s operating expenses during both six month periods ended June 30, 2015 and 2014 included non-cash expenses including depreciation, amortization of acquisition intangibles and stock-based compensation for employee and director stock options. Without the effect of these non-cash expenses, Adjusted Earnings Before Interest, Taxes and Depreciation and Amortization (“Adjusted EBITDA”) for the six months ended June 30, 2015 was approximately $1.1 million compared to Adjusted EBITDA of $26,000 for the six months ended June 30, 2014. Please refer to the financial tables included below for a reconciliation of GAAP to non-GAAP financial results.

 

Balance Sheet Summary

 

Net deferred revenue consists of prepaid third party hardware service agreements, software maintenance service contracts and the related costs and expenses recorded net of the revenue charged. As stated in the footnotes to the financials, the company had deferred revenue of $7.3 million and deferred costs of $6.5 million. This net deferred revenue of $805,000 at June 30, 2015 will be recognized in income over the term of the contracts, normally 1 – 5 years, with 3 years being the average term.

 

Backlog

 

The Company’s backlog of signed, contracted orders at June 30, 2015 was approximately $4.6 million. The backlog reflects orders expected to be delivered during 3rd and 4th quarters of 2015..

 

2015 Outlook

 

The company reiterated full-year 2015 financial guidance.

 

—  Revenue of $62-$68 million, representing top-line growth between 5-15%

—  Gross margin as a percentage of sales for the full year 2015 to

continue to show slight improvement as the company exits the year

—  Management anticipating generating positive Adjusted EBITDA in the

third and fourth quarter as well, with improvement each quarter for

the remainder of the year

—  The above excludes impact from Viascan acquisition which is expected

to close in the third quarter of 2015. Viascan is expected to

contribute incremental revenue of $22 – $25 million and be accretive

to Adjusted EBITDA.

 

 

About Quest Solution, Inc

 

Quest Solution, Inc. is a leading provider in the technology, software, and mobile data collection systems business. In November 2014, the Company announced that Bar Code Specialties, Inc. (BCS) joined with Quest Solution, Inc. The Company intends on continuing to acquire existing companies with revenues and positive cash flow.

 

Quest Solution, Inc. serves as a national mobility and data collection systems integrator with a focus on design, delivery, deployment and support of fully integrated mobile solutions. The Company takes a consultative approach by offering end to end solutions that include hardware, software, communications and full lifecycle management services. The highly tenured team of professionals simplifies the integration process and delivers proven problem solving solutions backed by numerous customer references.

 

The BCS acquisition and letter of intent with ViascanQData is in addition to the recently announced creation of a wholly-owned division focused on commercializing Intellectual Property, Patents and Distribution of industry-specific technologies in an array of new verticals. The new division will focus on the acquisition of existing intangibles, which we anticipate will provide immediate value to the company.

 

Information about Forward-Looking Statements

 

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995 Statements in this press release relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments, and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. This release contains “forward-looking statements” that include information relating to future events and future financial and operating performance. The words “may,” “would,” “will,” “expect,” “estimate,” “can,” “believe,” “potential” and similar expressions and variations thereof are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause these differences include, but are not limited to: fluctuations in demand for Quest Solution, Inc.’s products, the introduction of new products, the Company’s ability to maintain customer and strategic business relationships, the impact of competitive products and pricing, growth in targeted markets, the adequacy of the Company’s liquidity and financial strength to support its growth, and other information that may be detailed from time-to-time in Quest Solution Inc.’s filings with the United States Securities and Exchange Commission. Examples of such forward looking statements in this release include statements regarding growth in our parts and vehicle sales and increases in our ability to produce new products. For a more detailed description of the risk factors and uncertainties affecting Quest Solution, Inc. please refer to the Company’s recent Securities and Exchange Commission filings, which are available at http://www.sec.gov. Quest Solution, Inc. undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Financial Tables Follow

 

Quest Solution, Inc.

Consolidated Statements of Earnings

 

For the three months       For the six months

ending June 30,           ending June 30,

2015         2014         2015         2014

————————- ————————-

Revenues

Gross Sales            $13,731,186  $ 7,516,700  $24,443,202  $17,166,965

Less sales returns,

discounts & allowances   (173,571)     (82,454)    (209,617)    (110,559)

————————- ————————-

Total Revenues            13,557,615    7,434,246   24,233,585   17,056,406

 

Cost of goods sold

Cost of goods sold      10,226,805    5,726,660   18,508,170   13,013,983

Cost of goods sold,

related party                   –      347,262            –      694,523

————————- ————————-

Total costs of goods sold 10,226,805    6,073,922   18,508,170   13,708,506

 

Gross profit               3,330,810    1,360,324    5,725,415    3,347,900

 

Operating expenses

General and

administrative            795,076      255,538    1,807,520      500,693

Salary and employee

benefits                1,854,620    1,261,297    3,179,052    2,643,013

Depreciation and

amortization               20,368        2,928       45,864       10,822

Stock compensation         420,253        5,586      458,877       30,085

Professional fees          108,083      137,989      196,563      267,764

————————- ————————-

Total operating expenses   3,198,400    1,663,338    5,687,876    3,452,377

————————- ————————-

 

Income (loss) from

operations                  132,410     (303,014)      37,539     (104,477)

————————- ————————-

 

Other income (expenses):

Gain on debt settlement          –            –            –      151,949

Loss on license

settlement                      –            –            –      (93,578)

Loss on note receivable

settlement                      –            –            –      (18,995)

Taxes                      (64,322)           –      (64,209)           –

Interest expense          (342,794)        (400)    (738,066)      (1,000)

Other expenses             (38,093)           –      (38,485)           –

Other income                27,350       41,109       95,690       50,215

————————- ————————-

Total other income

(expenses)                 (417,859)      40,709     (745,070)      88,591

————————- ————————-

 

Net Income Before Income

Taxes                      (285,449)    (262,305)    (707,531)     (15,886)

 

(Provision) Benefit for

Income Taxes

Deferred                         –            –            –            –

Current                          –            –            –            –

 

Net income (loss)        $  (285,449) $  (262,305) $  (707,531) $   (15,886)

========================= =========================

 

Net income (loss) per

share – basic           $     (0.01) $     (0.01) $     (0.02) $     (0.00)

========================= =========================

Net income (loss) per

share – diluted         $     (0.01) $     (0.01) $     (0.02) $     (0.00)

========================= =========================

 

Weighted average number

of common shares

outstanding – basic      35,414,484   35,510,416   35,224,128   33,385,416

========================= =========================

Weighted average number

of common shares

outstanding – diluted    40,219,637   35,510,416   40,219,637   33,385,416

========================= =========================

 

 

 

Quest Solution, Inc.

Consolidated Balance Sheets

 

As of

June 30,    December 31,

2015          2014

—————————

ASSETS

Current assets

Cash                                           $    322,317  $    233,741

Accounts receivable, net of allowances of

$52,924 and $62,800, respectively               10,109,443     9,099,229

Inventory                                           383,350       606,231

Prepaids                                            669,887       191,498

Other current assets                                  1,450       377,060

—————————

Total current assets                           11,486,447    10,507,759

 

Fixed assets, net of accumulated depreciation

of $3,062,903 and $1,781,086, respectively         181,587       206,662

Deferred tax asset                                1,299,417     1,299,417

Goodwill                                         14,101,306    14,101,306

Trade name                                        2,700,000     2,700,000

Intangibles, net                                    568,067       466,870

Customer Relationships                            4,390,000     4,390,000

Other assets                                        641,749       317,304

—————————

Total assets                                     $ 35,368,573  $ 33,989,318

===========================

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities

Accounts payable and accrued liabilities       $  8,564,562  $  7,406,146

Accrued interest and liabilities, related party     278,770        51,806

Line of credit                                    1,718,128     1,819,345

Advances, related party                             400,000        50,000

Accrued payroll and sales tax                     1,661,789       917,079

Deferred revenue, net                               804,584       297,277

Current portion of note payable                     150,000       310,000

Notes payable, related parties, current portion   2,805,857     4,201,650

Other current liabilities                           403,608       548,425

—————————

Total current liabilities                      16,780,667    15,601,353

 

Long term liabilities

Note payable, related party, net of debt

discount                                        17,076,599    17,007,175

Deferred tax liability                                    –        29,783

Other long term liabilities                         307,822       157,495

—————————

Total liabilities                                  34,171,720    32,795,806

 

Stockholders’ equity (deficit)

Preferred stock; $0.001 par value; 25,000,000

shares authorized 500,000 and 500,000 shares

outstanding as of June 30, 2015 and December

31, 2014, respectively.                                500           500

Common stock; $0.001 par value; 100,000,000

shares authorized; 36,616,495 and 35,029,495

shares outstanding of June 30, 2015 and

December 31, 2014, respectively.                    36,616        35,029

Additional paid-in capital                       18,609,425    17,900,139

Accumulated (deficit)                           (17,449,688)  (16,742,156)

—————————

Total stockholders’ equity (deficit)            1,196,853     1,193,512

—————————

Total liabilities and stockholders’ equity       $ 35,368,573  $ 33,989,318

===========================

 

 

 

Quest Solution, Inc.

Unaudited

Reconciliation of GAAP Measures to Non-GAAP Measures

 

3 months ended

June 30, 2015

 

Net income (loss)                       $  (285,449)

===============

 

Stock based compensation and options      440,560

Deferred revenue net                      507,307

Interest expenses                         342,794

Tax                                        64,322

Depreciation                               20,368

—————

Adjusted EBITDA                         $  1,089,902

 

 

 

6 months ended

June 30, 2015

 

Net income (loss)                       $  (707,531)

===============

 

Stock based compensation and options      458,877

Deferred revenue net                      507,307

Interest expenses                         738,066

Tax                                        64,209

Depreciation                               45,864

—————

Adjusted EBITDA                         $  1,106,792