3SOF

hi,
looks like it is going to fill soon,
based on my limited trading experience when i hear everyone get excited about the news i am a little wary of the next days action. sell the news seems to be pretty common.
but having said that , one days trading does not a company make.
thanks,
maxi

I'm out at $ 0,017. Almost day high. And I'm happy  nice 20%.

I will keep watching the EYII and maybe enter lower again.

Thanks to 3SOF, new donation is on the way 

Amarens

A little bit more on the deal

http://biz.yahoo.com/e/050927/eyii.ob8-k.html

This is without a doubt the strangest reaction to a $42M guaranteed contract I've ever seen.  I know the rule is to sell on news, but I've never seen this much selling on what should have been an awesome day.  Many rumors are flying around about many different things, but rather than repeat them (afterall, they are just rumors) I will simply say that I am sitting tight here, waiting for better days which are sure to come.  $42M contracts don't get ignored by the PPS for long.   

maybe someone more experienced might explain what is happening which seems to me to be contrary to my expectations....

I'm flummoxed as well.  After the first five minutes of trading, I was sure that the volume was going to take this thing over .19.  I can see a breakout and higher base, say .13-.15 fro a few days and then another push towards .19.  The weird thing to me is that HYRF holds a 20+% gain and EYII doesn't.  Same news, different companies...

Well, welcome to the market, tomorrow will be a different day.

details from SEC filling:
Form 8-K for EYI INDUSTRIES INC.

27-Sep-2005

Entry into Material Agreement, Financial Statements and Exhibits


Item 1.01 Entry into a Material Definitive Agreement

On September 23, 2005, Essentially Yours Industries (Hong Kong) Limited ("EYI HK"),a wholly owned subsidiary of EYI Industries, Inc. ("EYI") entered itno an agency agreement (the "Agency Agreement") with Guangzhou Zhongdian Enterprises (Group) Co. Ltd. ("GZE") and China Electronics Import and Export South China Corporation ("CEIEC").Pursuant to the terms of the Agency Agreement, EYI HK granted to CEIEC and its wholly owned subsidiary GZE, the exclusive right to distribute EYI's Code BlueTM water filtration systems (the "Water Filtration Systems") in China for a period of two years subject to, among other things, the following conditions:

(i) CEIEC purchasing a minimum of 4,000,000 Water Filtration Systems in each year commencing in 2006;

(ii) EYI HK issuing an exclusive agency certificate to CEIEC confirming the grant of agency rights;

(iii) EYI HK guaranteeing the safety of its products to be sold on the Chinese market and that the packaging specifications will meet the product safety standard and packaging standards as required in China;

(iv) CEIEC committing to the purchase of the amount of Water Filtration Systems outlined in the following purchase plan (the "Purchase Plan"):

Year 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total 2006 $700,000 $2,800,000 $14,000,000 $24,500,000 $42,000,000 2007 $31,500,000 $38,500,000 $45,500,000 $52,500,000 $168,000,000

(v) If, in any year CEIEC purchases fewer than 4,000,000 Water Filtration Systems in the Purchase Plan it will cease to have the exclusive agency rights to the Water Filtration Systems but continue to be non-exclusive agents of EYI HK;

(vi) If, in any year CEIEC purchases fewer than one-half of the Water Filtration Systems in the Purchase Plan, EYI HK may at its option adjust the price of the Water Filtration Systems supplied to CEIEC under the Purchase Plan; and

(vii) CEIEC agree to obtain all required regulatory approvals in China relating to the marketing and distribution of the Water Filtration Systems.

Pursuant to the terms of the Agency Agreement, CEIEC reserves the right, upon reasonable
notice to EYI HK, to increase, or decrease the number of Water Filtration System units that it purchases under the Purchase Plan, based on its evaluation of market demand in China, and agreed to commence purchases under the Purchase Plan in October 2005, and place subsequent purchase orders on a quarterly basis. The parties agreed that CEIEC may upon reasonable notice to EYI HK, assign its interest in the Agency Agreement to its nominee company, but remains a party to the agreement notwithstanding any such assignment.

The foregoing summary is qualified in its entirety by reference to the Agency Agreement and the September 26, 2005 press release announcing EYI's entry into the Agency Agreement which are filed as Exhibit 10.1 and Exhibit 99.1, respectively, to this Current Report.

Here is my theory:

Chief Executive Officer, Dennis L. Mast of HYRF is highlighted in an interview by Wall St.net:

http://biz.yahoo.com/iw/050920/095770.html

I listened to the interviewand he He mentions the $210 China contract several times as highly impacting their revenue growth.

Without saying it, The market is hearing that EYII is getting a small margin on this deal.

Just about the only plausible explanation I can come up with.

EYII needs to hit PR and talk about how much this contract means to Their revenues.

The market has figured it out.

4Milion units and 21 Million (minimums) for 2006.

That means $5.25 unit cost.  That is very very tight.  I don't think EYII's profit margin could be over 5% (China has high volume, low margin sales).

Are these figures correct?  Or close?  I don't understand how HYRF fits into this.  IS EYII just the middleman?  Makes sense that they would get a small slice of the pie with HYRF getting the real chunk of change (they're putting up the production costs etc).

My view of today's action on EYII.OB is as follows:

For years the company didn't sell enough to cover expenses. So what did the company do to pay its suppliers and employees? Issued stock options and warrants. People who were getting paid with options exercised those options and bought shares at prices below the market price, at the time, $0.11, $0.12 and $0.13. But suddenly shares collapsed and those people were losing money on their shares, so they didn't have a chance of getting paid. That's probably why every time the stock goes above $0.14 or $0.16 we get a lot of supply, from those people selling after a year or more of wait.

Check this information here:



The people with these shares don't care about the future prospects for the company. They just want to sell and receive their money. The good news is that this way investors are getting the change to buy a lot of EYII.OB at these bargain prices. Even better news for us that already own shares, is that supply is probably ending and soon, when suddenly we see no more heavy selling above $0.14, this stock will sky rocket !!!

Sometimes small stocks like EYII.OB have these inefficiencies, but they don't last long, over the medium term fundamentals reign supreme. And fundamentals for EYII.OB are awesome at this point, I believe everybody agrees on that.

Here's the chart, reminds me of AMEP's before it took off, probably AMEP had the same stock options problem ...

Quote from: ehos on September 27, 2005, 06:57:04 PM
The market has figured it out.

4Milion units and 21 Million (minimums) for 2006.

That means $5.25 unit cost.  That is very very tight.  I don't think EYII's profit margin could be over 5% (China has high volume, low margin sales).

Are these figures correct?  Or close?  I don't understand how HYRF fits into this.  IS EYII just the middleman?  Makes sense that they would get a small slice of the pie with HYRF getting the real chunk of change (they're putting up the production costs etc).

Hello ehos 

The contract signed between CEIEC and EYII clearly sets the price for each Code Blue (Filter+Pitcher):



It's $20. I guess HYRF.OB rises a lot because the company has no history of issuing shares, warrants and options to pay for expenses as EYII.OB did. EYII.OB stock is paying the price of its past over the short term, but in the end fundamentals wil be reflected on the stock price.

Good luck 

David,

I'm confused.

HYRF manuacturers the filter and EYII is the distributor.

http://biz.yahoo.com/iw/050927/096389.html

The contract specifies what the Chinese distributor will pay for the product, but what I don't see what EYII is paying HYRF for the product.

Ehos, in answer to your question, EYII is a Distributor of the product - This meaning they have set territories or areas they market the product to.


This is a standard distribution procedure for many products without the manpower, cash or desire to sell direct.

David, thank you so much for your analysis.  May I ask where you find such information on executed options?  That would have been very comforting to see that intraday as my nice little nest egg plummetted to earth in a violent fashion.  With 22M shares possible to sell via these options, as you said, there can't be many left.  Perhaps the stock is finally ready to run over the next few days?   

David,
I believe the Filter and the Pitcher are both capable of filtering the water! They are two independent products. here is an excerpt of their website:
"The Code Blue | Pitcher and Filter Units are residential units for any household. 'MARTI Plus' media is placed in each of these systems and is used to help filter tap water of harmful contaminants, but unlike its competitors, the Code Blue filters remove arsenic from tap water."

Note, in the above paragraph the phrase, ".....'MARTI Plus' media is placed in each of these systems and is used to help filter tap water of harmful contaminants,.....".

So the contract stipulates 30M Filter Units for $7 a piece and the total value of the contract is $210M. That's my understanding but I could be wrong!! The pitcher is $13.

Anyways, I see the opportunity in China as tremendous because the contract include related products and in the future could include Code Blue ToGo.

David, just ignore my previous comment.

The code Blue Filter system comprises the following

The Pitcher , $13 and
The Filter, $7.

The recently signed contract stipulates just the Filter! So we should be expecting another contract or addendum to the current contract to include Pitchers as well. If the Pitchers are included, then the contract value increases substantially!!