EYII.OB

[basonista]

If the options were reduced to $.08 then it doesn't make sense for the last two spikes to stall at .17 and .18.     And with $.08 options then they could cash them in anytime, right?

[starfire]

If the options were reduced to $.08 then it doesn't make sense for the last two spikes to stall at .17 and .18.     And with $.08 options then they could cash them in anytime, right?

If the option were at 19 cents, then conversion will not take place till 30 cents or so!!

[vic666]

starfire, could u please elaborate on what u mean by that ("options at 19 cents means conversion will not take place until 30 cents or so")

also, Ramsburg/Randolph...whats ur take on the form pre 14-A filed on the SEC's website today?

thanks.

[starfire]

when someone exercises options, it is with the intention that the option holder makes money. So if the stock is at 19cents and the option holder execises it, the option holder gets zero monies. All the monies goes to the company. on the other hand if the stock is at 30 cents and the option holder exercises it, out of every 30 cents, 11 cents (minus commission) goes to the option holder.

[gmarc66]

Starfire....so then that means that I shouldn't be worried because if the options are at .08 then they anticipate the stock going higher?

I'm holding at an average of .105...I don't want to be holding this stock for a long time if tomorrow the pps reacts negatively...I would rather get out for now and take a 20% loss, then have to sit on it for a long while...cant afford to do that...can't afford the loss either, but at least for the time being i could put the money to work for me elsewhere.

How do u think the stock price will react tomorrow to the Pre 14A?

thanks very much

julia

[vic666]

thanks for the reply...so whats ur take on the reduction in option conversion price...sounds like mgmt wants to get rid of all sellers abd option converters so they can start appreciating the pps??

[starfire]

shareholders will be anticipating dilution in the future and hence the PPS will have a downward pressure!! that's the normal tendency! But i will be waiting for the PRs and a possible mgmt explanation for the increae in A/S.

vic, the conversion price was reduced for the options held by Dori. I hope all the conversions are done! Otherwise we will be seeing more conversions as the price increases. this is a penny stock and essentially PPS does not stabilize on the high end but tends to stabilize on the low end!!! So the option holder liquidates as soon as an attractive price level is reached. Keep in mind these guys don't have a whole lot of capital, plus they have to pay rent for office Office/WH space in HK which I am presuming is quite expensive and they have to pay themselves too, something like $20K per month, the 3 of them, CEO, CFO & COO!!!!!

[David Randolph]

This is from the company's last 10-Q:

State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date: 167,803,292 shares of common stock
issued and outstanding as of August 19, 2005.»

So, they had 167,803,292 shares outstanding.

Now they say this:

«Our board of directors has fixed the close of business on October 10,
2005 as the record date for the determination of stockholders entitled
to notice of and to vote at the annual meeting.   At the record date,
there were 226,259,804 shares of our common stock issued, outstanding,
and entitled to vote at the annual meeting. Holders of common stock
are entitled to one vote at the annual meeting for each share of common
stock held of record at the record date.  There are no separate voting
groups or separate series of stock.  There is no cumulative voting in
the election of directors.»

So, between August 19th and October 20th there were 226,259,804-167,803,292=58,455,512 new shares issued and outstanding. The market cap rose 34.8% with the share price doing nothing.

This is a very plausible explanation to why the stock didn't rise, despite all the good news.

So, actually EYII.OB's market cap is 226,259,804*$0.088=$19,910,863 at current PPS.

Now they say the following:

«Our board of directors has determined that it would be in the best interests
of EYI to amend its Articles of Incorporation to increase the number of
authorized shares of common stock from 300,000,000 shares to 1,000,000,000
shares. Each additional share of common stock will have the same rights
and privileges as each share of currently authorized common stock. Our board
of directors believes it is in the best interests of EYI to increase the
number of authorized shares in order to give EYI greater flexibility in
financing its business operations, and to allow EYI to avoid holding further
stockholder meetings to increase its authorized capital to meet its
financing requirements.  The shares will be available for issuance by our
board of directors for proper corporate purposes, including but not
limited to, stock dividends, stock splits, acquisitions, financings
and compensation plans.  The issuance of additional shares of common
stock could have the effect of diluting earnings per share, voting power
and shareholdings of stockholders. It could also have the effect of making
it more difficult for a third party to acquire control of EYI. We anticipate
issuing additional shares of common stock in connection with future financings
of EYI.  We presently do not have any agreement or other arrangement for any
financing involving the issuance of shares of our common stock and there is
no assurance we will enter into any equity financing arrangement.  Current
stockholders do not have preemptive rights to subscribe for, purchase or
reserve any shares of the authorized capital stock of EYI.»

So, obviously they plan to sell more shares on the open market to finance themselves. Imagine if they issue the all 1 billion shares, what would the market cap then be at current PPS? It would be 1,000,000,000*$0.08=$80M. This is the worst case scenario and even with this market cap I find the company to be undervalued at this point. And off course, it will probably take some years for them to issue the all 1 billion shares, this is the worst case scenario in terms of financing needs.

We also have this, which is more bad news:

«During the year ended December 31, 2004, our board of directors
approved the re-pricing of: (i) options to purchase 3,200,000 shares
of our common stock granted in favor of Mr. Sargeant, our president
and chief executive officer, on April 30, 2004 at a price of $0.19;
and (ii) options to purchase 3,200,000 shares of our common stock
granted in favor of Mr. O'Neill, our president and chief executive
officer, on April 30, 2004 at a price of $0.19. The option price was
reduced to $0.08 per share in order that the exercise price was more
reflective of the then current trading price of our common stock and
in order to provide a continuing performance incentive. The 6,400,000
options were cancelled on December 27, 2004 and 3,200,000 options were
issued on December 27, 2004 to each of Mr. O'Neill and Mr. Sargeant to
replace their cancelled options. The new options have a $0.08 exercise
price and expire December 27, 2006.»

This tells me that at least they don't expect the PPS to be below $0.08. Or that maybe they want to make bigger profits when the expected rise starts.

I see some people selling on these apparently negative news. Let me rephrase that: these are negative news, but probably they are already pretty much discounted on the share price. This is why the stock didn't shot up 5 or 10 fold after the CEIEC deal. This is the worst case scenario disclosed and the only way is up from here, I believe.

So, I expect some selling because of this, but the stock to hold $0.06-$0.08 and then start a 5 fold rise from those levels, with not so great volume.

[GodisKing]

Hi David,

In your explanation, you mention 1 trillion shares, did you mean 1 billion.  You state that you think the company is still undervalued and believe the stock price could go up 5 fold more.  Initially you said you felt it could go up 5 fold or more in a weeks or so, do you still hold this view? 

Thanks

[fill_the_gap]

Many have sent me messages asking my opinion on EYII and the a/s count going to 1 billion.

I am not a basher and truly wanted EYII to prove the past wrong. 

The insiders have more than 51 % ownership, so the Billion Shares does not require any shareholder opinion.

I was excited about the fundamentals and was willing to stick it out with caution.  The news confirmed the reasons this company will have trouble being good for shareholders.

The news yesterday does not bode well for the future.  EYI does not have cash unless they strike the financing deals.  And what will prevent dumping all of the new shares and voting for another billion ?  Very difficult to reverse dilution.

Hopefully, you will all be rewarded.  This is only one opinion.  But history repeats in the market, so my thoughts are from much analysis with Cornell and MLM companies.

I liquidated all of my EYII shares for the following reasons:

-  Cornell Capital is known for toxic financing
-  Cornell makes money in various ways, they are a hedge fund and get the shares at a discount, thus any price they sell at is cash for them.  And Cornell also is paid 12% dividends for many of the deals.  Cornell can usually only have a certain % of a company at any given time.  So Cornell sells shares and then can get more.  Investors (including myself, cringe at the name).  They can make money is so many ways at the public expense.  They are in to make money and do not wait around for stock appreciation.  And as long as EYII balance sheet posts such losses, they will need the financing.  Especially with the new China expenses.

-  Go back and look at the charts of Cornell financed companies (dilution and reverse splits)
-  The Price does not have to appreciate for these people to cash in
-  EYII is a Nevada company
-  EYII is based out of Canada (no success in the past with this arrangement)
-  All of my attempts to call the CEO, etc. were referred to Agora (PR firm)
-  Many lawsuits come from weight loss pills and I have never heard of the products before this thread
-  The China deal is worth alot (if it works), but the terms are very loose; if the test does not go well, nobody will want it and CEICC only loses the exclusive rights.

-  The fears were confirmed that the pps did not rise because insiders and those paid for debt have been dumping shares on any increase.  This would be okay if it had an end in site.  But now the a/s are more than going to triple.

-  A company usually does not authorize shares without the intent to use them
-  Whomever gets their hands on the shares can at any time dilute the company
-  The market cap is immediately adjusted
-  If a 220 million dollar deal is not enough to move it up, people see the writing on the wall
-  I gave them a chance with 300 million authorized and will not make the same mistake with 1 Billion.
-  EYII was potentially bankrupt prior to the China deal.  But the deal has loose guarantees.
-  EYII is far from getting enough cash from the deal to eliminate financing (thus more future dillution)
-  The deal has money that will trickle in over many years.
-  And only a small amount goes to EYII.

The market knows Cornell, does not trust MLM companies and runs from dilution.  Period.

Do what you want as this is only one opinion.  But my experience with Cornell is playing out as expected.  Good luck.

[Rip]

fill_the_gap. You have made many valid points. But in my own personal experience I have recently seen a stock go from .9 cents to 5 cents when the company refinanced from a toxic convertible to a straight convertible. Once it became apparent that the company was heading for positive cash flow much better financing became available, the dilution stopped and before the financing was finalized the share price started rising rapidly. Assuming a base case of $21,000,000 per year in sales  and 30% margins for EYII it would seem that EYII would be cash flow positive, better financing would become available and the price will rocket.

Of course China is not the only girl in town. EYII has the best product in the world for table top water filters and a huge potential market since their water filters fit in the competition's water containers.

Further as you know an annuity is more valuable than a one time payment (unless the one time payment is huge). People have to keep buying the filters providing EYII with an annuity. By setting the options exercises price at 8 cents management has already told us that as a base case the price should be much higher. These guys want to make their fortune and will be motivated to get off of Cornell financing as soon as possible. They simply need to show that the sales are starting to come in. This is not guaranteed but likely IMHO.

[fill_the_gap]

Agreed.  The points make sense.  But the pps did not rise in accordance with HYRF and now we know why.

I will evaluate a purchase only if Cornell is out of the picture.  Fundamentals do not win when they are invloved.  It never makes sense with Cornell.  They make money regardless of the price.  Very complicated and shady behind the scenes.  Someone is getting the shares.

[David Randolph]

Come on, Cornell is involved with many OTCBB stocks, providing loans. I've seen many stocks which were financed by Cornell sky rocket.

To me this is the final washout and nothing surprising. Of course the company needed money to finance the purchases it has been making from HYRF. As I said, even in the worst case scenario that they issue all of the 1 billion shares, at this PPS the stock is still very undervalued.

I see today's developments as welcome, since they clarify the reason why the stock didn't rise with such good news. Now that everything stinky is out I think the stock will trade between $0.06 and $0.08 for some days and then start climbing to prices above $0.5.

I perfectly understand your selling reasons though.

[vic666]

david,

here's the IR no. in case u wanna talk. I talked with them yesterday and based on the response, decided to hold on...very forthright IMO.

heres the no:

604-759-5000

or try 604-759-5017, then hit zero twice, it'll take you to the operator...ask her for Jennifer and she'll connect you...feel free to leave voice mai and she returns them right away or very soon.

[Rip]

fill_the_gap. As soon as the first quarterly China order comes in the company will be cash flow positive on a quarterly basis, Cornell will be out and the price will rise.