Two highlights this month. We made real progress on the ticker symbol front, and we successfully raised the first chunk of money in our debt offering.
The one big disappointment this month … after early success with our debt offering, we didn’t make any real further progress.
Marketing – Member Growth
We continue to be very cautious in our marketing expenditures, which directly translates into slower member growth. Given that our capital raise fell short of our goal, we’re saving our marketing money for when our ticker symbol is issued.
We’re continuing to refine our member acquisition targeting, so that the members we do attract are more likely to be profitable, sooner.
The best recruitment comes from our members. You have the opportunity to help the company you own become bigger, better, more profitable, and more valuable. As we’re able to demonstrate our enterprise value better (think ticker symbol), we expect to get even better at recruitment.
Revenue & Gross Profit
I repeat my mantra – I believe the best number to watch for iConsumer is our cash gross profit (also sometimes called cash gross margin). Since we haven’t yet published our third quarter financial results, I’m not going to be too specific. We continue to work on improving our numbers, both on a per member basis, and in the total number of members who are generating gross profit for us.
We continue to say that the magic number of members is about 250,000. At that point, our cash gross profit should exceed our costs of operation, which means we’ll have a positive cash flow (also called nirvana).
I use the term cash gross profit to highlight the difference between that number and our accounting rules dictated “gross profit”. Our gross profit (as shown in our financial reports) includes the cost of the equity (shares of stock) that our members receive for joining, shopping, and referring. Because that cost is a “non-cash” expense, it distorts our financial reports. To understand our ability to pay our bills, we need to focus on cash, and ignore the amount of stock we issue.
The are reasons to understand the affect of our stock issuances on financial health, but focusing on cash at this stage of our growth is vital.
Financing & Regulatory Compliance
FINRA – the road to a ticker symbol
A big sigh of relief. Yesterday, we learned that our broker dealer had submitted our documentation (now grown to 10,000 pages) to FINRA. This road has been far slower than we ever expected.
To recap. FINRA is the regulator that, when happy, will issue our ticker symbol. Once we have that ticker symbol, we intend to be quoted on the OTC QB market. With that, you’ll be able to type our symbol into Google and learn the price at which people are offering to buy and sell our stock.
We’ll have a whole new set of issues and challenges when that begins. I can’t wait!
The first thing to understand is that just because we have a symbol, there may not be anybody who wants to buy our stock. And even if they do, there are still going to be some hurdles for shareholders to overcome to make it easily possible, not just possible. As we get closer to that day, we’ll have more to say.
At this point, we’re waiting for FINRA to respond with their further comments on the filing. FINRA has no obligation to even respond, or respond in a timely manner. However, so far they’ve been taking about three weeks to issue their comments. And, it is possible, but not likely, that our filing has answered all of their questions and comments, and the next time we hear from them is when they issue the ticker symbol.
If that happens, you may be able to hear my shouts of joy from miles and miles away.
We launched a Regulation D 506(c) convertible debt offering aimed at accredited investors in August on Crowdfunder. We were looking to raise $1,000,000. We’ve actually received about $180,000 of that amount at this point. We are taking additional steps to finish the raise, but if we are successful, it’s going to take longer that we had hoped.
This mainly reduces the cash available to spend on marketing.
No new filings this month, other than the reporting that is necessary to document the Reg. D raise mentioned above.
As always, you can see our latest SEC filings here.
Member’s Stock Issuance Delay Continues
Until we have an open, qualified offering, we can’t actually issue and transfer our members’ stock. Please see this article for more on that.
We’re working to have an open, qualified offering as soon after FINRA has issued us a ticker symbol as is possible. Once the symbol is issued, we’ll submit a new offering to SEC. They’ll need to qualify it, and at that point, we’ll be able to issue and transfer stock. We believe that the SEC process will take less than a month, but there are no guarantees.