Member Info for Fountains

This is healthy. The stock is up 36% over 5 days, 50% the last month, almost 200% so far in 2023. It can't always be rising and this has been a good recovery for a company that was close to death a year ago. I personally am optimistic over the longer term. The company has lots of cash plus a product that is in a hot category and a much wider play with their chill.com marketplace. All of that is going to take time to build into revenue and results so whether we're 20% up or 50% down, I'm happy to sit tight.

He doesn't have his shares yet.

From the RNS: (1) a Subscription for 25,000,000 new ordinary shares of 1 pence each ("Ordinary Shares") at a price of 4 pence per Ordinary Share for a total of £1,000,000 (the "New Shares") to be admitted from 15 May 2023; and

(2) the issue by the Company of convertible unsecured loan notes ("Convertible Loan Notes") with a value of £1.6 million. The Convertible Loan Notes carry a coupon of 12% per annum for a term of three years from the date of issue on 3 April 2023, and will be convertible into Ordinary Shares at 8 pence per Ordinary Share.

Very optimistic about this company. The CEO has raised good money at a difficult time and now has a solid runway. I also believe that over the long run the Chill.com marketplace and these vapes will perform very well. We should be cautious about getting to a pound though after the last time. Once the prospectus is out that target would be a huge MCAP. We've got to be realistic after essentially starting from scratch in 2022.

This feels like a healthy pullback as happens a lot after a run of positive news/excitement. It's now down to the company delivering and growing, which will take longer. Hopefully, we'll see some traction on vapes and other things soon. Another investor I speak to regularly introduced a brand to Callum and has since said they were very positive about joining the site so obviously things are happening.

Very happy with last night's review by Callum. I would say only that he did not say we would be in profit he talked about aiming to be cash flow positive so I'm not expecting a remarkable profit figure. We'll probably keep seeing the steady growth that we have for the last few months and I for one am more than happy with that in this economic market .

Well that is a huge vote of confidence. Those loan notes are a 4x premium to last year's fundraise. This isn't happening elsewhere in this market. Hats off to Callum.

I'm pretty certain that Callum mentioned a returning customer figure around that 40% on a podcast. If so that is very good indeed but will require them to increase site traffic and conversions to have a meaningful impact on the money they can generate. Clearly that is another thing that they are working on through SEO/ marketing/ other means. I expect the marketplace concept will help with this and the new brands from this week look very well put together.

Damned if you do and damned if you don't by that logic.

If CHLL didn't raise any money they'd be criticised for having a shoddy balance sheet and no runway. The shorts would continue to shout 'death spiral' 'bailout placing' 'going bust'.

Then when they do raise money with minimal discount they get criticised for that too. In this market 12.5% is not a bad deal. Now those p***ing into the tent shout 'letting the city in on the cheap' 'mates rates' 'tree shake'.

And then if the markets turned and they found themselves unable to raise money, we'd be right back to square one with 'going bust' except without the possibility of a bailout. So better they get on with it and get themselves secure while things are looking bright.

The most facile claim of all is that a company is doing something 'before news' as if it's some kind of clever trickery. There is ALWAYS news on the way at varying intervals. I say crack on CHLL. Vapes and more to come. Anyone waving their fist at this is missing the point.

Vascular, if that is to be believed, you must be the only person on LSE who does not contribute to the boards of companies while they actually own their shares. If so, fair play to you.

Curious still though, what brand of nicotine free vapes are on offer in the Indian fishing village?

I'd say fairly obvious he's been pushed. His payout is settlement/severance that the company won't have wanted to give but the alternative was very likely to fight it out in court at an increased cost to potentially pay the same amount anyway. Poor form on the raise but they may not have had other readily available options in this market.

Vascular, what brand of nicotine free vapes is on offer in the Indian fishing village?

As far as I am aware, there is no dominating force in the nicotine vape market either in the UK or the US. The same view was reflected to me by a friend who runs a logistics and distribution company that deals primarily in alcohol but obviously sees great category overlap of the products and the stores they visit.

It is all about brand. Elf Bar being the UK leader in nicotine vapes that has very recently lost a big chunk of its market share due to legal and compliance issues which have tarnished their brand. Despite the past Chill's brand is still extremely good and is arguably miles better than when it was focused on rodeo. Price will of course be an element but there is much more to it than that.

Being fair to them the product only came into being in December and we know that Eric Schrader has already been out on the road with retail buyers introducing the vapes. I take that as it has 'launched'. They have them and are taking steps to get them sold.

Yes, it’s very important for there to be balance. We’ve got to live in the real world - it’s a company not a fairytale. But also, I’m not sure slow and steady is the right term. They’ve developed a totally new product and we’re now on a completely different path, in less than a YEAR. Again I say if the progress of the last 10 months or so had been made as a new company, without encumbrance from the trouble before, we’d be ecstatic.

Looks like the teaser posts were on the Chill US Instagram so at a guess I'd say we'll see the brand reveal late afternoon/evening UK time and then get an RNS tomorrow. I hope so anyway.

Let's not forget why this renewed optimism isn't misplaced. In April 2022 a switched on 26 year old took the burning embers of a company in an industry that was failing (look at all CBD companies, see what's happened to them. It isn't and has never been "just Chill").

With less money and less excitement/sentiment he's cut their costs and believed in the guys who were there before enough to build bridges. They've cleaned up all sorts of messes by the look of the reports. But to boot he's also rebranded the whole thing, taken a hard look at their sales strategies, developed a whole new line of vapes, put the site on course to make money as a marketplace and started negotiating with other brands etc.

Look it's not perfect. It's rough around the edges but companies at this stage of growth are. BUT if this had started from nothing in April 2022 we'd be shouting from the rooftops about what's been achieved during stagflation/bear market/winter misery.

Say what you like but colour me impressed.

As the old saying goes, every trade you see is the result of someone buying and someone else selling. They both think that they are prudent to do so. The market is a game of opinions.

I think what we're seeing here with Chill is months of hard work and anticipated changes that hadn't been priced in when they were announced. This time a year ago we were a niche CBD company that was running out of ideas, now we're releasing a line of vapes into a huge growing market, and we're developing a marketplace online sales hub for other brands.

I'm not saying it'll always be plain sailing but Chill looks a lot more sensible and scaleable than it has done for a long time.

St.Ives I share your concern for the sector. I am skeptical of the RTO/merger concept that will double down on CBD without much differentiation. From what I can see, there's really not much that separates Cannaray products from any other CBD products on the market, notwithstanding a visible ad campaign.

I still have a small holding here, but a larger holder in Chill (CHLL) who are also in the CBD space. They've also had a very dramatic decline during late 2021 and through 2022 that led to them changing their CEO who by all accounts has been doing some heavy lifting to sort things out. He's been pretty clear in explaining that brands shouldn't be built only around one ingredient. They're still in CBD, but not JUST CBD. It has made me much more confident in a long-term stake there.

Put it this way, Nivea and L'Oréal don't build their whole business around a single ingredient. Neither should these guys.

I was most interested in their cash position and burn rate.

They spent £1,249,219 during the six months. They tell us a few times in the report about this including that. “While this loss is reflective of cash costs including those attributable to substantial legacy legal fees” and that they’ve taken “steps to substantially reduce costs… from the discontinuation of certain prior activities and the cancellation of numerous consultancy agreements, the benefit of which will largely occur during the second half of the year.”

There are also some things they don’t refer to that I guess would have increased their spending. The application process for synthetic nicotine TFN products, the legal and admin costs of the fundraises, the redevelopment of Chill.com. Not recurring monthly costs to keep forking out on.

Finally they tell us that they are “seeking to recover slotting fees for stores that were not effectively activated during previous reporting periods” and expect to receive a balancing payment from Ox Distributing in 2023.

So all in all I think we can expect the spending to now be more under control and for them to have cash flow from Ox and reclaiming slotting fees if not yet from sales.

Vas that is not a true representation of the situation. Read the wording of the report. “Actual sales of Chill branded products to retailers and consumers significantly exceeded this level, however the Company's entire inventory of CBD chew pouches and combustible smokes had already been sold to Ox, its former Master Distributor. This meant that sales of CBD pouches and combustible smoke products made during the Period could not be recognised as additional revenue”.

Ox repaid the company $250k during the 6 months so reading between the lines I’d guess real sales of the product were closer to that figure - they pay Chill back as they sell it.

Seems the space itself has struggled. CBX put out their full year last week with total revenue of 28k for 12 months, and it’s not like they had something like the Ox arrangement going on the background! I’m just glad we’re diversifying a bit with the nicotine free vapes and Chill.com marketplace as CBD is obviously a very tough market.

We can now see what a mess Callum and co have been cleaning up. Employment legal cases, an FRC review of last year’s interims, the Ox agreement. They’ve even had to build a sales team which you would have hoped they had before.

?Anyway, it is what it is. I’m interested to see where the vapes and selling other branded products can take us. The business is probably stronger now than when we all thought it was a beast in 2021.

ARGO is nothing if not an excellent trading opportunity. At this stage it's basically just a derivative of the BTC price but it's good to see it still alive and kicking.