EFSF Interview With Respond2: Your Comments

I am posting this BLOG at about 9AM Pacific, Thursday morning. The chart below is hinting at some signs of life for EFSF. By the time you read this, I’m sure it will be later, so I don’t know how the chart will look then.

Here’s the chart:

efsf1.gif

As you can see, the stock hasn’t been much fun to own for the past year. However, the chart is showing signs of life. The Gap at $.18 from early 2007 has been filled, which is a technical positive, and the stock is trying to break out above a very long term downtrend line.

While the technical picture is finally improving slightly, the real purpose of today’s BLOG is to give you the opportunity to comment on the interview with the Tim O’Leary, the CEO of Respond2.

Here’s what I’d like to know. 1. Did you find the commentary valuable? 2. Do you feel Respond2 is the answer to the sales side of the equation for this company?, and 3. Has hearing the interview changed your viewpoint on the future of EFSF.

Of course, comments and questions on any other EFSF related issues are welcome. Remember, you comment won’t appear until I respond and post it to the site. Check back the next day.

30 thoughts on “EFSF Interview With Respond2: Your Comments

  1. 1) Yes 2) Remains to be seen, but it shows initiative and effort. 3) No, only because past actions speak loudly for the stock price. However, if the company surprises with any, ANY traction on sales, this stock will go to a dollar faster than anyone imagined. Not because it belongs there, but because, from what I read on the boards (using them as sentiment gauges) people are emotionally invested in this stock. Specifically, those that got fed up and threw in the towel will jump right back on in order not to be left behind along with new money that inevitably chases the stock, forcing it higher. My sense is a whopping trading opportunity may be presented around the third week in March through the first week of April. I will be very interested in the volume. No volume, no play. Thanks for the blog.

    Editor: Good observation about the psychological component. This stock does have an emotional following, and those same folks who got emotionally out will get emotionally back in if the numbers are coming through. When people can turn on their tv and see the spots, the concept will become very tangible.

  2. For one thing, I would like to ask YOU those same three questions you’re posing.

    Thanks in advance.

    Editor: 1. I thought it was very valuable information for investors. What will be even more valuable is results. However, for shareholders I believe it is very valuable to know that the company is making a big change and turning over the arena of its biggest failing over to a real pro. 2. I believe Respond2 will move the company in the right direction. I can’t say to what level, but it is going to get better. Remember, what EFSF spends on media, they make back on margin. They don’t have to discount the products. 3. My viewpoint had already changed since I had a pretty good idea about what was happening over a month ago. Hence, my technical buy recommendation when the stock hit the $.17 to $.18 level and filled last year’s gap.†

  3. Respond 2 interview did not give a time table for Pure Effect. Shouldn’t we have a product release by this month?

    Editor: Respond2 is not involved with Pure Effect other than they are going to help with media buys when the time comes. There has been so much disappointment with delays on Pure Effect, the company won’t make any claims about when it is finally going to launch. However, there is a good chance it will be pretty soon.†

  4. What about Pureffect? No commentary on that whatsoever! Do you have any updates on that?

    Editor: Respond2 is not involved with Pure Effect other than to help with media buys when the time comes. It’s in the hands of CK41, and EFSF is reluctant to say anything until its really happening as this has been a sore spot. I am informed we are very close, but I’m not talking about it until it actually happens.†

  5. I know this DRTV industry and I know who Tim O’leary is. He has had some great successes, but lots of DRTV fails, ask him for that ratio and request the “no DRTV BS” version. Respond2 is very expensive to hire. There are no guarantees in DRTV but you have the advantage of seeing what is live, what is dead, and what can be revived or massaged to profit.
    Why it has taken this long to get this far is a mystery that EFSF needs to come forward on and clarify what, where, when and how they screwed up. They have missed 6 months of good potential marketing time and this being an Olympic year and an election year TV rates go up, spot time gets scarce as it bought up for political ads etc. If the DRTV fails to be anythign but great or a “home run” as they like to call it, this stock will be overvalued even at these low prices. I bought in due to the glow of a potentil integrated marketing push with DRTV and retail…I bailed when the DRTV didn’t happen and there were no good answers.

    Editor: Well, I guess you have to bet DRTV works, and Respond2 is the right guys. Nice to hear they have had some big successes, and I’m sure they have had losers. As far as expensive- I don’t agree with that statement. I should have covered this. Respond2 is an advertising agency. They don’t charge much in the way of upfront fees. They charge a markup for the media they buy. They do the content as part of the service. The company has to pay for the media, but makes the money back because they don’t have to sell the product at a 50% discount like they would with a retailer. The better the products sell, the more media Respond2 gets to mark up, so they have incentives to do a good job. I can tell from the tone of your comment that you are frustrated with the time it has taken to get this together. I don’t blame you. The determination to move in this direction was made at the end of last year, so it really hasn’t been that long to this point. Here’s what I’m certain of- it’s going to get better from here- the question is to what extent? We’ll see. Based on historical price, seems like a pretty interesting speculation from here. Thanks for your contribution. I believe investors should hear all points of view.

  6. I believe they’ve finally turned the corner, on their way to profitability. Repond2 sounds they will be the catalyst that finally puts the stock price back up above these rediculous levels we seem to be stuck at lately. I believe that we should breakout from these levels soon. If it doesn’t pop to big tommarrow I will jump in for a few more shares here. Hopefully we will here more on the purrfect soon.

    Editor: I’m in your camp. Here’s what I know- as soon as this new media campaign gets rolling, sales will go up. It’s just hard to predict to what extent. If the audience is receptive, this could end up being the answer for the company. Any way you look at it, it’s likely to get better from here.†

  7. I found the commentary valuable. I got a basic time table of launch and the game plan behind the launch. I feel that Respond2 is a big piece of the puzzle for the introduction of EFoodSafety’s products into the market. I’m glad to hear about a “halo effect” that can help drive these products to the retail market place. I’m also glad to hear of strong clinical trials and testimonials. This interview has given me renewed confidence in the company. My hope is that some, if not all, the products “stick” and satisfy the public.

    Editor: You and I are in agreement- the company’s performance is now going to get better. It’s just a question of to what extent. I would be very happy with $1 million in revs monthly ongoing. That would make the company financially very healthy, and open up a lot of options. We’ll have to see what happens.†

  8. I think the interview you did was informative. It helps support some of the claims the company made in terms of clinical studies. I am glad that you specifically asked about that he felt what they had for support was good, because i know that is important to them.

    It is also good to hear about the timeframe of a direct response campaign. I know people will be upset to learn that in some cases it takes a year to get things right, but based on them having testimonials and clinical studies hopefully it does not take that long.

    I believe this is the only way for the company to go right now. They would need to raise a lot of money to really go at it through retail sales or other methods on their own and they do not have the cash. To raise equity right now would cost them way to much and further destroy shareholder value.

    I don’t know if my viewpoint has changed ont he company. Being a shareholder for over 2 years now, we are still in the same boat except with another method in play to get us upstream. 2007 strategy was a disaster, now we are in 2008 with a new one. My opinion is this is going to make or break the company. This will be my last year as a shareholder if sales do not materialize. Hopefully i can get out if that is the case before this is worth zero.

    Thanks for your hard work in at least getting us some information that we would never see like this from the company.

    Editor: You are quite welcome, and glad you found it valuable. I am convinced there is no question sales will improve from here. If it’s a home run, we’ll all be happy. If it’s anemic and they have to go back to the drawing board, it will be disappointing. Nevertheless, clearly a step in the right direction. I agree with you- this is the make or break move for the company with its ready for market products. However, even if this doesn’t work out, there’s always a shot with some of the wild card products- if Dupont picks up Oraphtye, that would be a whole new story. At any rate, things will improve from here.†

  9. It will be a pleasant change to see something being advertised actively. We shop Wal-Mart quite regularly and I have yet to find Cinnergen on their shelves. Could be that I’m looking in the wrong section perhaps, so that is something they need to let people know ! The long term weekly chart shows a great pattern and long term – 4yr. support which has been tested but not broken – around the $0.165 mark. Initial target after break out could be around $0.40 within a year perhaps.

    Editor: That scenario would not break my heart. †

  10. I’ll listen to and comment on the interview later, but right now I have a different question for you. I haven’t been following EFSF long enough to know whether or not they hold annual shareholder meetings. If they do, when was the last one? And do you know approximately when the next one should be? If they do not, please ask them why not. Aren’t all reporting companies required by SEC regulation to do so?

    Editor: All pub cos have AGMs – I don’t know when they have their’s, and I’m not really sure why it matters. You could call the company directly on that one. I’ve never been to an AGM that had any meaning- it’s just a rubber stamp. They always say great stuff, and then you just hope. They aren’t allowed to give out any information that isn’t already available to the public, so not much to learn. If you want to gripe, just call or email the CEO.†

  11. I liked what I heard. I believe Respond2 has the right approach to selling product. The company knows immediately if the advertising is working. It convinced me that I will not sell my shares now, but will add to them as I think we will see a increase in their sales.

    Editor: We will be getting some commercial schedules next week so people can tune in and watch what they’re putting out there. I’m not sure when we’ll get sales figures, but I hope they update us regularly. I will be lobbying the company for it.†

  12. I was very impressed with Respond2′s interview. They appear to have very good skills at marketing EFSF”s type of products. They went in depth on the strategy of their marketing and what skills will be sucessful. They have a proven track record. What is even more impressive is that the video and editing will be completed very soon and will hit the air by the end of March or very early April. I feel EFSF is in far better shape than a year ago and is selling at 1/2 the price. A BARGAIN for a stock that is moving quickly toward profitability.

    Editor: Looking at the trading range of the stock, and knowing things are going to improve to some extent, makes it an easy speculative buy from here. If the campaigns are highly successful, this should work out very well.†

  13. Just listened to the interview. I found it very positive, mainly because Mr. O’Leary was able to cite some products for which I have seen the advertisement. So yes, the commentary was valuable. Is Respond 2 the answer — it may very well be. I feel good about what they will do. As for results, time will tell. And yes, my viewpoint has changed; it is more hopeful. Learning about past success for Respond 2 and learning that they are still a growing company even in this current market says a lot.

    Editor: Thanks very much for your contribution.†

  14. Thank you so much for the Respond2 interview. We investors have been waiting a long time for any detail information.
    I hope to see an upward movement as products are released and commercials begin. I do think it may be several months before any major movement given we may still need the financials reported. Your opinion is welcomed and thanks for sticking with Efood this year.

    Editor: I’m very glad you found the information useful. You view on how it might effect the stock price could end up being spot on. The market is probably from Missouri- the “Show Me” state on this one before it is really ready to bid up the price- especially against a backdrop of a bear market. I know there will be improvement- it’s just a question of how much and how soon. Time will tell. Thanks for your contribution.†

  15. Barring any unforeseen catastrophe, I would say we have finally hit bottom on this stock. I just can’t see, with all that is poised to happen, this stock trending below .18 again. Agree?

    Editor: If we weren’t in such a bear market I would totally agree. However, in a market this nasty, you never know. I did call the stock a technical buy when it headed down to $.17 and filled the early ’07 gap. However, I am quite certain sales will improve markedly at the company- it’s just a question of how much and how fast. Time will tell. Thanks for your contribution.

  16. Wholeheartedly disagree with Lewis that the stock could hit $1 solely based on sentiment. If it does, in part as a result of sales traction, then I would vehemently say it DOES in fact belong there. And much, much higher, should any of what you’ve been calling “wild cards” come to any sort of fruition. That’s what makes this stock so exciting. It CAN really be something very big and very real — beyond hype and such sentiment-driven euphoria.

    Editor: I agree that $1 would be a pretty tall order. As of the last SEC filing, there are 165 million I&O, which suggests at $1 the stock could have a $165 million market cap. That would be a real stretch without some real progress on one of the wild card products. We can only hope. †

  17. I recognize you’d prefer not to delve much into Pureffect, as it has been basically a complete debacle at this point. And the company is clearly gunshy about communicating info. But, can I inquire about your opinion about CK? You’ve presented a very good overview of Respond’s competence – like to know your impressions, however minimal, of CK?

    Thanks.

    Editor: I don’t have a valid or informed point of view on CK41 having never met or talked to anyone associated with the company. I am very disappointed they have not performed, but it’s never too late. I have seem some still shots of the stars from the infomercials, and it looks pretty much like any of the others I’ve seen. I hope this program gets started soon as if it rolls out in conjunction with the Respond2 campaign, it could help get momentum into the stock.† If they are going to get started, perhaps an interview with the CEO of CK41 would be useful.

  18. here’s what I’d like t know. What’s the company doing right now? We all know the EFSF is a very small company. (4 person operation was the story for a while – not sure if that’s still the case.) How are they allocating their time right now as far as you know? What i mean is, they have SO many irons on the fire, where are they focusing the balance of their efforts? Or, how are they distributing their man-power? If we assume that the big three products are now in the hands of Respond, and then Pureffect is in the hands of CK, what is the company focusing their time on? I think they need to hire some series PR experts. They should be at every trade show and conference they can, for example. There are so many areas where they can be focusing. Also, how close are they in staying in the touch with the universities who are testing Oraphyte? Any insights you have (or can even hypothesize) would be very much appreciated. As an investor, this is key for me – understanding that they are constantly tending to multiple areas to help push success simultaneously. I hope they are not just resting on their laurels awaiting the marketing launches. Thanks for your thoughts.

    Editor: As regards your specific questions, I don’t know what they focus on daily, but I do know they are very focused on the current University studies on Oraphyte. They have also recently been at conference is Asia, where Citroxin got some recognition for its potential to fight Bird Flu. As I have said, there’s nothing wrong with this company that $1 million in monthly sales won’t fix. Let’s hope they get there quickly.†

  19. Hello and thanks for the interview.

    1. Yes, I found the commentary very valuable. What it does is, it finally gives another voice – theoretically, an expert – speaking on behalf of the company. To this point, the company’s press releases have been vague, redundant, non-committal, lacking key information, and elusive. I think shareholders have been starved to hear some sort of steady, confident voice speaking on behalf of the company (beyond the obvious hype of the Konlin newsletter). There was a certain comfort in hearing the strategy and game plan.

    2. Yes, I feel like respond2 is exactly what the company needs – the incredibly frustrating thing is what took these people so long to identify this? It’s frightening, really, when you think about the naivete of the company. Better late than never I suppose.

    3. Yes, the interview has made me CAUTIOUSLY (emphasis on CAUTIOUSLY) optimistic that there is some hope for the company to turn things around. My patience has just been tested beyond belief…and I have no slack left to give them if this fails. Frankly, I’m out if it’s not looking good by mid-summer. Too much time invested (not to mention money).

    Editor: Thanks very much for your contribution. I believe your thoughts echo the sentiments of many investors. I am optimistic at this point in time as I am convinced the top line will really improve. It’s just a question of how much. We’ll see.†

  20. If you’re posing the idea of an interview with CK, I think that would be fantastic and much appreciated by the shareholders! Building upon the great interview you just conducting with Respond. Why not?

    Editor: I wouldn’t bother with it until there is a firm launch schedule. Until then, it’s just a waste of everyone’s time. If we get the announcement, I’ll move forward and propose it to the company.†

  21. The one thing you didn’t touch on was cost structures here between Respond2 and EFSF? What is th revenue sharing agreements? Lots of cost involved in this and how much do they have to sell just to make the money back on the airtime?

    Editor: Glad you asked that question. Here’s how it is structured: EFSF puts up no upfront money beyond the media buys. Respond2, as the advertising agency, marks up the cost of media. Respond2 provides production costs and all other costs associated. It’s a good relationship, because Respond2 knows that the better the products do, the more media EFSF will buy. VS selling through retailers, it is also a good deal for EFSF because there is no wholesale price. Anotherwords, if Cinnergen sells for $30 at RiteAid, EFSF gets $15. If Cinnergen sells direct for $30, EFSF gets $30, and pays for the media. It’s simply a case of the media not costing more than the gross profit. Then, the media buys can be ramped up rapidly where they are getting results, which are literally measurable minute by minute. It’s a good thing we touched on this issue because it’s important, so thanks for the question.

  22. Can you tell us anything about marketing plans for the ImmuneBar?

    Editor: I believe the Immune Bar is going to be sold directly through retail chains. I suspect we will be hearing something about that in short order.†

  23. Decent interview w/Respond2, at least we know the time launch. Have been a believer in this company for 3 years and at a 27 % loss but have bought 6 cases of the IBoost bars, good stuff! plan to buy more. Being involved with agriculture, I am patiently waiting for the university results on Oraphyte. Oraphyte which has been accepted by the USDA and Dupont as being effective could take off to help boost crop outputs. I think that EFSF will do very well once others see the products and future potential for growth and profits. have a great day. Tim

    Editor: Thanks very much for your contribution.†

  24. Very nice interview with respond2. I have read some Pure Effect estimates for 110m in sales for the 1st year. If the launch is good do you see this estimate reasonable. Also do you see any scenarios for further share dilution in 08. thanks

    Editor: I am far from willing to back up $110 million – seems pretty optimistic- I’m not prepared to talk about it too much until we have a firm launch date. On dilution- yes- I assume there will be dilution. I assume they have sold some shares to raise capital to fund the media purchases- I assume shares are being issued for services of some kind. I don’t know to what degree, but I’ll be there will be some dilution. They probably didn’t raise a lot of cash, as they weren’t too bad off financially in the last quarterly numbers.

  25. “Editor: All pub cos have AGMs – I donít know when they have theirís, and Iím not really sure why it matters. You could call the company directly on that one. Iíve never been to an AGM that had any meaning- itís just a rubber stamp. They always say great stuff, and then you just hope. They arenít allowed to give out any information that isnít already available to the public, so not much to learn. If you want to gripe, just call or email the CEO.”

    I’ve simply never been to one; thought it would be a good learning experience. Also, wouldn’t mind the tax-deductible trip to Arizona.

    Editor: Well, if it’s soon, now is a great time of year to go to Arizona. Weather is lovely- golf is great.† You can interact directly with the management and get your own sense of where the company is headed.

  26. No doubt EFSF is moving slower than reported as far as products actually reaching such monster retailers, such as Wal – Mart ect…I raise this in defense at least EFSF actually has real products on the market , this putsthem way ahead of most Pinks or evn Bully’s…No doubt EFSF gas great visionaries such as Mr Leary and for certain , Dr. Goldfarb…Dr. Goldfarb is an honest man who 100% believes and backs his work , and cares wholeheartidly about the company (hats off to him ) No doubt EFSF is undervalued and has a mojor problem in the form of stock appreciation…Anyone who knows EFSF is much to aware of all the positives of the company…Here is where things get sticky…It is the people who are working the IR/PR side of EFSF (Not otc journal) I am speaking of direct people involved..The ones who are hired to spread the great story and progress of EFSF….Theseare the people directly responsible for diluting the market for profit and only have very short term answers to the questions…This is to keep them in shares and good standing so they may conatinue to make money for themselves at these low levels..Does not make since ? Why would they not want EFSF pps to go up (you are correct their share would be worth more ) If this ever happens EFSF would no longer have a need to hire or keep them around , that is why…EFSF is a long time victim of these cowboys going back to Dr. Carney to present cowboys who I will not mention….EFSF is a solid company with a bright future , only the future was stolen from them , So now we have to scratch our heads and wonder why we have to have this conversation every earnings quarter….

    Editor: As you know, I am very excited about the future of the company at this point in time. However, I can’t let this commentary go by without pointing out that, in my view, the company did not earn shareholder loyalty based on its performance in 2007. I saw projections and interviewed management extensively about what they could achieve back in Dec of 2006. If you could see those numbers, and see what they actually did, I’m sure you would agree their plan was completely flawed. In fact, I have rarely seen the management of a company be that wrong. Clearly, their thinking on how to get their great products in the hands of consumers was very flawed- and, by a huge margin. Dr. Goldman can be the greatest and most honest guy in the world, but if his product doesn’t get used, it’s not too meaningful. Now, it’s a new program. The market has something to get excited about, and they are teamed up with an organization that has a skill set EFSF has not demonstrated.† I use some of their products, and believe they have great value. Now, if you want to make money in the stock, the management needs to be right about its direction to get the product in the hands of consumers.† I’m not sure how to comment on those who have been associated with the company have come and gone, but I know if they were doing much bigger numbers, no one would care. Let’s hope it’s a new day, and the idea of taking the products directly to the public works to past expectations.

  27. Holy Cow!! 165 million shares I&O? Incredible. We’ll be lucky to earn one cent a share in two years. Very lucky. I’ve been around small caps for a number of years. I smell a reverse split of huge proportions in the not too distant future. Like 1:30 or 1:50 in order to get the price up and the shares down to manageable proportions. Been there a couple of times before and only one has worked out and that was only a 1:2 (ISRG). All the others were merely holding the wolf at bay for a while. Eventually, they were toast.

    Just suppose they sell ONE MILLION Dollars a month. Suppose they have a 30% NET, NET, that’s 3.6 million for the year (which would be a fantastic return). On 165 million shares thats just over two cents per share. TWO CENTS. Somebody has to get real here someplace. Can we expect a million a month in sales? Nothing anywhere close to that so far. What’s their production capacity? What happens if one of their products zooms? Can they keep up? Who produces their products? No 4-man staff can do that, for sure. I think we’re on opium right now until some sanity returns to our expectations.

    BD

    Editor: Simple solution- if you don’t perceive there is any upside in the stock, simply sell it and move on. With $10 million in sales, I believe the upside is about $.50- $80 to $90 million market cap. I don’t believe you can evaluate this situation on the basis of eps or pe ratios. I believe $10 million in sales will serve as a platform for launches of much more robust numbers in some of their “wild card” products. And, if they can get the first $10 million and get a product that becomes viral, the numbers could accelerate rapidly from there. However, I am just the source of the idea and the opinion. I believe every investor needs to develop their own metric and discipline. If these numbers don’t fit your metric and discipline, now would be a reasonably favorable time to sell, especially if you bought when I called it a technical buy at $.18 in January. †

  28. You respond incorrectly as to my comment on Respond2′s costs, it isn’t just the media (commission on which they make out like bandits), its the commercial cost (they are not scripted, filmed and edited for free) and does Repsond2 get a residual %?, and/or does EFSF have to buy media from them?, or can EFSF shop around to avoid being overcharged or gouged on media costs? You have to ask the right questions to get the right answers.

    Editor: No- there are no production costs- they are absorbed by Respond2- and no, Respond2 does not get a percentage of the sales. However, Respond2 does mark up all media about 20%, which is a full agency commission. This is as I understand it- there might be some minor variances, but that’s correct in the majority.†

  29. So the #’s looked pretty good.Revenues picked up.Do you have an update coming?

    Editor: Going to write a BLOG on it now. Looks great to me, especially the balance sheet.†

  30. The MDA of the quarterly report sure had a negative tone to it even with increasing sales.
    Whats your take?

    Editor: I believe it’s very strong. Balance sheet in particular. Going to write a BLOG about it now.†