I'm not bothered about short term fluctuations. As i said in my original post in the Emerging giant thread, if a Cap Raise comes it is for good reason. Hard to predict the SP on the day the TH is over, i'm expecting some price manipulation to take place though and its why i dont try to short term trade. I'll participate in the SPP and will also look to accumulate even more outside of this if the price allows for accumulation. Here is my reasoning:
Aldo said in the webinar that the book for the $2 million share placement which will pick up any shortfall from SPP is already at $5 million!
The big guys that don't get their allocation will be forced to buy on market. $3 million worth assuming SPP target is fully met by shareholders.
Based on what has been said in the past you would assume something has definitely changed the landscape for them to be in a position to want to speed things up and bring the extraction in house.
Casting back to the original investor presentation, Andrew said these exact words when asked about how far away NZS is from producing nutraceutical oils: "Oils is the next natural step or natural progression for us. The CapEx we have given ourselves 6-12 months to develop that capability (Extract Oils). In the meantime, we already have an order from Dr. Behr in place requesting oil. So to bridge that gap, I guess, in between when we look to develop that capability ourselves and being able to provide it now, we've identified a third party that is able to contract process and extract that oil for us.So once we feel we've got enoughuptake for marine grade oils, then we'll look to invest in that piece of equipment ourselves and bring that on site."
Aldo added to this by saying the following: "Yeah, and I guess if I can add, we, Andrew and his team have done all the investigative work so that the plant, the extraction machine, we're all ready to push the button to because it's a matter of purchasing it, Installing it is quite technically, this is not the quickest job in the world and probably take a good three to four weeks to get the installation finished. But we're all ready to go.We just want a little bit more surety, a little bit more, you know, the contracts in the pipeline for us to make the switch from a third party to an in-house service that we can deliver to our clients. Now, we're of course, we're confident that we're going to get there eventually and it's going to happen. But we are just timing it at this stage and it's probably going to take one or two more contracts in the very near future for us to flick the switch and move into in-house capability."
Fast forward 3 weeks and NZS is capital raising to bring in their own extraction machine and to build a war chest. The equipment was only expected to cost $300 - $500k. We are raising $5 million. We've also got close to $2 million in the bank with rising inflows each month.
3 weeks ago they were happy to use a third party for the Dr Behr oils order for the next 6-12 months, and now they are bringing it in house LOL!
Its not even about reading between the lines, its right in front of us, clear as day! "Open the gate and unleash potential" That is a quote from Aldo guys.
Aldo is now on record saying "Expect a steady stream of announcements in the next 4-12 weeks" These deals seem to be done but cannot be officially announced until regulatory approval is signed off. This would explain why they are now so confident to bring it in house. I can't wait for the announcements about these new agreements to drop. I'm intrigued to know what deal or deals has made them bring forward this in house extraction capability. Is it the US distribution agreement? Is it a Chinese distribution agreement? Is it the commitment from Dr Behr for the add ons OR is it the Hong Kong Dried Ling Maw deal enough to underpin all of this?
It would be good to get an August sales update also. We know about our deals with SMB, Good Health & Dr Behr, but what we dont know is if there have been any additional trial orders or sales of FMCG products since July.
We know this quarter is going to be a cracker but I cant wait for the market to value NZS once these new agreements are signed and new products are added.
You would expect every quarter to be growing for the indefinite future. Everything is setup for growth after this capital raise. Coming out of COVID will only be a positive thing for NZS as well. It would allow us to grow the number of employees and turn the factory into a 24/7 money making monster.
I was thinking about the Dr Behr deal - the add on products (3-5 to be added in the near future) - If we are generating $432k pa for green lip mussels only, whats the total annual revenue from Dr Behr once all new products are added? I'm not sure on exact values, i know some guys here have posted about $ values of the various products. Once you start doing the numbers even conservatively you can see how quickly the revenues will grow from one single partner.
They are creating a template with the Dr Behr deal to use on further strategic partnerships in different regions you would think.
We know for sure we are about to announce the US distribution agreement (which is said to look similar to Dr Behr). What happens when they announce China, Japan, the UK and more? Massive revenues expected and we are setup to cater for more agreements.
NZS will really announce itself as an integrated Marine Biotech. Multiple deals with pharmaceuticals and nutraceuticals companies across every region of the world. We are not even factoring in the Dried stuff which they said has picked up recently or the other KDI clients they have access to where they can onsell the nutra products ad-hoc. Opportunities are endless in a growing market segment.
I've always invested with caution over the years and when management teams talk a big game, i take it with a grain of salt until they start to actually deliver. The first thing i remember reading from management when i looked into NZS was that quote about the $4.4 million Ling Maw deal with SMB and how it would look quite small very soon. I thought ok, these guys have big plans, dont they all.... lets wait & see..... Well my feedback is that this management team are delivering on everything they say and more so far. Lets hope they keep kicking goals.
We still need them to execute everything from here.....but i think we can see the blueprint on how they achieve considerable growth within the next 6-12 months quite clearly for those who have done their research.
If you really understood this business and where it is headed, you would not let short term price fluctuations scare you. Looking forward to seeing the growth story continually unfold.
DYOR
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