@slippin Can't seem to reply normally so am tagging you.
Our tech is valuable, but the amount that is needed is miniscule. So, why would another business opt to throw wads of money at us to use it when they could go an alternate route, sacrifice a relatively small percentage of accuracy, and keep their wads, whilst still making a large profit?
The thing that makes us attractive is the fact that we provide a cheap way of improving product. Right now, we have Ellume by the balls so to speak, as their main money earner is their covid test that is dependent on us. They can't afford to change the formula and go through all the validation and certification all over again. So we should ask for a percentage, rather than a set-rates type of deal. I can't see that happening though.
Currently Ellume's product is bringing in revenue but it is a horrendous business model to begin with. All this time to develop and patent a technology, only to supply it cheaply to customers that reap massive rewards, whilst we waddle along picking up scraps. That kind of business is self-destructive. You develop tech, you supply it, then the customer reaps massive rewards and can proceed to buy you out if they choose to do so. That only hurts the investors that enabled the tech in the first place.
we should play hardball, but I don't expect that to happen at all. I expect the contract to be simply renewed, or be more generous to us, but at an amount that is irrelevant in the grand scheme of things. Even if we doubled revenue from Ellume, it would still be a small amount of revenue, from my calculations. Certainly not worth the market cap. Maybe not even enough to cover everyone's renumeration.
I'm very glad that they announced that they won't be selling the sauce to any other customers. However, we still have a deal to supply Merck with it. what's to stop another entity from purchasing through them?
I think that the original vision was to become a major enabler/supplier of raw product. That hasn't really materialised and I think that there's been a realisation that it is key that we become independent and push our IP and our own product out into the market. Note that we are developing our own anode, rather than just waiting for customers to sign contracts in the energy side of things.
Does 'Ellume Lab' utilise our product? If not, we are not mates. In that case, we are a stepping-stone enabling their success and we most certainly shouldn't be friendly. In the past it's been said that we operate in different areas and markets. That is not true. we are direct competitors. They are developing point-of-care tests that overlap our own strategy. If they are using our tech for that product range, we need a percentage, that is FAR above production cost and worth our time, but then again we supply Merck with dirt-cheap product.
At the end of the day, our survival is dependent on selling our own product, and selling it ASAP. Management seems to think that it's going to happen given all of the recent hires and additions to management. My concern right now is that another CR might need to happen if we don't realise revenue soon.
This quarterly will be abysmal by my predictions, and the next should start to pick up once we actually start selling our tests. The shorter also seems to think so and is betting on the market reacting to raw figures rather than what is actually happening.
Approval of tests is due in many jurisdictions and I expect many customers in Aus alone once that happens.
That sounds negative overall, but I'm quite positive that things will start to change once we get TGA approval.
(20min delay)