Still waiting on a response on a very serious claim.
You commented very specifically about a raw material of production - resin - and its high cost which effectively means the selling price of the end product is lower than the cost price...
In reading your comment again, I think you have trivially and carelessly thrown the word "resin" out there instead of "plastic bags".
Resin is not equal to Plastic Bags. Resin is a raw material and an important variable cost of production.
If your comment is more about the overall profitability of the company (based on a past track record of high fixed costs like wages and R&D) and not pointing to specific production costs, be very careful about the words you use. This is indeed an historical argument, but with these trials, we now have some very interesting indicators that sales of serious volume are very possible and potentially 6 months away.
My post was all about high volumes of sales - there are some serious trials in place - these are not trivial exercises (for either party) and as I said, if it is looking like these trials are pointing towards sales, production capacity needs to be in place.
If behind the scenes, Cardia has some SI's prepared to underwrite this CR and indeed the funds are to go to ramping up China production, I'd say directors would be making it very clear to SI's what the opportunity is.
Let's not rehash the same old negative arguments - these trials are by far the best indicators Cardia have ever demonstrated of (big) sales opportunities - they are not simply throwing around possible partner names around again, like Nestle.
As I said in my post, if investors want to wait another 6 months to see the trials convert to sales (and there is no guarantee), then this is fine, but the difficult task in the meantime for management in this situation is that they will need to tool up much greater than anticipated (they did not anticipate sales of this potential volume) and in advance in order to meet the commitment - hence the need for a CR. They cannot just stick their heads in the sand...
...not a bad position to be in IF it all pans out. If SI's are prepared to underwrite, then this is a great opportunity for all.
CNN Price at posting:
0.9¢ Sentiment: Buy Disclosure: Held
