DOD funding, changing milestones, 1st stage vs 2nd stage $$$Good afternoon everybody,
This is the first day that we reached 80 degrees up here in the Seattle area. Had to turn on the cooling system. I am going to try and explain what I learned from Mark and other sources.
DOD Funding: As you all saw on the last video with the CFO/Peter. DOD has now got a deadline to comeup with an alt source of REEs and REE magnets with a lost of funding if they don't. Can DOD get around this like they have in past years? Maybe, but it will be harder with the lost funding clause. That is the Political pressure. There are generals in the penagon that have never like the idea that the REE and REE magnet they need is coming from China. So there will be strategic pressure from the top brass to find an alt source of REE and REE magnets. In the past when DOD has had this kind of problem. The usual method is to through more money at the problem. As we can see with MP and Lynas. This has not worked. Of all the fifteen companies that answered the bid letter. The only one DOD funded was Ucore. They generally pick three and see who is best. They only picked Ucore. Does that mean that Ucore can't fail? No, it means that DOD is all in on Ucore. As Mark has confirmed DOD personnel are at the DEMO plant most days, watching.
Changing the Milestones: As we all know Ucore has been paid for two milestones and is working on the other eight. As I understand it they deal with the four magnet REEs at different specs. As I tried to tell Pip, last post DOD is moving the goal posts to borrow Pip's words. By adding a fifth REE to the milestones. The main REE for building AI computer circuits. As I understned it, it take more than one REE to build AI circuits but the one that every manufacture needs is that one. Does that mean that they will be done be the end of June. I don't know for sure. I know that the main problem is not on the RSX side of the house but the setup and breakdown of the SX circuit for side by side comparision. Not making the SX work to separate REES out. Will Pip, take this well? No, not likely. So I ask Pip, does Ucore have enough money to go one or two months past June without coming to the shareholders for money? The silver lining to this is that if DOD changes the contract then Ucore gets paid more money for the changes. How much did pends on the orginal contract. Something that Peter may answer next time.
1st stage vs 2nd stage funding: Now, most of you know that I have said that DOD would fund the building of the first stage when Ucore proves that it can separate heavy REEs. I believe that DOD will do this to contract out most, if not all of the first stage REEs for themselves. That leaves the funding of the second stage to the OEMs. I believe that the OEMs are not going to do any funding until they know how much DOD is kicking into the pot.
Pressure: We have Political pressure from congress. WE have strategic pressure from the top bress in the penagon. To add to that Prez Biden is adding new traffs to China EVs in the next couple days. That adds international pressure to the whole mess and where is Ucore? Right in the middle. Now most of the share holders are standing pat, waiting to see how this all play out. You can see that by looking at the volume.
Am I wrong? Pip, says that I am always wrong. Only time will tell.
Dragon