RE:RE:Cash Burn RateFatTom wrote: Yes, I would also like to know more about the manufacturing lead times. I know they have said that on many of these projects it is not the manufacturing that is the hold up, it is the site permitting and prep work that needs to be done before delivery.
For the amount of orders posted last year, I would've thought more sales would have hit the books.
I would have to know more details but, to me, these are a custom shipping container. That's why they're built to the size they are. Perfect, makes sense and great for ease of shipping. They also have a better manufacturer that can produce more units per month in China. Pick them off of a truck, set them down. Hook up electrical supply. I understand their central working area but, again, simple concrete pad if required. Done.
For prep work it would depend on the ground they are sitting on but I would assume most of these units would be on good ground not in muskeg like we had to work in. We would build a compressor pad for +100 ton equipment in a few days easily including on top of mountains in remote areas. If piles were needed, depending on the number of piles, it would also be a matter of days to lay them out and drive them for an entire facility site. These are stainless steel shipping containers. Not sure of the weight but I am pretty confident to say a forklift could bump them around. My point is, they are not overly heavy.
I've built and installed many processing facilities ad time is less than these containers. Equinor did this install in 4 hours.
https://allseas.com/pioneering-spirit-installing-the-johan-sverdrup-p1-topsides/#:~:text=The%20actual%20installation%20operation%20took,for%20transport%20to%20the%20field.
I've been involved in fabricating offshore facilities but have not been offshore to install. Overseas, yes. Canada, yes. Mountain tops, yes but, not offshore. My point is what I said before, significantly more complex euipment in much more difficult environments are quick intallations if organized properly. Fabrication might be their delay right now since they do not control it. They're made in China. Cheaper of course. It's doubtful with such high labor costs in Canada and governments intent on killing business in Canada they could build them cheaper but there would likely be peace of mind having control over the process. I see they were hiring a fabrication manager to work in China and that might be telling. I don't know if the position has been filled but it is just more cash burn.
For permitting, I would have to understand more. If these are on someone's farm then what permits are needed exactly? Oil and gas permitting in AB is very complex but it is still completed in relatively short order for projects of similar or larger scale as a shipping conatiner set up would be. They'd have to run electrical supply from somewhere and that could be part of the permitting they need and maybe in some instances a business permit/amendment from a municipality but, again, I do not see the complexity here that causes such delay to revenue.
They had great momentum going but it is slipping now. I have been reading their Twitter feed and obviously they filled the "social media" position... more cash burn.... but it is all fluff. They are a vertical farming tech company not a mental health business. Do they really need to pay someone to send a Tweet that says happy Cinco de Mayo day? A first grader can do that...maybe even pre-kindergarten these days. I still love the foundation of the story....farming, produce, feed....but there is too much side show in my view and it costs money only to lead to dilution eventually if little recognized revenues surface. The scientific advisory board still doesn't add up to me other than potential contacts within the board to maybe apply for grants etc. and the research for their Hydrogreen equipment at this stage was a little disappointing because, as I said, that could take years and what is the end game? will other potential buyers simply wait for the data? Cattle don't fatten overnight.
The awards, the articles etc are all great. Tweets are fluffy in typical Canadian fashion. I used to get teased when I was out of country and asked if Canadians "hug it out" when conflict surfaces. And I was the boss!! HAHAHA However, without sales it is all meaningless. And 1 sale to Australia is great of course but I wonder how long to actually ship which is when they recognize revenues. Then how long to actually receive payment on the invoice or is final payment required prior to shipping? not sure. The 100+ installation in BC is apparently next year but I would have to re-read that to confirm. That's a long time for a sale to finalize.
I am still in to win but flags are appearing for me enough to question what I am seeing. Again, I have no problem being wrong and sales will start magically appearing but, at this point, sales and associated revenues sure seem elusive and momentum is fading. For such a top heavy management structure burning up cash for associated salaries, it would be of benefit to actually see that monetized. I mean, that is the point to it all.
Q1 should be out soon I would think. That will say alot about cash burn since the latest financials were year end 2020 just after the financing so of course the balance sheet would look great on the asset column. The assets reported showed ~4MM in inventory....I would hope that means they have containers already fabricated and ready to ship and the inventory isn't something else.