RE: It`s No Real Surprise - Geoff
posted on
Aug 01, 2006 04:57AM
I have no reason to believe that the plant is NOT producing product 24 hours a day with the one line that was announced in the SEC filing as being up and running.
As to a ``quiet period``.....theoretically that ended when the registration statement was approved by the SEC. However, it would seem that the company has self-imposed an extension of the ``quiet period``.
The web site indicates that they have added sales staff, though there has been no announcement of revenues or sales, other than to Mid-South Feeds. However, since the Company seems to still be in full scale operation, cash flow must be coming from somewhere.
One can speculate about the possibilities, and based on the history of posters on this board, those speculations are somewhat predictable.
I, for example, might speculate that, based on the nature of the agicultural market, a backlog of inventory must first be produced and warehoused in order to provide a steady supply in the event that production is interrupted for any reason, and in order to demonstrate to customers that there is a reliable supply available to meet their demand.
I think of it this way....
My business vehicles consume 550 (more or less) gallons of gasoline a week. I would consider converting my business fleet to ``bio-diesel`` fueled trucks. However, if I consult with my local fuel supplier, and he has only a thousand gallons of bio-diesel fuel in inventory, and gets deliveries once a month, I might be a bit reluctant to go out and trade in my gas-guzzling trucks. When the fuel supplier puts in a 10,000 gallon tank and has it filled weekly, I would begin to re-consider.
So too, it must be with large poultry producers. I doubt that anyone who requires, let`s say, 5,000 kilos of Agrastim a month, will put money down on a one year, $9,000,000 contract with BioAgra until it can be demonstrated that there is an adequate and consistent supply of product, sufficient to meet that customer`s demand.
It would seem reasonabe to me that at least a couple of months of steady production would be required to accumulate enough inventory to qualify BioAgra as a reliable and consistent supplier of product.
So, ``Is there as little going on behind the scenes as meets the eye?`` Well, I guess that depends on what one ``sees`` as going on right now, and whether the accumulation of $1M or $2M in inventory, along with minimal sales to meet cash flow needs, can be deemed to be significant business development.
To my way of thinking, we are right on track, and I am still holding all my shares.
In fact, at these prices.....
;-)
-z