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Value,
I hear what you are saying and I understand the limitations of the structure of the "partnerships"...
But I don't care...
Please hear what I'm saying. Pascoe set the expectation... Nobody that I'm aware of put a gun to his head and said say it.
The structure of the business is such that APRI collects the wholesale or manufacturing cost when they deliver the product to the partner. There is nothing to stop Pascoe from reporting that APRI has delivered product into their hands for launch at a minimum.
This is my company. That's how I view it. Just like Warren Buffet preaches. When you buy a share you must think as if you own all of it.
My style is not forgiving of management teams that do not do what they tell me they are going to do.
Many Bulls get offended because they think it hurts the PPS when an investor stands up. Not so.
Carl Icahan and others have made that point over and over.
This company is way overdue for someone on the long side to say... "you owe me what you said you would do."
DG, You said.
"If a launch is after March, then "early 2014" will have been missed. (Note, the sky won't fall if the first launch is later, but we all hope and expect that the first launch is in Q1.)"
This IMO is far off the mark and forgiving to a company and management team that is undeserving of such.
Failure to meet one's own guidance is a cardinal sin and leaves the owners of the company hostage to under performing investments and should not be accepted.
Indeed the sky will fall, or at least management should feel like it will. The owners of the company have every right to expect management to do what they say.
This is a serious issue and prohibits larger buyers and analysts from taking the company at its word and thus retarding the growth of the stock even when good things happen.
Pascoe, sounded frustrated in the audio of the conference with the pps saying he knew we were undervalued and asking the investment community to look at how much has been accomplished as evidence. Perhaps he does not understand... Miss your own guidance and nobody believes in you.
I find the idea of no launch in "early 2014" to be unacceptable on many levels.
If indeed as reported by management they have received commercial orders from partners and begun the process of filling those orders as stated on the Q3 conference call then I see no acceptable reason why they should fall short of their own guidance of "early 2014".
Let me say... All bulls should demand their management team meat what they say. That is not railing against management or being negative. Falling into the trap of accepting less is a fools errand.
Think about how Steve Jobs always finished his new product roll outs with "and just one more thing". If you don't know what I'm talking about here is a youtube.
Lourdes was kind enough to take my questions directly to the CFO.
APRI does incur the cost of manufacturing Vitaros to fill orders by partners but receives the payment from the partner of the wholesale cost upon delivery which should be a wash on the balance sheet, providing both the production and delivery take place in the same Q.
APRI will recognize that revenue so it must be included in the 10Q.
I followed up by asking if the manufacturing cost and receipt of funds would receive their own line items but IR was not sure.
How is wanting to understand the mechanics of a business I own somehow nefarious?
My concern underlying my questions about production cost and the repatriation of those costs is important and I would point out nobody seemed to know the answer.
As an example, what if APRI produced $500k worth of Vitaros (wholesale). Shipped that product to a partner who in turn sells it and pays APRI a royalty on sales of say 15%.
The question of when we get our $500k production cost back is not a legitimate question? The flow of money can have a huge impact on a small company.
It's like not knowing how the cost of corn syrup impacts coca cola but only knowing how much you retail a 12 ounce can for.
I got my answer from IR, and it was what I had hoped to hear.
Fellow Longs can sleep easy.
I'm not "doom" anything what I am is upping the game.
So what?
That is meaningless. Look, APRI recieved a check from ABT for ABT to license the product, Vitaros.
So once they purchased the license they were then in a state of "preparing" for launch and can stay in that status in perpetuity if they so desire. I wish that was not the case but it is.
So until something meaningful happens the only answer in Canada is no answer at all.
If they have indeed moved the ball and are actively seeking product or training staff, then I would expect an official update from ABT not a second hand phone call.
One more thought on this.
When Pascoe says "we have received commercial orders and begun the manufacturing process and expect to fill those orders in early 2014" What does that really mean on a accounting spreadsheet?
Where is the cost of production booked?
Where is the payment from the partner booked?
What are normal terms of payment post delivery? On delivery? Net 30, Net 60?
These questions have nothing to do with the 2nd part royalties on sales. In fact these numbers should balance or be very close in dollars spent dollars received. But I'd like to know the answers.
Royalties from sales... Yes I understand that, but my question is deeper.
What are the wholesale costs to the partner? Yes APRI receives a royalty on the sales but they surely do not absorb the cost of production in that do they?
Is the cost pinned to the contract manufacturer?
Somehow the partner must pay for the product. My question is who gets paid and where is that revenue and cost of production booked?
Once we know that my question is how soon from delivery to the partner is that "wholesale" revenue recognized?
Thanks for the lead. I have reviewed the transcripts of the CC's in that time frame but I did not see where this was addressed. It's possible I just missed it.
I think the question I'm looking to have answered I will pose to IR.
If APRI ships product to a partner at the partner's request is there revenue of any amount recognized prior to reported partner sales? My hunch is there would have to be, but we will see.
I hear ya Markkind...
But I'm not sure we all agree on what "launch" is.
All activities around sales and marketing are up to the partners. So my assumption is that APRI can make some announcements once they send the product out the door to the partners.
Just like Apple with iphones. They recognize the revenue when they ship to the carriers AT&T etc.. Even though the actual phone may not yet be sold to an individual.
The term is Mark to Market.
I'd like to know from that stand point what APRI will count as a launch and when and how they will recognize revenue. I asked in a earlier post but nobody answered it.
My thinking is once the product with a deteriorating shelf life is in the hands of a partner who ordered it APRI can count it as a launch, with sales data to follow.
Hence how important "early 2014" is.
3rd Quarter?!!!!
Oh my God... They will have a full on revolt if it takes that long.
I've no problem with management getting rich. Yes it happens in every company.
Value wrote about his frustration as to how so many Bio's are far less accomplished than APRI and yet sport higher sometimes much higher market caps.
The issues with the market cap, management compensation, product roll outs, and exceeding your guidance are all related.
APRI has earned a level of mistrust in the market and without trust it's hard to get investors who are by nature forward looking cowards to covet your stock.
This is my point if not made so eloquently in other posts.
Pascoe must not fail to get the product out the door in "early 2014" or he affirms the view of mistrust. That may not be fair to Pascoe who did not make this mess but it's still his to clean up. And in fact just meeting that guidance by say 3-31-14 is not really smart either.
They need to learn to set a expectation then beat it not meet it.
It's a learning curve to be sure but that's what good management teams do. That's how you get trusted with higher market caps from the cowards who control it.
It's like a cat jumping on a hot stove... Try convincing the cat the stove is sometimes cool and there's food up there.
Eicoman,
Your post #13217 about a change in message from ABT in regards to a Canada launch of Vitaros seems in question.
Can you provide any evidence to substantiate this claim?
Excuse me Sir.
But saying management should be held to account in meeting their own guidance is not railing against management.
In fact I believe Carl Icahn would say it's a shareholder's responsibility to hold the management of the companies they own to be accountable.
I do not agree with raising the pay, adding bonuses, and stock for performance when we still sit without a single vile of Vitaros sold. A very legitimate viewpoint.
I also have said I want Pascoe to become a billionaire from APRI stock.
I want to see management directed by the BOD to activities that I believe enhance shareholder wealth and I'd like to see my fellow Longs hold them accountable as well but I'm asking nobody in this forum to do anything.
I'm in no way out of line by expressing these legitimate views on the company and in perfect alignment with the rules of iHub.
If you do not like me expressing my views I believe that's your issue not mine.
Again I don't get why you feel I can't be really hopeful while demanding they meet their own guidance.
And to be sure, I have felt like the lone bull over on YMB and tried to engage them and learn rather than fight and it's certainly not easy when mid thread I am interrupted by a person with the initials D.G. who immediately hurls insults at them in the middle of my conversations.
DG...
I'm not sure what you are having trouble with...
The fact of the matter is I'm long the stock and I have great optimism about the possibility of what they could accomplish.
That said, the facts are that the ABT debacle in Canada has been perpetuated by Pascoe's predecessors and the poor shareholders have been mislead time and again about the status of the launch in Canada. I really don't know how you can dispute that?
My greatest fear for my investment is that the company will not break the mold of it's past behavior to bring about a future we all want.
This board has been full of posts about where people are going to retire when we hit $20 and how folks will average down buy buying more if the pps will just stay down til pay day.
I'm not a fan of that.
I think the company is on the verge of something great but the message boards the analysts, and the BOD should be holding feet to the fire and demanding our leaders live up to their own guidance.
I liked everything I heard from the conference. Pascoe was calm, clear and hit each point.
Where I'm off the rails is the clear and evident hedge to push back expectations set from Q3's CC to deeper into 2014.
And I'm equally disappointed in my fellow investors who begin the process of justifying the hedge with nonsense about stealing a partner's thunder. No offense meant. I'm trying to illustrate a point.
I believe management reads these boards to get a temperature on the investors as they should. This community of Longs would be better served to spend a little more time pressing and a little less time petting each others feelings.
If you don't like my posts... That's your issue.
I will stay on topic, on facts, and in the face of Pascoe about his guidance of Early 2014.
That's their goal? What does that even mean?
NASA has a goal of bases on Mars. The Cleveland Browns have a goal of winning the Superbowl. Chris Christie has a goal of being President...
That's just hype and hope with zero meaning.
Let's get honest here. They've been "working" on setting up their ability to manufacture product for years... YEARS!!!
So come March 31st or "EARLY 2014", they better have shipments to partners or it's going to be in their face that they failed in their own guidance and the trail of failures continues under Pascoe, while he was collecting his raise, bonus and stock.
I'm serious... He set the bar and he needs to live up to it... PERIOD.
Mark to Market?
I went back and reviewed Pascoe's statements in the Q3 CC and he indeed points to "early 2014" for the delivery of product to partners.
So the question is, does APRI recognize revenue from those deliveries when shipped or when they receive payment? I would think when product goes out it's counted and they could report that as sales without disclosing the individual partner to whom it was shipped.
Does anyone have insight on this?
Thanks Grow...
The perma-bulls here can be thin skinned.
I'm deep into this stock because I believe it's going to work out to. I just dislike never looking at the downside. I find the practice of picking at the loose threads more beneficial then trying to determine when we hit $20.
My belief is there are many invested here who are all in and at much higher prices, so I kind of get it.
On the bonuses, raises and stock grants, yes I have a problem with it. It's not that I don't like Poscoe or the job he's doing. This company is at a point where additional "partners" are without value. Now I know many will say that's wrong, but I point to the pps as a fact.
The company does not need any additional partners to increase shareholder value. The company needs a launch and the money and credibility that goes with it. I have a hard time seeing management rewarded while we are without a launch.
It's like having a sales team and paying them for a quota of sales calls instead of actual sales.
I appreciate that. And I'm as hopeful as anyone. I'm very long the stock although I did sell some yesterday, believing I will be able to get it lower. But if the stock somehow moves forward I can live without those shares and be quite happy.
There was nothing negative in my post...
It was related to the fact Mr. Pascoe and others were just rewarded via pay, stock and bonuses while we are still without a launch.
As far as the difference between now and May or some other date, I was reffering to the clear call by the management team of "early 2014" that has seemed to disappear and I did not even mention Canada... I'm certain ABT has had ample time.
I don't want to pick a fight with anyone. This is why I have avoided this board. It seems if you point out facts people get mad unless they support the bull thesis.
The company's record of delivering on it's promises to launch Vitaros are a perfect 100%. Zero times have they come thru and that's why slipping from "early 2014" to "throughout 2014" is a hedge that good investors won't touch.
That's not to say a launch on March 31 won't happen... But it's foolish to not to believe past behavior is not an indicator of future results.
We need big buyers and they are not interested in a factory of broken promises or emphasis on achievement that does not meet their needs.
How can Mr Pascoe and others be collecting pay raises and stock grants and options as indicated by a recent filing while the product remains without a launch?
It's not that I think Mr. Pascoe is doing a poor job... Quite the contrary but it's about alignment between the needs of the company, it's owners, and management. Bonuses, raises and grants should be big and enticing to management but if they are not tied to the same for shareholders it's a problem.
I want Mr. Pascoe to become a billionaire on APRI stock, but only if he's successful in moving the value of the stock, not for hitting milestones of additional partnerships that do not lead to product being launched.
I agree with that completely. But I stand by my point that Pascoe will officially have failed to deliver as promised if we don't get a launch in "early" 2014 and the groundwork to back off that statement engendered no confidence.
Had he stayed true and said today the first launch remains on track for "early" 2014 I believe the PPS would be tracking much higher.
eicoman, that may all be true but at the end of the day criptic is not my preference.
They said "early" 2014 and are now backing away from it and that's a fact not a feeling.
If you go back on this message board or thru SA articles and their comments you will find where the launch is "keyed up", "Imminent", "very close" over and over and over for years... Again, fact not feeling.
I'm very hopeful and I think Pascoe is a winner but I for one intend to ask on the next CC why they are backing away from "early 2014" and to help me understand how I can have confidence in potentially stalling another product with "partners" in which you have no control over milestones of development. And I should not be the only one asking.
This is my first post on ihub... I doubt I will again, but I just could not believe nobody was addressing why the trading action was flat so I thought I would chime in.
1. What happened to "early" 2014 for a launch?
2. Where is the direction on Femprox? Yes I know they said a lot about Femprox but as an investor I heard no definitive movement,,, ie. we will follow the partnership path but will proceed toward initiation of the phase 3 regardless of whether a partner comes on board or not. The track record of the partners following thru is at the moment zero... That's right zero... Point to a single completion of anything by any partner and I'll eat my hat.
I felt Pascoe did a fine job with what he has but until they can prove they are not a scam by selling at least one $12 vile of Vitaros the get and deserve no credit and slipping from "early" to throughout 2014 is reminiscent of all the broken promises over the years.
I believe the true fans of the company, me included, should take a more hard line on the points in 1 and 2.
Best