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Almost anything is achievable if you have the money, and a new corporate entity to carry a VertiCrop project forward unencumbered by the debt load Alterrus were burdened with, would certainly have a head start. We already know from comments posted by The Only Way is Up that the expertise to correct the faults in the Vancouver system is available, but any new investor will no doubt be weighing up all the "vertical farming" options now available, bearing in mind the fall out from the Vancouver systems failure (i.e. the effect on the credibility of the VertiCrop technology). The latter also demonstrated some shortcomings that went beyond mechancial failure - the inability to meet crop production estimates being one. Those who designed and built the Paignton unit were fully aware that the VertiCrop system needed ongoing modifications and refinements to meet its full potential, but were never given the opportunity to develop these. The R&D facility that remained at Paignton, never resolved these shortcomings because it simply lacked the in-house expertise, and we all know what happened to the Valcent EU team who posessed the latter.
The Only Way is Up I believe your statement that the UK Team really messed things up must be a typo? I don't believe you can hold any of the UK Team responsible for the situation that now exists with Alterrus! In fact, if they had kept that team together, the liklihood is that the systems failure with the roof-top VertiCrop in Vancouver, would never have happened. Don't forget the modifications that were incorporated in that unit (as opposed to the prototype configuration in Paignton) came out of the Vancouver office, not the UK. The problem now is that I hear the system failure is so severe that it is not just a question of a repair, but a major re-design and complete re-build. Anybody taking it on therefore, is going to have to make a substantial investment up front, way beyond the cost of purchasing the assets of the company.
So am I am right in believing that the likely outcome now is an eventual sale of the assets of the Company through the official receiver - the assets of course, being Local Garden and the VertiCrop system? If this is the case, what a heck of an opportunity for a third party to pick up these for peanuts and carry the concept forward unencumbered by any debt load or pending court actions! (The potential Chinese interest reported by the Company could be rubbing their hands at this opportunity). I trust also that the Company will provide greater details (or preferably an independent engineer's reeport) on the extent of the VertiCrop system breakdown. The cost of repairs must surely be a factor if it has been the eventual cause of the assignment for bankruptcy, and surely us shareholders have a right to know this, as we are the ones now being hung out to dry? Although the debt load the current management team inherited has also undoubtedly been a factor, there have also been some pretty dumb decisions made along the way e.g. the decision to dump the UK operation with their team's backgound and experience with the system and hydroponics. Can't see that the engineering errors subsequently made with the VertiCrop system would have occured if their technical boys had still been on board.
So am I am right in believing that the likely outcome now is an evetual sale of the assets of the Company through the official receiver - the assets of course, being Local Garden and the VertiCrop system? If this is the case, what a heck of an opportunity for a third party to pick up these for peanuts and carry the concept forward unencumbered by any debt load or pending court actions! (The potential Chinese interest reported by the Company could be rubbing their hands at this opportunity). I trust also that the Company will provide greater details (or preferably an independent engineer's reeport) on the extent of the VertiCrop system breakdown. The cost of repairs must surely be a factor if it has been the eventual cause of the assignment for bankruptcy, and surely us shareholders have a right to know this, as we are the ones now being hung out to dry? Although the debt load the current management team inherited has also undoubtedly been a factor, there have also been some pretty dumb decisions made along the way e.g. the decision to dump the UK operation with their team's backgound and experience with the system and hydroponics. Can't see that the engineering errors subsequently made with the VertiCrop system would have occured if their technical boys had still been on board.
The breakdown of the VertiCrop system in Vancouver sounds serious enough to cause major concern, particularly the comment in the CNSX Monthly Progress Report "It is not clear as of todays date how this situation will affect the Company on a go foward basis". As usual however, Management is keeping the information it releases to its shareholders to a minimum, so it may be some time before we find out exactly what is going on. There were some significant changes made in the size and design of the plant trays for the Vancouver plant compared to the Paignton prototype, and one wonders if this has resulted in some structual failures due to the extra weight of the larger trays. In any case, with the Company's debt load, the court actions pending (plus legal costs) and now these problems, some of the recent submissions to this journal concerning spectacular projections for growth must look a tad optimistic.
The winding up of the UK operation was certainly not the Company's finest hour and there are yet unresolved issues which remain to haunt them. Unfortuntely the legacy of El Paso was such that cost savings had to be made, but the manner in which they were implemented with respect to the Company's responsibilities in the UK does Alterrus management little credit. The team put together by Valcent EU's then Managing Director Chris Bradford, were capable of taking the company and its technology way beyond the next level of coporate development, but as Grahame Dunling suggests lack of recognition and ongoing concerns about cash flow took its toll. At least Bradford was able to ensure that all members of staff received what was due to them before or at the time that operations ceased, but ironically I understand there is some doubt as to whether Alterrus have ever fully discharged the Settlement Agreement they signed with him.
I was under the impression that the original VertiCrop design came out of the Valcent R&D facility in El Paso, where it was being experimented with as a sideline to their pursuit of a techology to extract fuel oil from algae. The latter came to naught but in the process it cost the company millions of dollars. In fact the whole company would probably have gone under at that time if the UK mangement team had not been sufficiently impressed with its potential to take development of the VertiCrop system forward, thus providing Valcent with a viable business plan. Ongoing R&D is an essential element in the commercial development of any new and innovative product, and even with the Vancouver facility now in production I see this as a weakness in the current Alterrus structure. In effect this has been a weakness since the decision was taken to wind down the UK operation in 2010/2011, though in fairness Valcent (EU) had been struggling through lack of adequate funding for some time and had lost key personnel such as Grahame Dunling as a result of this. My current concerns are that the VertiCrop is a relatively high(capital and operating)cost system seeking to prove itself in a market that appears to be moving towards simpler and more cost effective options.
The wisdom of pursuing opportunities in the Chinese market before securing a market base in North America must surely be open to question? Not only are the related costs of developing this market considerable, but anybody who has ever done business in China is fully aware that respect for design rights and patents is a fairly scare commodity. One thing is for sure, if the potential for the VertiCrop system is recognized in China, low cost copies will be appearing in fairly short order elsewhere.
I commend your continuing optimism Barunuuk, and it may well be that your assessment of the current situation will prove to be correct. I certainly concur with your suggestion that Alterrus concentrate their efforts in North America as there would little for them to gain at present by attempting to move into global markets. However, Alterrus may well be ahead of the "vertical farming" game in with the VertiCrop system in North America but my concerns still center on their ability to retain this edge, with no signs yet of the all important major injection of funds which they so badly need. Outside North America improvements in hydroponic, lighting and automated operating technology advance steadily. I am lead to believe that in the Netherlands, the Dutch are now widely employing flood and drain and floating table hydroponic systems which are super cost effective, while in the UK there is at least one company following this lead, and another currently developing a technology that combines the advantages of vertical growing with the lower operating costs of these simpler hydroponic systems. It must be only a matter of time before such "state of the art" systems(plus whatever else may currently be under development in China and Japan) appear in the North American market.
I believe the BEIG trials were not limited to Spinach, but it is disappointing that the postive indications we were getting at one stage, with the possibility of some kind of ongoing contract, appear to have come to naught. It does seem likely that the debts that were left uncleared when the UK operation was wound down have influenced the decision to pull out of the UK altogether, but it is highly unlikely that this will make those debts disappear overnight. In the meantime there must be concern that in spite of months of apparently successful operation in Vancouver, there is still no sign of any deal in the pipeline with regards to further expansion. There must be some danger that the VertiCrop system will be overtaken by developments in hydroponic technology elsewhere, and without an effective R&D operation, which the UK provided, what are the chances of Alterrus waking up one morning to find they have a dinosaur on the parking lot?
Amazing - the Epcot Center project was originally initiated by the former UK subsidiary way back in 2009/10, but lack of funding put it on the back burner - like so many other sound iniatives that came from the same source.
All good stuff no doubt, but why aren't the shareholders being told? How long does it take to put together a News Release that would at least give us some positive information, rather than these periods of prolonged silence? Generating revenues and keeping your customers happy is encouraging, but I still wonder why we are hearing nothing about the big issues that would move the company forward - e.g. the potential contract with Birds Eye in the UK, and the follow up to the interest shown by other major cities in the US and Canada, to say nothing of the re-structuring and financing that was suggested months ago.
My main criticism (together with a number of shareholders I keep in contact with) is the lack of information that is passed on to us. I just hope that "no news is good news" but suspect that financial issues may still be restricting what should be major advances in terms of new business for Verticrop and Local Garden. I Hear the odd rumour but does anyone have any solid information as to what is going on?
Concerned that there is no news on re-financing or tie-in with Birds Eye. BC Food Processors award is great but let's not forget that the original concept came out of El Paso, Texas, and then was refined and developed commercially in the UK!
It is no secret that negotiations were initiated with the Epcot Center to install a small unit at Disneyland as far back as 2010, so it may well be that this has been resurrected. The amount of free capital available to Alterrus assuming the agreement with SSSSI goes through may not be enough to keep the creditors chasing them in the UK at bay, let alone provide them with funds "to pursue further income producing opportunities". There may also be some way to go yet before any kind of a deal can be done with Birds Eye, so survival in these difficult times is certainly critical.
Maybe when it came to the Fifth Labour, David Andru wisely decided he was no Hercules.
I believe you are absolutely correct. Birds Eye are a very high profile UK company and part of a much larger European organization (Birds Eye Igloo). The long term implications for Alterrus if they can enter into a working partnership with them are potentially enormous, but Alterrus must be seen to be responsible corporate citizens. Their recent attempt to de-list the UK subsidiary company which was promptly blocked by a creditor may not have done them any good in this respect, as this information is easily obtained through Companies House records and is therefore very much in the public domain.
Is it not a known fact that traditionally larger institutional or corporate funding groups fight shy of investing in a company if any significant portion of the investment required is going to clear debt? Are these not the kind of investors the Company will need to meet the level of re-financing required?
Ref Post #583 Have done some further research and I believe the information you refer to relates to the business they operated in El Paso, Texas, developing a process for the extraction of bio-fuel from algae. It is the premises formerly occupied by the UK subsidiary where the Verticrop system was developed where problems may may lie. There are aslo indications that they are being chased by other creditors as a recent attempt to de-list the UK company was blocked, usually a sign that money is owed to other parties. You can check this out easily by going to the UK Companies House website.
Hope they get their act cleaned up in the UK. Still too much owing to too many creditors.
Further research on the fiscal status of the UK subsidiary indicates that an application has been filed at Companies House to de-register the UK Company. However, it also appears that a number of creditors have filed objections to this, which would suggest that there are still some serious financial obligations to be addressed before Alterrus can depart the UK corporate scene with a clean sheet. A former employee was very guarded about the UK situation when contacted, except to confirm that all operations had ceased at the Company's Launceston, Cornwall location some time ago, although an R&D facility was still being operated at Paignton Zoo (and no doubt conducting the research for Birds Eye).
The $52 million deficit was not created solely by developing the VertiCrop system. Most of this (Some $40+ million) was spent on establishing the Comopany's original R&D centre in El Paso and the attempts to develop a technology for extracting fuel oil from algae. The vertical growing system was a sideline, recognized by management of the UK subsidiary as having potential, and the concept proven with the building of the first VertiCrop at Paignton Zoo in 2009.If it had not been for this, the Company would have gone under when the algae program collapsed.
It is a matter of public record that there have been a number of court judgements made and still outstanding against Valcent Products (EU) Ltd (the UK subsidiary)for non-payment of suppliers accounts following the decision to close the facility in Launceston, Cornwall, in 2011. Although it is now being reported that Alterrus are winding up the UK Company, this does not necessarily mean that these problems will automatically disappear.
Like many Alterrus/Valcent investors here's I hope 2013 marks a major turning point for the company. I understand there are still major concerns however, about the ability of the company to meet its commitments financially, with particular reference to its affairs in the UK.