PCT Ltd (PCTL)

[RealDutch]

For some reason Gary has chosen to give away the Iiquid to the distributors aImost free of charge.

You are simply wrong.

First of all, the distributors were hardly up and running in Q2 as some have explained already.

Secondly, price/volume is always going to be a trade-off. You want to get sales banging and worry about margins later.

Third, let's look at the facts. Gross margin was 53% in Q2. Given that most of it was sales of fluid, Gross Margin on fluid couldn't possibly be below 40%.

General expenses were higher than expected, probably because of expansion costs in Q2. So they don't really count.

All the signs are that margins will improve and head towards 60% and beyond.

As for the 10,000 gallon/day capacity mentioned in the podcast, in CEO-talk, it probably means it will take them another 3 months to get there.

What it means is, max capacity. It doesn't mean they sold 100% in Q2, it doesn't mean 50% and it doesn't mean 10%. We don't know. If it is 15% in Q2, 25% in Q3 and 40% in Q4 then they are doing really well, with margins improving all the time. We are probably heading that way when some of the distributors start selling. Or if they sign a couple of big contracts.

Did you know that it takes Solomon 3 YEARS to get to full capacity with a new shrimp farm?

As for a $1 prediction, it is as good as any. Who knows with that many distributors. With a UK deal. I think the latter one will come and some distributors know more than we do.

Now, the frustrating part is dumpage by CDEL. I could already see it coming. And then they "forget" to issue a PR and give guidance. Once again we are sitting ducks.