Hmmm
Nice fluff but I have my doubts again:
1) I hate round numbers and numbers that match in these slides.
Why would it be the case that the "full scale Facility" produces exactly the same per week as the pilot plant does per month? Is it approximately 4 times the size, or is one more efficient than the other?
2) 2019 - 2020 "Finalizing Major Commercial Agreements" is indicative that discussions are already at an advanced stage. If they were, we'd know, as the rumour mill would have already started grinding. I think discussions are very early on and therefore to say "finalising" is somewhat putting the cart before the horse. Since there's an annual revenue figure of $3MM+ (which underpins their bizzare one size fits all, costings), it's rather important they can guarantee investors a ready made market for the what each facility produces.
3) As for the "Multi Regional expansion" 10 further sites across country, you don't pitch up to a micro-financing event ike this and tell potential investors you want to replicate a facility that does not yet exist, across 9 further sites without a cent to finance the expansion plans. They are just too ambitious. Also, why 10 sites? Anyone in business knows that to pitch a nice round number like 10 is just a pipe dream. They should have opted for a more realistic and believable growth trajectory like 3 further facilities in 2021, followed by an additional 5 each year thereafter. To say 10 facilities by year end (presumably, it doesn't actually say this) 2021, without any evidence that they've carried out feasibility studies and costings for the same, is mind bogglingly ridiculous and shows a very amateurish approach to the business imho. Are they really trying to suggest that each new location will have identical costings and Internal Rate of Return as given on page 19. Why also is there no discount rate given (based upon which the IRR is calculated), nor number of years, both of which should underpin the IRR and give investors an idea of the BE and payback periods for their investment? Assumptive it may be, but it's key to Capital Budgeting when using the DCF method to project profitability. I mean as a rudimentary finger in the wind calculation (which audience members will have done for themselves on the day), cost outlay is $4.5MM sunk cost with a projected annual profit stream of $1.5MM Gross (probably netts to <half that). So we're looking here based on NS numbers of a payback period of 3-6 years as a minimum. Too long for most micro investors.
All doesn't add up to me. I want to be positive, but in this day and age, this presentation is simply not good enough on paper either visually (1990's tech), or more importantly on the numbers.
Nice fairy story but not likely to bring the finance in imho when $5MM a pop is the min entry level price, with such a long time to recoup the initial investment, in a highly risky investment climate.
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