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.
Based on my review of the details on our distributor list in Q2 we only had a couple distributors at full production for the whole quarter. We have a few that were in various stages of bringing production online with some if any contribution to Q2 sales. But of this list all but a few were active and producing/selling at the beginning of Q3. We will see a significant increase in sales from distributors in Q3.
Here is the official list
DISTRIBUTOR NAME & LOCATION PCT LEVEL ABC Medical, Puerto Rico 1 ACE Janitorial Supply Co., Inc., NY 1 Advanced Environmental Solutions, OK 3 BioBlasting, NJ 3 Box BioScience, NC and SC 3 ClearPoint Chemicals, AL and TX 2, 3 Collaborative Technologies, CA 2 Diamon-Fusion International, GA 2 Digital Ally Inc., KS 3 Earth Safe Solutions, LLC, CO 3 eOn Mist, LLC, MO 3 Focus Treatment Solutions, PA 1 *Fort Wayne (PCTL) Fluid Depot, IN 3 Germ Pro, LLC, NJ 2 Germinator Mobile Sanitizing, GA 1 HOCl Connectors, LLC, MO 1 HypoFoggers, LLC, SC 3 Proguardeum, Inc., NV 3 ProTools Express, CA 1 *Sapphire Disinfectant Services, LLC, FL 3 Seriously Clean, Ltd, MO 3 Tree of Life SC, LLC, SC 1 Trieu Technologies, IL 1
Now let’s go through them one at a time and consider what we know and when they came on board.
ABC Medical, Puerto Rico - signed on at the end of Q1 as a level one. They are selling Hydrolyte product in Puerto Rico. We were told that they would be receiving a Hydrolyte generator at the end of March, we do not know when the machine arrived or when they started producing. But we did not see the product advertised or sold in Puerto Rico until July. So if they did start producing and selling product in Q2, it was near the end. Should be ramping up sales from beginning of Q3.
ACE Janitorial Supply - we know they are one of our active on going distributors in the NYC market. They were obviously selling in Q2. https://www.acejan.com/#infection-control
Advanced Environmental Solutions OK. - - from what I can tell, it looks like they started ramping for production and sales in mid-April. They received EPA sub-registration April 16, social media activity began shortly after. So basically they were just getting started in April, should have been in full production by the end of Q2, but not sure how much real activity from the quarter. Q3 should be a full quarter from them.https://okaes.com/
BioBlasting - we know they are a long standing partner and distributor. They were producing and full production in Q2. https://bioblasting.com/-
Box BioScience- They were not announced until June 5 as a distributor. EPA subregistration was June 9. They acquired their manufacturing facility around June 23. So I expect they produced very little in Q2. They should have been ramping up to full production from the beginning of Q3. -https://boxbioscience.com/collections
ClearPoint Chemicals - not really much to go on here, we know they are in Oil & Gas. As far as we know they may not be active yet? If they are we do not really know what is going on there. -https://www.clearpointchemicals.com/-
Collaborative Technologies - This one I believe came in the beginning of Q3. EPA sub registration is dated July 9. Website still not live, says launching soon. https://collaborativetec.com/
Diamon-Fusion International - new in Q3, no contribution to Q2 - a well recognized glass care company. We don’t really know much about what they are doing. They have a sub - registered product dated August 13. So probably not in production yet. https://dfisolutions.com/
Digital Ally Inc. - they are producing Shield Products Disinfectant. Product was registered in June but it doesn’t look like any activity until July. Digital Ally PR’d the launch July 6. So no activity in Q2, had product for sale from the beginning of Q3, ramping up to fully operational in Q3. https://www.shieldcleansers.com/
Earth Safe Solutions - DE’s operation, not in production yet. Should be launching soon but no activity in Q2, probably no production in Q3. https://earthsafesolutions.com/
eOn Mist - They were announced as a distributor in April, but it does not appear to me that they had much activity in Q2. It appeared they were getting product out at first but then it was not showing up anywhere until July. Now it is available in retailers including Target, Menards, etc. So little activity in Q2. More activity in Q3.https://geteonmist.com/
Focus Treatment Solutions, PA - not sure on their level of activity, as a level one distributor, they would be reselling the Hydrolyte product that is produced by PCTL. https://focustreatmentsolutions.com
*Fort Wayne (PCTL) Fluid Depot- we know PCTL was getting Ft. Wayne ready for production in Q2, but likely not much if any until the end of Q2, should be producing in Q3. We do not know amounts but we know they have space and capability to produce a large volume
Germ Pro, LLC, NJ - They started at the end of May, but not likely much if any production until Q3. I check their website often and their product has been out of stock most of the time. https://www.germpro.com/
Germinator Mobile Sanitizing, GA - not sure exactly their level of activity of contribution to PCTL revenues. We do know they started quickly, but looks like most of their growth began middle or end of Q2. https://www.thegerminator.com/
HOCl Connectors, LLC, MO - this one is listed as level 1 but I believe they should be a level 3? They have their own sub-registered product, approved at the end of April. So they likely started producing in the middle of Q2, not likely much sales for Q2. Should be fully operational for full Q3. https://www.hoclconnectors.com/
HypoFoggers, LLC, SC - they were announced at the end of April. From what I have seen on their social media they were getting started operations in May and June, not likely much contribution to revenues in Q2, fully operational for most of Q3.https://www.hypofoggers.com/save-the-planet
PCTL Disinfectant Solutions- Our newest level 1 distributor, owned by GoldiS, Just getting started as of mid August, but should have some contribution with sales in the end of Q3 https://pctldisinfectantsolution.com/
Proguardeum, Inc., NV - from what I can tell they did not join PCTL until July, so that would be Q3. But they are growing quickly and I expect to have a decent contribution to Q3 revenues. https://proguardeum.com/
ProTools Express, CA - They are a level 1 distributor, meaning they resell Hydrolyte produced by PCTL. They have at least two websites that I know of selling product. It appears to me that they started in May, so some contribution to Q2 but not much. They would be fully operational for Q3. https://www.netzerotools.com/
*Sapphire Disinfectant Services, LLC, - they are a level 3 producer, also serving as a fluid depot for PCTL. Started out at the end of May. Likely very little contribution to Q2 revenues, a full quarter of production in Q3. https://sapphiredisinfection.com/
Seriously Clean, Ltd, MO - they are a long standing partner and producer. They have been fully operational for several years. Several links here is the parent company- https://seriouslycleanltd.com/
Tree of Life SC, LLC, SC - they are a level 1 distributor, reselling Hydrolyte using https://hydrolytesupplies.com/ The website was launched in the middle of May, so they would have been starting out then. Not likely much contribution to Q2, fully operational for Q3.
Trieu Technologies, IL - listed as level 1 but I believe they should be a level 3. I believe they were announced in the PR at the end of May. They have been raising funds and I don’t believe they were producing much in Q2. It appears they are now producing in Q3.https://trieutechnologies.com/
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