Replies to post #789 on Zivo Bioscience Inc (ZIVO)

[Amigo Mike]

Willy,

Your "read" on the 10Q makes it sound like they can't increase production. They CAN increase production (after all, how hard is it to add a tank, fill it with water and add some algae eh ???) .... it is a matter of MONEY TO BUY THE EQUIPMENT.

From the 10Q ........
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Although we anticipate the realization of increasing revenues from our exclusive distributorship agreement with Ceptazyme, LLC, our ability to realize any such increased revenue is dependent upon the satisfaction of certain conditions, including the expansion of our production capacity to meet increased product demand and our product's meeting the FDA's GRAS standard or receiving New Diet Ingredient ("NDI") status form the FDA, neither of which conditions we have satisfied as of this date, though we are working on meeting the GRAS standard. In addition, we are currently working on expanding our production capacity .
However, we have encountered some difficulty in expanding our production capacity and meeting the GRAS standard, If we are unable to timely and sufficiently expand our production capacity and meet he GRAS standard (or NDI status), there will be a material adverse affect on our business, financial condition and results of operations.

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An initial order of $51,100 was received in December of 2010. Due to several delays in the design of new packaging, this order was shipped in full during the month of April, 2011. We anticipate delivering additional orders beginning towards the end of the second quarter of 2011, with monthly increases in the minimums each month as production will allow and subject to satisfaction of the FDA’s GRAS standard.

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Under Liquidity and Capital Resources .....
As of May 11, 2011, we had a cash balance of approximately $3,000. We have had only limited revenue ($36,329 for the three months ended March 31, 2011) and have incurred significant net losses since inception, including a net loss of $467,281 for the quarter ended March 31, 2011. Subject to our expanding our production capacity to meet increased product demand (for which we do not currently have sufficient capital) and our product’s meeting the FDA’s GRAS standard or receiving New Diet Ingredient (“NDI”) status form the FDA, the revenue guaranteed to us under the exclusive distribution agreement is expected to contribute significantly to funding our normal operations.
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Separately .........
The Company and Ceptazyme agreed to waive the minimum payment provisions with respect to the first quarter of 2011, while packaging issues were being resolved. We anticipate the packaging to be completed by May 15, 2011 at which time we will begin shipments under the contract.
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So Xooma contract requirements are only now starting to come into play in the last month. We've seen the bottle change in May. One has to wonder why selecting a bottle and marketing design took Xooma 6 months. Maybe whomever was screwing around for 6 months at Xooma is getting the boot eh ("shakeup") ?

So the reality is clearly stated by HEPI ..... they will produce all the PAZ they can (for which production was previously already "doubled") to meet increased demand ..... however further expansion of the production capability depends on revenue and funding (if revenue is not sufficient ... and also tought to do while still continuing to work on the science). IMO, HEPI most likely expected the science (as in class and ID) would be done by now. That is causing delays to the entire process.

Lets see how much Xooma can sell and whether they can exceed HEPI's current production capabilities. Then we'll see whether or not there is "difficulty" increasing production.

Amigo Mike