...if I was a registered financial advisor and I am not, I would advise my VU1 clients to sell on this recent pump. Bill said he wanted to keep the burn rate as low as possible. That's no way to start over on a product launch. Also, what concerned me most was the bulb assembly taking place in two different locations, a couple hundred miles from each other. If it was in the USA I'd say maybe but in China that's nuts. Also debt piling up, and back on the, " looking for investors trail" which hasn't worked before so why now? Limited production capabilities and looking to ramp it up next year 2014 Q1 or Q2 yawn. Very dismal.
I'm not a big fan of Bill but I left the CC feeling sorry for him...a lack of enthusiasm, and it appeared that he spent all of a few minutes preparing his outline for the CC. Once again, it sounds like they have several electrical distributors (ED's as he referred to them) interested but nothing to deliver that would make this a revenue generator instead of a novelty.
I listened and while there could have been some more specifics, there were several interesting pieces of information given that I found encouraging, such as:
1) Production is currently in the thousands per month, but will increase (and I got the sense it wouldn't take too long) into the tens of thousands per month. Obviously we'd all like to see it in millions per month, but I'd rather have them ramp up with organic growth and watching production quality early on, than get ahead of the demand or have quality issues.
2) They're putting the R40 ahead of the A19 - still going to do both, but seem to think they can produce an R40 sooner and some distributors want more than one SKU to sell. The positive part is that they're listening to the market and proceeding to fairly quickly bring on a second product.
3) The team is back in the US. They must be confident manufacturing will go smoothly.
4) They're setting up a permanent R&D facility in the bay area. A dying company doesn't do that.
5) Samples are going out to about 200 distributors, with a hope/expectation that will trigger purchase orders. With low initial production rates and Lowes taking some stock, it shouldn't take many POs to sell all they can make, which is much better than the prospect of a high inventory and slow sell-through.
6) Bill said that while they need to raise some capital, they're aiming to do it while minimizing the dilutive effect on current shareholders, particularly at the current share price level. As an existing shareholder, I prefer that approach, so that the value being created per share I own is maximized, and the market isn't flooded with shares.
7) He acknowledged that there debts in default, but noted that this has been the case for a while, that the company has been in frequent contact with those debt holders, is paying interest and penalties and is working to pay them off. From the tone, it seems that there is not an imminent threat and they're being reasonable.
Mr. Smith at it again. I was going to ask a few questions on the call but didn't want to make him look foolish. So, they will start production in the thousands of bulbs a month. Sad thing is they need to be making thousands of bulbs a day (not per month) to support any decent size purchase orders let alone cover fixed production and overhead costs. I bet they are running at less than a 100 bulbs a day.
If VUOC were to produce and sell 10K bulbs a month. 10K x 20 = $200K and this is before any costs... Payroll, rents, production, engineering, overhead/utilities, shipping/logistics, taxes, etc.. No way VUOC can become cash flow neutral/positive unless they sell at least 25-30K bulbs a month and considering today's valuation VUOC's best option will likely be a take under (somewhere near 10-20 cents per share) by someone willing to invest some serious capital into the technology, production, supply-chain, etc.
Good luck to all longs however you would be wise to cash out on any uptick, IMHO.
ESL, I disagree on every one of your points. Given past results it's just fantasy but cudos for the fast typing. I think this tech started at the U of C Davis. Let the students figure out the quality assurance issues of this thing. Let 'em loose and we'll see some good old fashioned American know how and possibly a viable revenue producer. Keep it in the US and work the bugs out.
Just one more thought to add as an observation but Bill also mentioned the sale of the newly produced (what 2 years now) bulbs would generate revenue but would not help with cash flow. Back to square one: Where can VU1 find some dupes to ante up to extend this charade? It's becoming harder and harder.