Member Info for Dr_Horrible

Anyone seen this one before?
https://www.facebook.com/photo?fbid=642391017893694&set=pcb.642393331226796

Not sure what it is, but it has FF.

The cost will reduce lots further when the volume increases too :)

IF will find communication easier now. Previously the company had 1 partner, DSM. Everything PXS wrote could potentially be tied to DSM and may be sensitive. They could not tell us FF revenue figures, as that belonged to DSM.
Things have changed, they now have a truck load of their own customers and PXS statements cannot easily be associated with a particular customer. They can report on current revenue, profits vs forecasted revenue and profits.

It’s all guess work, but that’s part of investing, thinking about what it means, what direction it’s going and whether your money should be invested there or not.

I am feeling very optimistic at present, but find the waiting difficult. I just want to know how wrong I am now without the wait.

I have stated my guess previously.

I would guess that the company would not aim to have more that 1 years worth of stock sitting around. The stock has a long shelf life and they may save money by producing higher volumes in one go, but I think 1 year is probably sensible for the remaining stock. It's pure speculation based on a feeling of what seems right to me.

All revenues will now come to PXS and PXS will pay DSM a fee for their customers. PXS will now be getting new customers outside this agreement, as per RNS. Also, DSM may be ordering from PXS now for their remaining customers, the ones that purchase premixes or off-the-shelf products. This will be at a much better rate for PXS.

Given the high price of PXS, the stock levels, the amount of customers etc, I would think that the total sales revenue would be somewhere around £5m. I have nothing to back this up with. I'm thinking £3m to £7m, probably £5m.

I would think the step-down would be something like:

Financial Year 1 - 80% to DSM, 20% to PXS
Financial Year 2 - 60% to DSM, 40% to PXS
Financial Year 3 - 40% to DSM, 60% to PXS
Financial Year 4 - 20% to DSM, 80% to PXS
Financial Year 5 - 0% to DSM, 100% to PXS

Therefore, Q4 of this financial year will be in step down 1
Next financial year will be 3/4 step 1, 1/4 step 2..... and so on.

Follow the logic?

We have no idea whether the numbers are correct, they are made up after all, but if you can speculate any better, then we'd all be interested in your numbers and rationale.

*DSM :)

Krusty,

As of Jan 01st this year, Provexis produce and sell ALL fruit flow. All revenues will go to Provexis. Almost all existing DSM customers have now transferred to Provexis. Provexis total revenue will now be up significantly. Provexis will now pay DMS a royalty fee for those customers, stepping down in amount each year over the next 4 years. That leads us to believe that we may enter profit this financial year, but if not, certainly next financial year, irrespective of BH, gut health and other things.

I would write some further information, but think the have maybe not read the RNS' and fully understood what is happening here.

Krusty,

In September last year, they predicted that there would be over €1m of stock remaining at year end. So after 3 months of further operations there will be €1m of stock remaining to transfer to PXS.

We now know that it now costs approximately €150 per KG to produce (down from €600).

So what you are saying Krusty is that when PXS buy €1m of stock at €150 per KG (6666.6 KG), then sell it for €900 per KG?? (€6m) then there will be no profit in that. How do you square that away?

We don't have any idea how long that stock will last, but I would think 1 year would be a reasonable guess as any.

I hope you are right Sphinx.

Krusty, in short, none of us know. All we know is that DSM continued to invest money into FF research.

PXS make it ambiguous. When talking about DSM they talk of FF prospective pipeline standing at significant multiples, but it is not clear whether they are including BH in that. Some think it applies to DSM only, which would only require 1 larger customer or 2.

Hopefully things will become clearer, but as it stands they are purposefully ambiguous.

I hope it was extremely unfair to PXS, meaning that we will start to see a huge jump in profit now.

For all these years we have had meaningless updates like 'significant multiples of current FF sales', when we don't know what FF sales are and don't know what significant multiples means. Hopefully that ends this year, we should at least know what the FF sales are. We'll get a glimpse end of Sept, then a much better idea at the end of Dec. In the meantime we sit and wait for positive news updates.

I decided that significant multiples means 5x at an absolute minimum.

Multiple - 2x to 4x
Significant multiples > 5x

But I hope I'm wrong and between 5x and 10x they would say 'large multiples'.

What do other understand these expressions to mean?

Maybe we don’t have to pay DSM anything for the next 4 years as we can’t make a profit :)

As highlighted by Duttaroy in the Bangladesh article, it used to cost 600 per KG to produce, but now costs 150. This will certainly drop much further when the volume dramatically increases.

The whole model changed on Jan 1st, then BH volumes will be massively beneficial to future margins.

https://nutritionconference.co/speakers/

Yeh there is no volume at present, the share is dead. It will gain attention with China news and actual results / money in the bag.

At the end of the day we have no idea what is going to happen. Perhaps I am being far too bullish, but all the information we have seems to be very bullish.

It will be September before we perhaps get a view of income from old DSM customers, perhaps even year end.

Relevant to the earlier conversation about why it takes so long.

https://www.cirs-group.com/en/food/products-with-the-new-health-function-claims-are-being-possible-in-china

DP64,

I think you underestimate the potential value of PXS. A share value of 9p would only give a market cap of around £200m. That would usually be the price of a standard company that makes around £10m.

PXS will soon be a rapid growth company that will report profit perhaps this year, definitely next year. To date PXS share price has been kept low due to lack of financial transparency, lack of meaningful growth forecast, lack of money to sustain any further losses, the constant threat of more drawdowns, terrible write ups from supposedly knowledgeable people that every time fail to understand FF and it’s potential.

As of Jan 01st this year that should have changed. All Fruitflow will be produced and sold by PXS. We should see exactly what total revenue is coming in and what the costs are. We may even get financial forecasts, but maybe that’s too hopeful.

I would imagine, basing my guess on current stock levels, that the CURRENT total FF sales revenues will be around £5m. The initial BH orders will be multiple of that, so at least £10m.

Then we can expect BH and BH Distribution customers to drive significant growth. Followed in a few years by development of FF-based drugs.

The DSM prospective customers are the ones that are in the process of developing products. This is said to be significant and potentially multiples of current income.

DSM premix and gut health is a huge opportunity, but we need to see how that develops.

Square Pharmaceuticals will also likely drive significantly growth.

We could find the market cap being 500m in the next few years.

SIS reached circa £100m after it reported a £1m profit, the first profit ever recorded.

I don’t want the company to be purchased and this significant growth to be stolen away from us. I want us to be sitting here in 5 years admiring the progress and getting lots of dividends.

I like to think of things at a high level. We currently sell say 2 van loads of FF per year, but the BH order will be substantial multiples of that, meaning they will order at least 10 van loads per year to start with.

Then we should see quite a few more van loads from the prospective DSM customer in the coming years.

BH sales will grow massively when they launch additional new products and when their customers (a large number of multinational companies) launch new products. This has the ability to add lots and lots of van loads.

Then we have DSM launching FF for gut health. Let’s just assume that eventually adds a couple of van loads per year. On this, Hologram are holding a virtual Innovation Summit on 10th March from 12:00 til 15:00. Would be good if anyone can join in to find out if FF is mentioned by any guest speakers or Hologram.

Then we hope to have Mexico, india and Bangladesh coming online in the next few years. The Bangladesh deal seems to be with the market leading pharmaceutical company (Square), which one would assume would not be a small deal. So I would imagine that that this adds up to a good few vans worth.

Further down the road we have FF to treat medical conditions (drug). Starting with dyslipidemia, but I suspect we will also start to more studies about targeting hypertension. We had a successful small trial and then tumbleweed.

You can see how the forecast volumes are for massive growth. Thats just what we know.

Yep it’s created a massive opportunity for FF to really stand out.

One thing I have been considering is that we have no idea how the financials will work for the BH agreement. We know that massively increased volumes will reduce the production costs probably substantially. We know that the volumes ordered will likely be substantial multiples of current production levels, we know that the value will be multiples of current total FF sales. We have no idea how much BH will pay per KG or what the costs per KG will be.

So if they order £10m in the fist 12 months. How much profit would we make on that? It could be less than we think. Perhaps the agreement starts with high profits, but changes with volume?

Either way, it will increase the profit margin on all the non-BH orders, which we understand to be significant.

DP54,

BH are not simply applying for. Health claim. The SAMR and BH are working together on this. They need to create the framework and criteria by which all foods/supplements applying against this claim in future can be effectively evaluated, whilst at the same time ensuring that they can clearly meet the criteria themselves and evidence it. They also need to agree and approve the 5 year monitoring period, what will be monitored, what are the red flags, what actions will be taken etc.

Then on top of that we had Covid restrictions, which in China were significant. The studies are carried out at medical centres, medical universities and hospitals and at multiple geographical locations. All of these places would have suffered terribly under lockdowns.

At the end of September they thought they would be wrapped up with the trial data evidence by new year. This tells us they are right at the end, but in January they still had not finished. I would assume it will be completed by the end of March at the latest now.

Then BH and SAMR reps need to finalise their submission and hit send. we have no idea how long this will take. I would hope the next part takes no more than a month or two. The board are obviously fully aware of what is going on and in agreement, so there should be no surprises, it should be a box ticking exercise. I am now thinking full approval in May/June this year??? But genuinely have no idea whether I am even in the right ball park. It could be tomorrow or it could be next year.

The SAMR are embedded throughout the process. They would have been included in the initial scoping and testing. When trials are completed they write a recommendation to the board for its approval/ inclusion in the register. When the new claim is approved it will available for use exclusively by the applying company and monitored for a period of 5 years. After this it will be available on the register and other such supplements can submit their health claim evidence against it.

As Gix says, this is the first company to add an additional health claim that we are aware of, which is why it will gain significant attention. As it stands there are no such products in China that inhibit platelet aggregation and there cannot be for at least 5 years following the approval. Each of the other health claims on the register has hundreds or thousands or products using those claims. This is why a large number of multi-national food and drink companies have expressed strong interest in commercialising FF. as it stands, companies are restricted in their heart health range. When FF is available it gives them a cheap, approved, no risk option.

On top of all that, By-Health are targeting a specific health risk that has been highlighted in the Healthy China 2030 initiative. This is likely why some of the funding for the research has come from grants. BH will also get government help with getting their product out there. They will help break down barriers.

It is an enormous opportunity for PXS, BH and other companies. We already know Nestle have FF in their labs, so I would not be surprised if they are lining a product or two up. JuneYao Dairy were releasing at product in 2016 (Werdery Qin Drink) with massive volumes, but the regulatory framework changed in 2016 and stopped them in their tracks.

The China Cross Border E-Commerce distribution parter agreement is separate, but complimentary to the BH agreement. I assume that to mean that BH will supply FF+ Omega 3 in China with Blue Hat approval/logo exclusively to the CBEC distributor when Blue Hat is approved. This means they can hit the ground running, order it from BH and can immediately sell it in shops and pharmacies, for which they will have had a year to get those sales channel agreements in place.