Here's the framework I'm looking at it with.
Three or four years ago, the company proposed selling Blis k12 as an ingredient in other manufacturers' products. This would give access to many thousands more outlets around the world, and those manufacturers would provide the marketing resource.
Three obvious questions then: (a) Is that a good idea? (b) Can the company implement it? (c) Will it pay off.
(a) It seems a good idea, as trying to sell the Blis product directly around the world is a vast undertaking. The shareholders vote to proceed, and the preference shares are issued.
(b) Can the company implement it? At first the company bolts away at it. But soon regulatory problems arise, as the world's governments simultaneously strongly tighten the rules around supplements and food additives, presumably following the recent rise of worldwide commercial lobby groups. This makes it much harder to get permission, and very hard to advertise supplements.
Blis battles on, and gets through nearly all barriers. Europe still to go, where even huge companies are frustrated. But it takes longer and costs more. I'm impressed that they made so much progress even though it took longer than expected and cost more.
(c) Will it pay off? We can't know that until (b) is complete, but (b) just about is done now it would appear. It looked almost complete after June last year with both GRAS and China. But then unexpectedly we have spent about a year coping with a change in worldwide distributor, which the company hopes will make GRAS pay off the better.
Many of you have been arguing that the company wasn't gettng far enough on (c), but I've been arguing for a year or two that it first needed to get past (b), and that it was jumping the gun until then.
Well, assuming the company raises capital now, and assuming the world doesn't find a new way of collapsing, it seems to me the company will have finally more or less reached (c). So, will it pay off?
The trade-off for doing ingredients is that the company doesn't have control over the selling process and marketing of the other manufacturers' products. So we now have a range of products, and hopefully more in GRAS, but little control over how much resource these companies want to put in to selling the products.
Supplements look like they are a slower growing market. If manufacturers are restricted in being able to advertise the benefits, then this segment may go as it has in NZ. Get there in the end, but take time.
GRAS will hopefully provide faster results. It is apparently okay to directly advertise the health claims for GRAS, which is a huge plus. Also, manufacturers should see payoff in making a splash about the health benefit of a particular yoghurt etc. But first we need to see one or more such products hit the market, of course.
So, soonish we find out if this will pay off? How long is soonish? I don't know at all. I have my own yardstick, but I won't say it, as it is a total guess. The obvious first milestone we want to see is achieving cashflow-positive.
Whatever happens next, we're only really going to see progress by looking at the six-monthly company reports. Patience is still needed. There is still the uncomfortable possibility of this not paying off. If so, I won't be rewriting history and saying I should never have invested. I made my choice, knowing it was uncertain, and I won't try to pretend otherwise. But actually, I'm still pretty optimistic of the chances. I'll feel better when the next capital raising is complete, of course.
Well, that's how I'm looking at it anyway. I'm sure you all have your own ideas.
So what actually happens next? I don't know. We'll see.