For some time I have said CFO predominately was a Touchstone spin off and that CFO would need, hopefully a new bigger plant,
Firstly to the spin off,
It is clear from this announcement that Touchstone are getting the DOD contracts and CFO are the producers, or is you like Touchstone is the dog and CFO are the tail, and Placha and these other so called directors are the fleas on the tail.
Now any sale is a good sale,
I have said for a while that they are reluctant to get contracts cause they couldn't produce enough to meet these contracts, but contracts would not be given till they prove they can meet demand. chicken or egg scenario
Now with this funding they might be able to get this extra production through necessity to meet this Touchstone tooling demand,
They say at present 500 to 600 cubic foot required per month, that is 6000 to 72000 per year, just for tooling, and this could double, 12k to 14.4k per year, or 6 fold which is up to 43k per year which far outstrips max production at present site,
Just for tooling alone,
So this may force, with significant US govt funding to do so.
Importantly they would then get greens lights to set up where they want from the US govt.
Now we have so far been held up because directors have very small McCrackers, and virtually no real business plan, because largely they are just the tail of the dog, answering to Touchstone,
When they are forced to expand to another site they can then seriously chase commercial contracts, something they used as a reason to IPO in the first place, then they will not be so reliant on Touchstone, or have to pay rent, mind you they may run 2 plants,
Now with this reliance on Touchstone so far is not all bad as it is a start, pays the bill and is a fairly safe way to build the company, and Touchstone founders are major shareholders so it is their interests for CFO to be a success.
So to recap, Touchstone get the contracts, and CFO produce, so Touchstone get a fair chunk of the cake,
Now what I would like to see once this progresses is for current directors to get the flick and real directors takeover who are not Touchstone lackies, because even though DOD contracts will be huge, commercial contracts could be 10 or 20 fold, limitless actually, and these should have nothing to do with Touchstone so as to get full benefit, something that may not happen while the fleas on the tail are involved, cause you see so far the majority if not all sales are to Touchstone and will be that way for the foreseeable future till production is at say 100 to 150k per year,
But it is a start, a good start and a way to expand with help with funding.
The market has not responded but the market probably has not worked out how this will work, it is hard to work out cause of the way they write announcements, and they have to prove what they are saying is achievable.
This is my view, comments??
and some are thinking Toby and co bought shares in the IPO, I would guess they were given free shares for signing on as directors.
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