When I spoke to Michael Wills he said that NC6 was trying to take advantage of a first mover advantage. The purpose of this thread is to try to flesh out how strong this advantage will be and whether it makes NC6 an appealing investment.
There are a couple of things that pop out to me:
- It does appear that NC6 will have a first mover advantage. The Canopy agreement and the advanced discussions with textile with clothing labels seems to indicate that NC6 will be the first to provide MC en masse to clothing labels.
- It is questionable as to whether a patent will be granted for the process of producing MC. There has, however, been an effort to commission research that will develop a novel way of producing MC in collaboration with a Swedish research organisation. This research was announced last month and it is unclear how long this process will take before it reaps results.
So I guess there are a couple of questions that need to be answered:
- How advanced and certain are agreements with clothing labels to supply MC? In a previous announcement (I think in the form of an investor presentation) there was an indication that MOUs would be getting signed about now, and that this would be followed by a process of contractualising those MOUs. Michael Wills told me that any MOUs would be announced to the market. Is the fact that we have not heard of any MOUs an indication that the process has been delayed? Or is it an indication that clothing labels are not as keen as we have been led to believe?
- Will any first mover advantage sustain NC6 until a patent can be secured for an efficient means of producing MC. My feeling would be yes. If initial contracts are for NC6 to supply relatively small amounts of Nullarbour to clothing lables for a period of, say, two years, this should be enough time for the company to have developed it's novel means of production and started producing in it's more efficient manner. That would mean a patent is not that far off (Am i right in saying that the patent process should not take more than two years).
Taking into account these factors, and assuming that there is actually a first mover advantage and contracts are in the pipeline, I get the feeling that a first mover advantage will be enough to secure NC6's future until a patent can be secured for a more efficient means of production. On this basis, I'm of the belief that NC6 is still a good investment despite the possibility that a patent will not be granted for our current production method of MC.
Anyone got any thoughts.
NC6 Price at posting:
8.3¢ Sentiment: Hold Disclosure: Held
