Hi all,
Just read through the announcement again, and gave myself time to digest it all. I think there are three significant developments to note:
1) The strategic alliance is going to enhance the product applications of CFOAM to include, but are not limited to: "solar thermal, rocket/jet propulsion insulation, next generation aerospace composite tooling and combat ship exhaust applications." If we then couple that with: railway applications, nuclear research, fire resistance programs, energy absorbing programs, home and related applications, commercial homewares, and then throw in PFOAM ... it seems that we have quite a sizeable market.
2) Perhaps the greatest advancement to be taken from this strategic partnership is that: "CFO and TRL have structured a formal working group to support development and expansion of CFO's current sales pipeline." I went trawling through TRL's website to better understand the company, and came across their key customers and partners - check the link below:
http://www.trl.com/customers-and-partners/
The fact that TRL are now helping CFO sell CFOAM and PFOAM surely implicates that CFO will now have direct access to TRL's customer/partner connections. And, I must say, there are some BIG names in TRL's customer and partner list .... Boeing, anyone!
(N.B. Someone asked the other day why we weren't pursuing applications like 'commercial and homewares' more vigorously due to the sheer volume of sales that could precipitate. After reading this announcement and looking over TRL's customers and partners; I found that TRL has key customer relationships with major aerospace companies such as Boeing, and key partnerships with major military departments. Throw in Toby C and his prior connections in the aerospace industry through his association with SMN ... and I can begin to understand why they are pursuing aerospace and military so vigorously, at present).
3) Finally, CFO over the past 6 months has been drilling home that they anticipate demand for CFOAM to greatly outstrip their production capacity in the near term. In fact, CFO in their quarterly update suggested some form of capital raise or alternate funding source may be needed to be actioned in order to finance a new production facility. Well, I don't think we need to worry about a capital raise: "... use TRL's expertise in seeking alternate funding sources for the expansion and additions to the Company's production facilities." I'd presume "alternate funding sources" to be government grants.
I also love how TRL is acting as a seller of our CFOAM product. Indeed, "TRL is experiencing rapid sales growth through its tooling subsidiary, TAC, where almost all tools manufactured and sold are constructed entirely of CFOAM. Presently the demand is averaging 500 - 600 cubic feet." I'd presume we are selling the CFOAM pellets to TRL, or at the very least are getting a sizeable clip of all CFOAM sold in manufactured tooling by TRL. The fact that this demand is expected to "double" and then "increase six-fold" per month, in the medium is also very re-assuring.
Finally, I'd like to remind everyone that SMN lay dormant at $0.02 - $0.10 cents for 5 years. Momentum picked up when Drake Investments started buying up shares; but the share price didn't make it's move from approx. $0.40 cents to highs of $3.00 for another 6 or so months. Patience is the key here.
To be balanced nevertheless; whilst today's announcement was fantastic and may have experienced a minor re-rate if not for the macroeconomic climate today which subdued this movement; I believe that we will only start re-rating to SMN type highs when: 1) the companies we are working with are announced - i.e. the aerospace company, which could be Boeing or the European railway company have their names published, 2) when we start getting pre-orders figures announced so that we can understand the value accretion possible, or 3) when we actually begin pulling in revenue through signed contracts.
Finally, I'm not much of a TA expert ... but I found a TA site that published an article two days ago, which shows that 3 out of the 4 major indicators which determine whether a company is overbought or oversold are currently screaming that CFO is
oversold. Article below:
http://www.concordregister.com/unusual-activity-spotted-in-cfoam-ltd-cfo-ax/
Anyway, that's my two bobs worth. Will be buying at these levels once I can free up some funds.
