BLT - Blis Technologies

[simla]

Since we're discussing where to go in the future with this, a few thoughts:

You remarked a while ago, Chippie, that this might be a once in a lifetime investment. I agree. For myself, I have only had three really satisfying investments in my whole life (not that I have spent my life devoted to good investments) and this is probably going to out-do the other two by miles. There will be anti-climax afterwards (if it works!), but we don't want to end up like those child stars who sadly spend their lives trying to relive the thrill of something that frankly they were simply plain lucky to get in the first place. (Emearg, I think I can hear you saying something about counting eggs... quite right.) So, if this works out as well as we hope, let's just enjoy the ride and not get too hung up looking for the next one.

Secondly, the future of Blis is still going to be heavily affected by the current outlook. When the market slumps currently, the Blis price hardly has anywhere lower left to go. But once it succeeds, it could start going up and down like a yoyo. Look at the recent dramatic slide of dairy-related shares on the NZX, for example. For myself, I think the next few years are going to see some wild rides generally, regardless of the current warm glow. Many obviously think such a wild ride might happen again this year. Whatever, as Blis goes up, the market's ups and downs are likely to be distressing for the Blis price. It's already going up, so that could start soon.

And thirdly, because I'm not expecting a repeat of Blis any time soon, I expect to salt away any rewards into a more conservative rainy day fund. The seven fat years and the seven lean years, so to speak.

Just some thoughts.

[Chippie]

Hi Simla
Yes, BLT is very interesting I have followed them forever.
• 7 years ago I brought 1K BLT at 60 cents then watched them go downhill steadily.
• A few years ago I thought they looked promising again and picked up 200K at around 9 cents.
• Approx 12 months ago I decided to cut my loses and sold most at 7 cents.
• Recently I decided that Barry Richardson is taking the company forward and they are finally starting to actually deliver on the story. I bit the bullet and picked up as many as I could afford between 3.6 and 4 cents.

If it does come off then the upside potential is huge. The market valued them at 95 cents 7 years ago based on a promise. Currently 8 cents a share looks a steal when the promise looks like it has a real chance (or at elast some chance) of becoming reality. It is an all or nothing opportunity which is the only thing that stopped me getting really silly on how many I purchased. Obviously believe in BLT/ Barry and consider the upside risk significantly higher than the downside.

The challenge is the NZ market where very few investors are interested in the likes of BLT. So it will probably stay low until they announce a dividend (hopefully) until then, who knows? Probably most likely that an overseas investor will takeover the company for peanuts (what normally happens with any decent NZ company)

[simla]

Chippie, I so agree about keeping NZ success stories in NZ ownership. If there is one lesson that leaps out of the last 25 years, it is the high cost NZ is now paying for losing control of so very many of its money making ventures. What state would NZ be in now if we had sold off our agriculture industry too? Nobody ever talks about the balance of trade issue, but it just hangs around NZ's neck, and the vast bulk of it now seems to be the so-called invisibles, which are mainly caused by overseas interests taking a clip on so many of our high volume activities. Everybody is so busy being "better off investing overseas" that nobody seems to notice the huge ongoing cost we all assume by abandoning our own companies.

I just so wish NZers could learn to HOLD ownership of things long term. Why don't we just sell all our houses overseas and then all rent? You'd think we would all be better off doing that to judge by how NZers treat all out other assets. Our economists here are always swearing that "models show" that we are better off with overseas investment. Pity how reality is working out. Those models assume constant good times, when we always make more profit than the service costs of the associated debt. In reality, we have lots of down times too, and then the overseas ownership costs just keep mounting like credit card debt. At first it doesn't seem much, but the cost just keeps mounting over time.

Which is one of the reasons that I say people should plan on holding the Blis shares they have, and also to PLAN to keep holding them long term. The big multinational companies have all the cash because they keep ownership of things that are doing well, while real live people are so often lured to sell out by the short term "offer I couldn't refuse". Well, the same strategy works for individuals - if it's a good investment, hang on to it. If the buy-out price is so unbelievably good, then why is the other guy offering it? Warren Buffett and Bill Gates are famous for buying and holding long term, and it doesn't seem to have done them any harm. Long term wealth has always lived off the income and handed on the capital to the next generation. But NZ as a country has been doing the opposite for a while now. Everyone is constantly moving their capital around, and risking it, in the belief there is a better story around the corner. But if constant capital gain is so effective, why is NZ constantly slipping downwards?

At present, it would appear we might assume maybe 25% of Blis is owned by NZers longish term (assuming the option is exercised). The rest is presumably mostly owned by NZers too, but what is the time horizon? Everyone has got their own situation, of course, but it would be great if most could recognise what we've got and plan on holding on long term. Tell your heirs everyone!

[simla]

ps. The other reason I expect to hold long term is that the business model of Blis, and the maths underlying Blis, and the truly useful nature of the products of Blis, all add up to this being a share that currently - just from my own judgment - I cannot currently actually imagine a time when the share price will exceed the long term cash flow of the company. When I first bought Blis shares, I thought this might be a 5 or 10 year investment. But now the structure of the company looks like this may very well be an excellent candidate for a very long term investment. Nobody can read the future, of course, and particularly we have yet to firmly establish market acceptance of the products. However, you'll gather my optimism is in full strength, and then some.

As an illustration, commercial toothpaste as we know it hit the market around 1900. Who wishes they had bought shares in 1900 and sold out in 1905?

[simla]

Shall I drift back on topic then! I'm sure many people, quite legitimately have different views to what I've just said.

The share price might be fun to watch this week. There was surprisingly consistent buying pressure throughout last week.

[emearg]

It was a good AGM presentation as noted by others and the share price increase of late. I am glad I bought quite a few in the weeks before hand, and took up my rights plus some. The writing was on the wall for things improving significantly. Now there is even more writing on the wall but considering the current market cap(including converted preference shares) I can't see the share price increasing much over the next few weeks. The half year result will push the price up or down depending on the numbers.

The negatives(IRELAND and Aussi) weren't a huge suprise.

There wasn't any mention of their progress with their additional outsourced manufacturing?

A few more articles(the first is more significant given it's audience):
http://www.nutraingredients-usa.com/...obiotic-market

http://www.stuff.co.nz/the-press/bus...ste-of-success

Simla. Have you tried/had any luck finding the additional products that are out there but we don't know about yet? We know about four, but I gather there are six? Fancy a challenge??!??

[simla]

No, I was stumped about the 6 SKUs, too. Maybe it is Epoca and M18 that we know of. Or maybe Breezecare or Aktiv-K12 have new products, as I haven't followed their product range. Or perhaps in other languages. Or maybe manufactured but not for sale yet. Or perhaps an inhouse brand not on the internet.

I'm not really searching for products much, as we already know there is momentum. I would like to see the M18 though, to see the sales claims. As for a challenge, I had wondered if you would look at the science of M18 to tell us how compelling a sales case it can make, since you seem to enjoy the science reading. I look forward to seeing the food products too, and would guess yoghurt will be out first, and maybe in Australia or Japan. That feels like a highly saleable product to me.

Tell you what though, Blis have given us a good object lesson in the difference between marketing and sales. The classic definition of marketing is building on your relationship with customers. I couldn't see that that could be done at this stage with just one product and basically no actual customers, but Blis have quickly built on the K12 market already with M18, at the very least. They have also been building on their relationships within the industry.

In fact, I said a while ago that Blis were now a fully fledged biotech company. But I'm not sure they aren't transforming into a marketing company, Colgate-Palmolive like.

[emearg]

As for a challenge, I had wondered if you would look at the science of M18 to tell us how compelling a sales case it can make, since you seem to enjoy the science reading.

Enjoy? No not really. Understand? No, not really! ;-)

Like you I read the patent app for M18. Reading such material helps to broaden ones understanding of the possible uses of the probiotics. The more we know the better but the reading is hard going.

Blis have always had at least one good product but up until a couple of years ago they didn't have anybody that was capable of thinking the way that is necessary to do the product justice. Barry has a history of delivering the goods in the dairy industry and so far is doing an excellent job with the Blis probiotics. I am quietly confident that what we are seeking now is just the start. I am expecting things to start snow balling, mainly because of the Frutarom relationship. They have people, and they have those people in many many countries. That is resource Blis were never going to be able to afford on their own unless they got big, and they were never gonna get big enough on their own. Chicken and egg stuff. Haha, I seem to like mentioning eggs don't I? Actually, the old saying of an egg a day keeps the doctor away comes to mind, but I have modified it to a K12 tablet a day keeps the doctor away. Over time this will do doubt change to a product containing K12 a day keeps the doctor away.

Like you Simla I have no intention of selling BLT anytime soon. If things change and things start going down hill then who knows. As long as Barry hangs round and keeps delivering the goodies selling seems to be rather a stupid thing to do unless one needs the cash for other (non investment) reasons.

The most informed group about Blis is Barry and the board, and our recent underwriters. They know the most, and they have all stumped up considerable cash. To me, that is an excellent reason to relax for the next couple of years (as they have enough cash to survive it) and see what happens. As previously noted I am eager to see the full year results to be announced half way through 2010 as it will be interesting to see how much of the progress turns into revenue.

One question I have is how are the preference share dividends going to be paid? Will be paid in cash or in the issue of additional preference or ordinary shares or something else? Thoughts??

[foodee]

Enjoy? No not really. Understand? No, not really! ;-)

Like you I read the patent app for M18. Reading such material helps to broaden ones understanding of the possible uses of the probiotics. The more we know the better but the reading is hard going.

Blis have always had at least one good product but up until a couple of years ago they didn't have anybody that was capable of thinking the way that is necessary to do the product justice. Barry has a history of delivering the goods in the dairy industry and so far is doing an excellent job with the Blis probiotics. I am quietly confident that what we are seeking now is just the start. I am expecting things to start snow balling, mainly because of the Frutarom relationship. They have people, and they have those people in many many countries. That is resource Blis were never going to be able to afford on their own unless they got big, and they were never gonna get big enough on their own. Chicken and egg stuff. Haha, I seem to like mentioning eggs don't I? Actually, the old saying of an egg a day keeps the doctor away comes to mind, but I have modified it to a K12 tablet a day keeps the doctor away. Over time this will do doubt change to a product containing K12 a day keeps the doctor away.

Like you Simla I have no intention of selling BLT anytime soon. If things change and things start going down hill then who knows. As long as Barry hangs round and keeps delivering the goodies selling seems to be rather a stupid thing to do unless one needs the cash for other (non investment) reasons.

The most informed group about Blis is Barry and the board, and our recent underwriters. They know the most, and they have all stumped up considerable cash. To me, that is an excellent reason to relax for the next couple of years (as they have enough cash to survive it) and see what happens. As previously noted I am eager to see the full year results to be announced half way through 2010 as it will be interesting to see how much of the progress turns into revenue.

One question I have is how are the preference share dividends going to be paid? Will be paid in cash or in the issue of additional preference or ordinary shares or something else? Thoughts??

Emearg
Just out of interest - what is the 'life' of the patents.

Cheers

[Glendoonie]

[quote=foodee;268236]Just out of interest - what is the 'life' of the patents?/quote]


The term of a patent is 20 years, but It is possible to receive time extensions equal to the amount of delay. Reasons for "delay" comprise

• Delayed response to an application request for patent.
• Exceeding 3 years to consider a patent application.
• Delays due to a secrecy order or appeal.

Most patent attorneys will use any and all reasons to receive these time extensions as there is no disadvantage to their client - the applicant.

Cheers

G