GOR 15%
It is a huge MF of a Gorilla because he gets his cut before any cost is taken into account as it is a gross royalty not a net royalty.
So for argument sake say if the money paid for the product is 100.00 JL gets 15.00 of that and the company say incures costs of 50.00 for the product, costs do not make anyone money so a commission (royalty) is paid out of the profit. In reality they are paying 30% of the profit (50.00) in the form of a royalty and the company is getting nothing of value for it.
Just a loss of profit.
If the companies costs go up their profit margin lowers but the royalty costs stay the same.
There is value of buying the value of leadbetter one time in cash as it is a fixed number but a royalty that high that is not variable would seriously cut into profit forever that you could not get away from if market conditions went south.
(profit could get squeezed in bad market conditions but not the GOR.)
If the costs are more than 50% for the product it is even worse.
Costs are overhead as well as costs of producing the goods to market.
Dianor was very desperate to get the leadbetter property to make this kind of deal or at least short of cash to not just make it a payout.
It is a pay now or pay later they out of nessesity chose later and it is now later.
This is my understanding of the royalty, if it is different I stand to be corrected.
leadbetters shares have him on level playing fields with shareholders but the GOR he could give a shirt about SP and shareholders or the company as long as he is getting paid, there is no relation to anyone elses well being other than staying in operation enough to be able to pay him.
Even if we recieved a dividend our dividend would relate to profit the GOR does not.
Anyways Gorilla for sure.
lets hope he is a reasonable person and we can work out a deal or even better than that I hope a deal has been done or is close just finalizing paperwork.
It is what it is at this point nothing new to us.