Let's revisit the equipment deal........Hey “divot111”,
On October 3rd when I said “I see you are
still not bothering to read things properly.” I was referring to
your post about
“Naturally Splendid Signs Letter of Intent to Acquire Packaging Equipment”.
Today you state:
“They have packaging equipment to pay for remember?” So what I ask???
*****
I would suggest you go back and carefully read the news release to understand what it says:
1.
Pay to ERSF $100,000 in cash or shares, at the sole election of Naturally Splendid, as follows: (A) CAD $50,000 on or before 30 days from closing of the transaction and (B) $50,000 on or before six months from closing of the Transaction. So with a PP of $ 4 million rumoured to be oversubscribed the $ 100k cash payments are certainly not onerous. On the other hand they could just issue shares ERSF may have even chosen that option; but then some would whine about dilution.
2. The parties have also agreed to enter into a service agreement whereby Naturally Splendid will provide packaging and storage services to
ERSF for a period of three years and ERSF will commit to a minimum monthly amount of $14,500 per month over that period. So NSP will receive $14,500 per month
3. Under the Lease Agreement, Naturally Splendid will be required to make monthly lease payments of $9,765 until May 2022.
So NSP will pay out $9,765 per month.
4. For the first 3 years of the
assumed lease payments NSP will receive $4,735 over the lease payments as a contribution to the costs of Naturally Splendid providing packaging and storage services to ERSF for a period of three years.
The new warehouse currently has the available space for both the packaging and storage services without incurring additional rent(unless the landlord incurs the cost of leasehold improvements to accommodate the packaging equipment). So over and above the leasehold improvement costs NSP will only have additional operator, electricity, equipment maintenance, etc. costs.
5. However: Naturally Splendid VP of Operations Bryan Carson states,
"The acquisition of this packaging line has many potential benefits for the Company. We are able to control inventory and costing much more efficiently, which can translate into increased margins. Delivery schedules become more manageable allowing the Company to aggressively pursue additional retail clients. As importantly, when in control of our own packaging, we are able to launch additional product lines far more efficiently and can test new products more easily. There is also ample opportunity to provide packaging services not only to ERSF, but also to a wide variety of companies opening up a potential additional revenue stream for the Company".
Looks to me like Goodwin & Carson continue to make good decisions IMO that will grow the company in spite of what a few “keyboard warriors” have to say.
*****
“Living in the sunshine”
Always DYODD
DKM