Hales breaks down Consulting FeesMorning again: I don’t even know if CB is a consultant.
The thing that makes me nervous about speaking about this stuff is we don’t understand it. With regard to my painting business, for example, roughly half of what I charge makes it to my (personal) bank account. The rest went to materials, paying for my truck etc etc. People on the outside don’t realize that.
(So here I go blundering around in Orcy’s bookkeeping!)
Looking at their financials, it seems obvious that most (possibly all) of their so called debt is really deferred wages. They are taking a bit out in stocks, a bit in cash, but most of it just keeps on growing.
Rene and is wife are closely scrutinized, because they have such a large share, but I find it virtually impossible to track down most of the others.
I really doubt Peter Gardner “consults” often, but (sorry I have to go by memory for the moment, I’ll correct it if necessary later) I think I saw a notation to the effect he charged $7,000 a month while President. There was another to the effect that Wayne Hansen gets a $100,000 bonus if the Chinese factories go up. I expect this is a “finder’s fee,” as Orcy took the project over from him.
What I can see, is that in 2004 there were 22 consultants who charged EAPI $714,081. When Orcy started up, and these guys started flying all over the place making deals, the consulting fees jumped over by two million a year. They’re now paying over 3 million a year. There were ten “related” consultants (i.e. somehow connected to the company) in 2005. The same number in 2006. I haven’t found a number for 2007.
While this may seem like a lot of money, let’s look at against one project: The 42 plants in Chongqing. The terms, cited in the August 17 2005 newsletter:
“The Chongqing Group will obtain the land, all permits, a 25 year guaranteed waste contract on a put or pay basis to ensure facility profitability, and a guaranteed letter of credit to purchase the facility from Organic Recycling at cost plus US$2.5 million following three months operations.”
I haven’t seen any recent figures for Orcy’s “debt,” but guesstimate it is probably close to the equivalent of 8 factories.
Most of Orcy’s negotiations seem to involve multiple factories and they seem to be trying to sell their expertise rather than run the factories themselves.
If you’re worried about their intentions, this would seem to reinforce the idea they are serious. Think they could make too much money? This is really out of my depth, BUT how do people like Bill Gates get to be billionaires.