Interups Inc (ITUP)

[MaterialMind]

Of course, that is perfectly fine. And kudos to Laxmi for doing that!

It is just difficult to see this from the outside, and a target window (e.g. quarters or half/full year goals) helps the investor keep their nerves. Personally, I'm not worried (having you hands-on inside the company helps a lot for my personal mental health related to this investment), but there seems to be some anxiety elsewhere. I'm confident this will be resolved soon. It seems so close now. The money is finally in accounts outside of India. Hopefully there's just the formalities in Hong Kong left.

[RealDutch]

I always thought there would be 100M shares, sounds like it will not reach that level?

I don't know how many will be sold to ITUP. But I would use 100M fully diluted into the future. For practical purposes.

But it's a nice crop to get into!

We already have the operational team in Nigeria. There could be another synergy with sugarcane. We have done the exercise many times already. We can complete the feasibility study in a matter of hours. In fact, I already know the result in terms of profitability beforehand 😃

[RealDutch]

Originally, we were supposed to get funding from a big investor last year which would have taken care of the december dividend. That money was transferred but put on hold and investigated. So then we initiated plan B which is comprised of 2 asset sales in India. This has taken its time most of which we don't control. Even the wire now into the US is being delayed by tax documents that need to be filed.

Yes, we should have used targets instead of suggesting fixed dates.

At least the 2nd dividend is planned for April 17 so we will catch up on lost time.

[MaterialMind]

We are close to 76M RISO tokens issued and we should be done.

That is really nice, tbh. I always thought there would be 100M shares, sounds like it will not reach that level?

cocoa plantations

Sounds awesome! I haven't looked into why cocoa prices are soaring. Who knows if it will last. But it's a nice crop to get into!

[MaterialMind]

It sucks that it keeps getting delayed. In the future, I hope Laxmi will set less firm target dates.

If he had said from the beginning, that he's aiming to pay a first cash grant during Q1, at the very latest early Q2. No one would be disappointed if the company already paid in mid January, or February, even March, or as now, the latest target, Early to mid May. I wonder if he does it just to put pressure on himself.

[RealDutch]

We are close to 76M RISO tokens issued and we should be done. Some more will be sold to ITUP at a later stage.

Laxmi has been working on a number of real estate deals, taking this vertical forward.

We are adding a 6th project in Nigeria which will be for cocoa plantations.

For the Aqua team and 200,000 ton RAS project we now have 5 consultancy contracts signed and the team is performing preliminary work.

That is all I have.

[RealDutch]

Apparently Laxmi isn't updating so I will do the best I can.

Laxmi had to stay in California due to some tax documents that had to be filed earlier this week with regard to the $2.59M (+$50M) that is being wired into the US. The 2nd reason why he won't be traveling to Hong Kong until this weekend is due to the holidays when banks are closed.

So, we are now looking at banking being set up in HK between April 2-9 and the first dividend to be paid on april 9 or 10. And the second dividend by April 17.

[karlacorn3]

Dear Laxmi/KD. We're within 24 hours of the 7th date adjustment for the initial payout. We're within 3 weeks of the second date for the second payout. Respectfully, it would be good to receive confirmation/intent.
Thank you,
K

[karlacorn3]

Material, we shall see. Two days away from another due date. 🤐

K

[MaterialMind]

Right now...


Hopefully in a week or two...

[karlacorn3]

Three days out. Looking forward to it.
K

[RealDutch]

Million, Snow 😄

[snow]

RD "after they file the tax document that will free up the $2.59 being transferred into the US account." Free up 2 dollars????

[RealDutch]

Already asked Laxmi to give an update. He said he will do it soon, after they file the tax document that will free up the $2.59 being transferred into the US account.

[karlacorn3]

Dear Laxmi/RD. Is all confirmed for the payouts on March 28, 2024, and April 17, 2024?

K

[RealDutch]

Get real, Karlacorn. There was no reason for Laxmi to travel to Hong Kong sooner because the money wasn't available until recently. It was a lenghty process, from asset sale, to getting it approved and transferred out of the country. It is a bureaucratic nightmare, most of which we cannot control. But the money (most of it) is in Hong Kong now coming out of Escrow soon.

[karlacorn3]

I'm not criticizing. I'm stating facts in observation. And you're absolutely right, it is "as SIMPLE as that"... yet not executed. It's very disappointing to hear that such basic logistics are not completed three days before the most recent of many promised dates, and three months since the initial promised date.

Especially in a start-up (which I have launched 3), efficient execution of basic business practice and communication are essential.

I hear the retort of hard work and sweat. Yet despite so many promises going back to Lavasa, Airlines, ect, I don't see bankable results.

Waiting with a bit of frustration,
K

[RealDutch]

He has to set up banking (authorize certain individuals) in Hong Kong. Simple as that.

It's easy to criticize the company. But all startup companies struggle big time. There are no exceptions. However, you won't find a single one that sold off assets, repatriated the money, and paid dividends from it. Like we are doing.

[karlacorn3]

Another date change after multiple confirmations. How may changes now, dating back to December??

I've never heard of a transaction needing to have its initiation point follow the geographical movement of an individual. I, as have many, have been in business for years. Never have I seen such (the operational occurrences here are no were near business norms)...

We continue to "cheer" the promises, and pin hope on failed deliveries (an undisputable fact).

Somehow remaining hopeful receive my money back,

K

[RyNo_23]

Rgr that, thanks for the update.

[RealDutch]

In his latest update, Laxmi has informed us that he has to stay in California for a couple of days to take care of some things.

He is flying to Hong Kong on friday to set up banking there.
The dividend payout is now planned for March 28/29, out of Hong Kong.

[karlacorn3]

👍️Thanks. This will be a significant milestone.
K

[RealDutch]

Yes. Planning to pay it out of Hong Kong as that is where currently most of the money is, in Escrow, for doubling and dollar matching. There is 0% withholding tax in Hong Kong.

[karlacorn3]

Dear Laxmi/RD. Is everything on track and assured for the most recent scheduled (March 22, 2024) dividend distribution and receipts?

K

[RealDutch]

You haven't missed his response, K. Because there wasn't any.

[karlacorn3]

Dear Laxmi, I may have missed your response to the question?

K

[snow]

Dear Laxmi,

Thanks a lot for all this detailed information. The gist for me as an investor is that profitability should be very good. Margins are expected to be so good that they would be good evgren if margins were significantly narrowed. A crucial point is that with good profitability growth should be very fast since much of the profits will be reinvested in rice. It is also very nice to see that two of the verticals advance the progress of each other. My bottom line is as it were: I AM VERY IMPRESSED.

[palaypu0406]

Dear Snow,
We will be placing 1000 Metric Tons 1121 Grade Basmati Rice - Golden Sella Pesticides Free Rice Order with a Firm in Karnal Haryana India.
We will release this order after our discussions with the Banking Group in Europe that is actively willing to distribute our Fractional Asset Tokens.

Price is finalized for $1,089/Tons FOB Mundra Port Gujarat India
Delivery in 5 Kilo Bags
Minimum Grain Length 8.40 mm
This is the finest quality Pesticides Free Rice....

The Indian firm is requesting that we place this order before the end of Indian Financial Year which is March 31, 2024. And given that our cash flows are getting readied and we are meeting the group in this month, we do plan releasing the order this Month, before the month ends. If any delays, for sure before the 10th of April.

One important point that we are investigating is the ratio of rice we should use internally for our food carts business and externally as subscription base selling.

Our Final Cost including distribution is around $6.65 / 10 LB and we plan selling it for $1 per LB -- Prevailing market rate in US at all stores is $12.80 to $15.00 and as regular consumption, our price is expected to make a huge difference. Selling at $1.00 per LB we gain 3.35/6.65 as our Gross Margin => 50.38%. But, if we consume internally on food carts introducing eatable rice for $1.00 per Bowl of 200 grams $1.50 per 300g, cost of sourcing rice is just $0.147 per 66.67g of uncooked rice. Assuming a final cost of $0.333 per 200g of cooked rice & $0.50 per 300g, we have a clear margin of 200% if we use the rice internally. Plus if the same rice is used for selling the most popular Biryani Rice Bowl, margins are even better. Not just the pricing advantage, even inventory turnover is at least twice a day if its food carts vs weekly 10 LB consumption pattern, if sold subscription based. Also the inventory consumption if through food carts will shoot northward 10 times...to serve 1 Million meals on a daily basis. Over a period our goal is to make people simply stop cooking rice....

1 Million meals will consume 100 T of rice daily and this means 10 days to cycle 1,000 Tons Inventory with 200% value addition each time we circulate meals on a daily basis vs 50% we get on direct rice selling as weekly subscription to consume the same 1,000 tons inventory.

This said, we do have to sell some rice at least to the consumers -- probably we use 75;25 mix to optimize financial compounding and stabilize our brand in the minds of people.

Will further update by this month end, Snow!

[snow]

RD One question I forgot to ask: When is the first purchase of rice in india expected to happen?

[RyNo_23]

Very nice update, Laxmi.

Thanks!

[palaypu0406]

Thank you Snow,
Its all of our wait and a moment for celebration...

The team's responsibility and that of mine now multi-folds as we need to use every dollar of this availability in the wisest means...
Fortunately we do not require deep inventory pockets but a strong distribution network...and our signing up with European Bankers group will propel this distribution heavily... and we will replicate the model in every geographic region we are planning to focus...

Cash availability will improve solidly with
(a) Growing investor interest and
(b) Gross margin realization out of every sale...
(c) Management Fee share month on month...

More as we keep progressing,

Sincerely,
Laxmi Prasad

[snow]

Dear Laxmi,

Excellent news! I hope you will have a nice and productive trip to my part of the world - Europe.

[palaypu0406]

Dear All, Cash grants will be paid out on March 22, 2024 and eligible receivers should see wire credits on 3/25. I will be in Amsterdam at that time -- meeting a few from European Banks on token underwriting and distribution -- Will celebrate the occasion with our team based out there...

[RealDutch]

True.

[snow]

RD I see better than before the calculation of 10 dollars now for the RISO tokens. It may be some sort of compromise between potential and various kinds of things that may go wrong. I think it will be a lot easier to see what is realistic to expect at the end of this year based on experience than to calculate before the real business is in progress with all its aspects.

[RealDutch]

We have calculated it several ways now. I already told you I have seen numbers of $78 per token (for 12 cycles) and $240 for 15 cycles per year.

We calculated it ourselves and determined $117 may be fair value. Which is in line with the other estimates.

This is all subject to certain conditions of course.
And there is always a degree of uncertainty.
We also said they will probably be valued at $10. Today. Or close to that.
I think you can see why.
Let's leave it at that.

[snow]

RD Here you assume that all the profits are reinvested and that the growth rate is several hundred percent. But I agree that a p/e ratio of 20 is too low in this type of situation even if the growth only lasts for 3 years. I have no idea what is a fair p/e ratio here. I assume it can fairly easily be calculated.

[RealDutch]

there might be a profit for our series of tokens of let's say 1.5 million dollars from the first cycle. Let's assume that profits for the whole year will be 15 times this number or about 22 million dollars

The proper way to calculate this is 10 x 1.15^12 if we assume 12 cycles (conservatively) and $1.5M in profits.
= $54M. Or a profit of $44M or 440% growth per year.

A P/E of 20 applies to an annual growth rate of 20%. You get a much much much higher P/E for 440% growth. Let's assume a P/E of 440.
But you can't use a P/E of 440 if that growth rate only last for 3 years. So let's use a P/E of 200 instead. That should be ok.
200 x $44M = $ 8.8 billion
$ 8.8 billion / 75,000,000 = $117 per token.

[snow]

RD I thought that the 10,000 tons was the target for the year be it 2024 or the first calendar year. If the price at which the rice is sold is 40% higher than the price at which it is bought there will be some big "gross profit" to cover expenses and to be shared by the owners of the two series of tokens. Of course my numbers will be way off it the first cycle means about 10 times as high volume as my numbers are based on. If we assume a 10 million dollars investment which is sold for 14 million dollars, there might be a profit for our series of tokens of let's say 1.5 million dollars from the first cycle. Let's assume that profits for the whole year will be 15 times this number or about 22 million dollars for the whole year. Assuming a p/e ratio of 20 because a quite high growth rate is anticipated that would mean a total value of the tokens of 440 million dollars or somewhat more than 4 dollars per token. I now better understand your and Laxmi's optimism. The potential is clearly high but very often things don't work out as well as projected.

[RealDutch]

Snow, the 40% margin that I mentioned is on the trade. ie buy/sell. As it will dictate the growth rate when resinvesting the profits.

The 10,000 tons rice is the target for 1 cycle. It's only a $10M investment.

Laxmi believes we will have to reduce inventory after the 3rd year. Because we will grow too fast.

[snow]

RD When it comes to margins I wonder if you forget that there are two series of tokens according to a previous post. Our tokens will have revenues from running the business + one third of the profits after the owners of the other series of tokens have had 8% percent annual interest + two-thirds of the profits. Our share of the profits cannot possibly be anywhere near a 40% margin in relation to the gross margin fetched by the sale of rice?

[snow]

RD Thanks for very interesting information! I don't know if your numbers are based on a full calendar year or 2024. My calculation was based on the former assumption and implied 1000 tons times 12 which is 12,000 tons. When profits are reinvested growth should be very fast and value per token more than a dollar after the first calendar year.

[RealDutch]

Most of the profits will be reinvested. Also, margins are much higher than your 10%. As high as 40%. Also, we are targeting 10,000 tons of rice for the first year. This is a world of a difference compared with your numbers.

[snow]

RD I got the impression some months ago that a relatively flat sum of money will be remitted to the owners of our tokens and the remainder reinvested. If that were to be the case the growth rate would be fairly modest initially but gradually increase as the remittances would represent a decreasing part of the profits. In your case with 1000 tons of rice initially and based on prices I have seen in shops I guess the rice might have a value of about 3 million dollars or perhaps a bit less initially. If we assume that the profit rate had been independent of volume and we assume a profit margin of 10% here too, profits would have been 300,000 dollars for the first cycle. If we assume that no profits had been reinvested but remitted to the holders of the tokens and we also assume 12 cycles accumulated profits would have been 3.6 million dollars. If we again assume conservative p/e ratio of 10 and 100 million tokens the value of each token would be 36 cents. In this case 12 times 300,000 dollars would have been remitted to shareholders and remittances and the value of all the tokens at the end of the year would have been 72 cents per year. In my view these are encouraging numbers. They suggest very good value for the holders of the tokens even if no profits had been reinvested and therefore no growth.

[RealDutch]

I have seen some numbers.

If we reinvest the profit after every cycle then you get exponential growth.
If we start with 1,000 tons of rice then the RISO tokens will be worth $78 after 5 years when doing 12 cycles per year.
If we cycle it 15 times per year then the tokens will be worth $240
So you can see how fast it goes up when the cycle rate increases.

We have the same principle and result for SWIM Gold.

So, there are many factors to consider.
How much can we start with?
How many cycles do we get per year?
How much physical supply do we have?
Can we maintain margins?
And all these things will determine the result and token value.
Let's leave it there.

[RealDutch]

I was too quick 😃

[RealDutch]

Almost done. We will be close to 60M RISO 👍️

[RealDutch]

Yes, we will have good growth on the volume side and profits per share. Probably more than you think.
We already have a supplier and 30% margin. So 20% longer term is conservative already.
We are getting ahead of ourselves. I will get some numbers from Laxmi today. Perhaps we will share some later.

[snow]

RD I sometimes mix up dollars and Norwegian crowns when I do my calculations in my head. 480 million dollars would be the right number. It also struck me that 12 cycles was more realistic in this case. 10% profit margin was an attempt to be conservative on my part. What surprised me that you assumed that there will be no growth. I assumed that the other series of tokens would not distribute all the profits and that part of it would be retained and would result in the purchases of rice gradually increasing. That woud result in a gradual increase in the distribution to the owners of the other series of tokens too.

[RealDutch]

That would mean a market cap of 4.8 billion dollars or a value of each token of 48 cents as far as I can see.

$48. Not 48 cents.

Certainly not far-fetched. But I expect 12 cycles per year and margins in the 20% - 30% range in the long run. That is why they call it SWIM (Systematic Wealth and Income Multiplier). You shouldn't use a P/E of 20 though. I would use a P/E of 10 because there is no growth.

For all the verticals combined we expect to be a $100 billion company in a few years.