Nate's Food Company (NHMD)

[LOL]

The $3MM line of credit is for purchase orders ONLY! Where is money for advertising going to come from? Where is money for slotting fees going to come from? It's not really a big deal to get a product into Walmart or Costco when you have to pay for shelf space. How about R&D for the new products? The CEO and his buddy get 7 1/2% of GROSS REVS, so don't expect any earnings actually going to the company, those will all be eaten up way before that happens. The company clearly states they do not want to get traditional loans because that will impact their cash flow, they plan on selling shares instead. This article linked below covers the real costs associated with this business:
http://www.fastcompany.com/1182499/how-one-man-confused-grocers-and-won-customers-canned-pancakes

Additional debt financing would be sought only in the event that equity financing failed to provide the Company necessary working capital. Debt financing may require the Company to mortgage, pledge or hypothecate its assets, and would reduce cash flow otherwise available to pay operating expenses and acquire additional assets.

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=10116626

Payments/Royalty

The Company shall pay a royalty equal to Seven and One Half Percent (7.5%) of the Gross Revenue from the licensed products. Gross revenue is defined as total revenue minus discounts and allowances. In addition to the royalty, the license requires that the Company pay a $7,500 monthly fee beginning twelve (12) months from the execution of the license agreement. Thereby the fee shall begin on June 1, 2015.

Slotting fee


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A slotting fee, slotting allowance,[1] pay-to-stay, or fixed trade spending[2] is a fee charged to produce companies or manufacturers by supermarket distributors (retailers) in order to have their product placed on their shelves.[3] The fee varies greatly depending on the product, manufacturer, and market conditions. For a new product, the initial slotting fee may be approximately $25,000 per item in a regional cluster of stores, but may be as high as $250,000 in high-demand markets.[4]

In addition to slotting fees, retailers may also charge promotional, advertising and stocking fees. According to an FTC study, the practice is "widespread" in the supermarket industry.[citation needed] Many grocers earn more profit from agreeing to carry a manufacturer's product than they do from actually selling the product to retail consumers. According to retailers, fees serve to efficiently allocate scarce retail shelf space, help balance the risk of new product failure between manufacturers and retailers, help manufacturers signal private information about potential success of new products, and serve to widen retail distribution for manufacturers by mitigating retail competition.[citation needed] Vendors charge that slotting fees are a move by the grocery industry to profit at their suppliers' expense.[citation needed]

Some companies argue that slotting fees are unethical as they create a barrier to entry for smaller businesses that do not have the cash flow to compete with large companies. The use of slotting fees can, in some instances, lead to abuse by retailers such as in the case where a bakery firm was asked for a six figure fee to carry its items for a specific period with no guarantee their products would be carried in future periods.[5

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http://en.wikipedia.org/wiki/Slotting_fee