Evaluate thanks for being a great numbers man, numbers don't lie as opposed to many on this board.
I am in real estate and was a former auditor and when I read the numerous posts here I can't help but toll my eyes, someone wants to hang em high that is for sure.....won, feels like the ole West & 1886 all over again.
Lets talk about what Evalute didn't.
I don't know what the 2008 rent per square foot is but commercial rental rates have been going up for the last 10 years and that is a fact. I do not know what the rates were back in 2008 although when lease is negotiated one would have meeting of the minds on the start rate and have built in increases over the term of the lease i.e. the rent is going to go up that is for certain and 7 years have elapsed since the signing of the lease.
It is apparent that this is obviously a non arms length transaction however as smart as Lp is I bet she used market rates back then to support any agreement and that cane easily be verified, so I suggest if interested one goes back to see what rates were back in 2008. Also leases of the sort historically are triple net (NNN) so the monthly agreed upon rental payment will include all of the real estate taxes and insurance and utilities and common area maintenance. One needs to check the lease for said terminology but I would wager it is there i.e. NNN.
When I hear many here say, 7000 sq ft for 4 people sounds crazy. I say where does 4 people come from, and I have never looked at the number of people who will be using a leased premises as a basis for computing rental rates. Maybe only 4 worked there at first but the plan could have been more in the future and you have to think of expansion in long term leases. Yes if only 4 people are going to occupy and use 7000 sq ft that does sound lopsided unless there is equipment going to be installed there or there will be rooms needed for offices and labs and waiting etc. and then it doesn't sound large at all...and what about future growth consideration so that you can stay there as the company expands. But 7000 sg ft isn't all that much considering a typical small home is 2400 sq ft and how many family members will live in 2400 sq ft, well that was the size of my house when me and my wife lived there.
As to the auditing side of me, I am sure that many here are familiar with SubChapter S corps and the technique of zeroing out income to reduce any tax liability. In order to accomplish that the owner would pay as much in salary as possible, pay fees to related parties, charge expenses to related parties, all to zero out income . Could that be going on here, so instead of having an S Corp the same technique is used to funnel as much monies as possible to related parties to enrich those parties, well of course but aren't those related parties putting themselves at risk of lawsuits and breaking the law? An audit will uncover that immediately, in fact any previous audit by a CPA would have uncovered that the moment it was read since that is one of the most visible and easiest concepts to discern, so I highly doubt that has happened since the CPA would not only be liable but vulnerable to shareholders. If you want a good Gresham novel write one but writing it about NWBO at this time or any time is a waste of your time. LP is smart she isn't stupid, these are infantile accusations i.e. you have found no smoking gun here....keep on looking.
AI
