Conversation with CEO JAN TELANDER
I called (248) 805-3652 - the number listed on SEC Forms.
First off, he picked up when I called. This man is dedicated to this company. Spent a whole hour with me on the phone and answered every single question. I dont have it all word for word but do have several of the important answers he gave me.
Q: Ive been looking into this company for some time. You seem to have quite the background. How did you enter into this endevour?
A: I am originally from Sweden and lived 38 years in Spain. I was a developer there and built over a thousand homes. Whats interesting about that is Mexico is run very much like Spain was when I lived there. The nuances in law and practice are very similar. An investor let me know about these land owners in Mexico, and thats how this began.
Q: Looking back at YTD I see alot has changed. Company name, debt reduction, acquisition, definitive agreement. Is this the end of change or just the beginning?
A: This is just the beginning. We wiped over $600K in debt in return for Preferred Shares. I am very happy that went through as it was great for the balance sheet. I want nothing to do with toxic financing, and that is over. It allowed for the $5M line of credit we signed later.
Q: What can you tell me about how you see the assets being monetized?
A: What we have essentially setup here is in effect a loan/profit share agreement. We cannot own land in Mexico if we are not Mexican. The $300K bought control of 300 acres. I estimate those 300 acres will be sold in the next couple of months. I also estimate that we can turn a 50% profit on that $300K to $450K. When we find a buyer (5 or 6 interested parties) the first $300K in the sale is returned to us and the remainder is split 50/50 with the land owners. I estimate the land is worth $600K in total and after receiving the $300K back we would split the remaining $300K with the land owners and have $450K left in total.
Q: That sounds like a great return in a few short months. What about all these thousands of acres?
A: There are 1900 acres that we are currently drilling on and obtaining "water rights" to. In Mexico you dont own the water. MEXICO does, but you get lifetime use with gov't approval. The drilling is showing us that there is a lot of water underground. This is great for us as it is good for a large farming business to lease. There are 2 scenarios possible, but I think 1 or maybe 2 companies will come in and lease all the land in one shot. There is great demand for good land with water. The climate is perfect for growing many things. These companies are not looking to buy this land, they are looking to lease it. 10 years at a time. I estimate the value of leasing 1900 acres at between $4-5M a year to US after splitting with the land owners.......
Q: Ok I guess the magic question is what is the cost of these 1900 acres, and where will that money come from?
A: The 1900 acres will cost roughly $2.3M. This will come from the $5M line of credit. The line of credit is good for 3 years.
Q: Just want to ask one more time in case I am mistaken. You are obtaining control of 1900 acres for roughly $2.3M and the return on that sum is $4-5M a year and that is expected to be a 10 year lease?
A: Yes, there is certainly alot of work involved drilling and cleaning the land. Clearing title is also part of this. The landowners are mostly in debt, and not all have clear title. This is being resolved.
Q: There will still be millions in the credit line. Are there other opportunities like this out there?
A: Yes there are many land owners in this situation. Plenty of growth there.
Over an hour later I was glad I called. I will be loading here.
INVEST WISELY
AI
