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Wednesday, August 25, 2021 9:42:00 AM
Joe C is not a salesman. He simply had connections with a few local independent beverage distributors.
This is no guarantee there will be any sales much less $30m on a product with no customers and targeting women in the supplement energy business.
I don't see too many women drinking Rock'star'. They are at 'Star'bucks tho!!!!
Joe made a few telephone calls and a local distributor in Denver agreed to carry a product when MSLP gets one but in no way guaranteed any sales.
This is the extent of the MSLP and Joe C joint venture that has guaranteed Joe a salary of over $500,000 (guaranteed $20,000 month salary already being paid) over the contract and 17.5% of the gross margin before any expenses other than cost of product from supplier.
All this for Joe to make a few phone calls to former associates of a handful of local specialized bev distributors.
Don't forget that Joe C was also awarded ~1m shares in a stock option grant too!
Sorry shareholders.
Who is going to manufacture the MSLP energy drink? Ryan can't even pay his current product suppliers and has re-stiffed his largest supplier even after the settlement pretrial.
MSLP is out of cash and sold every liquid asset they ever had on the books. They are now borrowing $1m every few weeks at 25% interest rate just to pay a few of the bills.
Ryan can't even afford to loan the company $1m as he is broke. He couldn't even pay his residential property tax on own house until well after the due date.
Now Ryan is forced to borrow $1m at 25% from the Shylocks.
Wouldn't a credit card even be a better deal for shareholders?
This is a joke.
Just assume there are any sales. Let's do some simple math.
$1m in sales and COGS is say .65 cents = $350,000 gross margin
Out of that $350k, Joe gets 17.5% or $61,250
That leaves $288K and the Shylocks get 25% interest on the whole $1m because Ryan has to pay Joe upfront and we still haven't calculated the business costs.
Interest expense is $250,000. That leaves.....
......$38K left on every $1m in sales. Now subtract Joe's $20k a month salary.
We are already in the red and haven't applied a single business expense yet.
We have calculated ZERO other expenses other than cost from manufacturer, Joe's cut off the top and the interest on the purchase order capital.
There is no scaling cost potential as the costs above are fixed to every dollar invested in the product.
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