CryoMass Technologies Inc (CRYM)

[W_vdm]

Great news from earlier this week: https://cryomass.com/2023/01/cryomass-signs-10-2-million-multi-state-license-agreement/

"Under the terms of a multi-state license agreement, RedTape agreed on the terms to license the patented process and deploy 12 Trichome Separation systems for a total upfront investment of US$10.2 million payable in installments to CryoMass throughout 2023. CryoMass has agreed to deliver the units to RedTape according to a schedule that extends over 24 months. In addition to the installments, RedTape will pay CryoMass 50% of all net revenue generated by the units over the life of the agreement."

First income achieved! $10,2m revenue for the sale of 12 systems and a 50% "royalty" on the revenue generated by these systems.

Bring me to following questions (I'll ask these to management & posts replies here):
1. Sale price per system is $850.000. At what cost can they produce the system? I.e. What will the margins be on a system sale basis?
2. What are the running costs for the deployed systems and who carries them? Installed machinery requires periodic maintenance. When they break down (which will happen at some point), spare parts will be necessary. Is it the customer that carries the cost or CryoMass?
3. What will the revenue be from a single system? Is there an estimation that could let us allow to estimate revenues for Cryomass?
4. What is certainty regarding the revenue? How big is the deviation in yield between a good harvest and a bad harvest?
5. Is there insight in deployment schedule over the next 12 months? Will help to estimate cash flow timing.

The company will need to evolve from a proof of concept towards an enterprise that has a growing production capacity, that can provide maintenance in the field (service agreements opportunity?) and needs to develop further business opportunities (e.g. dealership agreements in other states). When they branch out to other crops, its realistic their R&D division will need to grow as well. Other plants might require specific changes in the process? Many challenges ahead, but a very interesting story!