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Re: jealmc79 post# 257514

Monday, 04/03/2023 9:28:22 AM

Monday, April 03, 2023 9:28:22 AM

Post# of 277919
There is something I don’t understand about the inventory and deposits shown on the 10-K.

First, there is no indication of what kind of inventory they are valuing at $6,580. If that is silk valued at $100/kilo, that implies 65 kilos of silk on hand. But it occurred to me that their inventory could include things like reagents, reams of paper, gel, dried mulberry, pipettes, pretty much anything the lab and Prodigy need to use in their operations. Can we be certain that this inventory is silk?

Next, they have a deposit of $98,480 paid “as a deposit towards the purchase of inventory.” This is shown as a credit: a pre-paid deposit. That is unusual, but suggests a pre-payment to the silk farm.

Adding the two together we have the sum of $105,060. Not a particularly even number, but neither are the other two numbers. Looking over the exchange rate between the Vietnamese Dong and the USD, it works out quite closely to 2,500,000,000 VD.

That suggests to me the $6,580 is really silk, perhaps in the form of cocoons. An approximate price for a kilo of cocoons is $4.50. Dividing current inventory by $4.50, we get 1,462 kilos of cocoons. It takes somewhere between 7 and 10 kilos of cocoons for a kilo of silk. That implies their inventory might be between 146 and 208 kilos of silk.

These figures represent the postulated amount of silk on hand at the end of 2022. The full deposit should have paid for approximately 2 to 3 metric tons of silk thread.

There are a lot of assumptions built into these numbers. The farm may be charging a higher price for the cocoons. The amount of silk per kilo of cocoons may be off. But the numbers are probably off by no more than 50%, likely to the high side.

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