Specified Level of Production
So I wake up early & decide to find the supply agreement & level of production required to avoid a shortfall payment.
& after digging through SEC reports back to early 2005 I find that in every report I scanned through the Specified Level of Production is never referred to as a number, only as specified level of production.
So the question is still what is the specified level of production. According to a recent report the agreement was modified to:
The Supply Agreement originally provided for a contingent short-fall payment obligation up to $8,700,000 by the Company if a specified production level was not met during the one-year period from September 1, 2006 to August 31, 2007. If a contingent short-fall payment was accrued after such one-year period, it could be reduced by the amount by which production levels in the one-year period from September 1, 2007 to August 31, 2008 exceeded the specified target level of production, if any. The short-fall payment is based on a formula that calculates the payment as follows: ((required pounds shipped - actual pounds shipped) / required pounds shipped) * $8,700,000. In November 2006, the Supply Agreement was amended so that the short-fall payment obligation would not be measured until the one-year period from September 1, 2009 to August 31, 2010, and the target level of production was reduced by approximately 22%.
So the target level of production is now 22% less than the original specified level of production.
But what was the original specified level of production?
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