Smoky Market Foods, Inc. (fka SMKY)

[Farrago]

Being a shareholder with an active rapport with Eddie, do you know if he has tried financing with other convertible debt operations such as Tangiers? Now they arent people you want to see involved with your stock either but Asher carries the stigma of the worst toxic financier out there for reason, their terms are the most unfavorable IMO. Tangiers are, ummm, better.

No, I don't know. Next time I communicate with him, I think I will ask if there's a certain reason he went with Asher instead of other options.

It was announced about a month ago via PR that "financing was complete" to pursue the next step in the business plan. Since then, nothing concrete produced. I find this is in line with the history of promising real fundamental positives with nothing occurring of the like.

That's not really what the PR said, although there were a lot of folks trying to create some MOMO by implying that the PR stated that. Maybe I'm splitting hairs with semantics, but for me "financial resources in place" and "financing complete" have a lot of differences in meaning. Again, I think that anyone who has taken the time to communicate with Eddie (and assuming a fair amount of faith in what he says) can be hopeful that "non-Asher" financing will be complete prior to the next note, but also should not be surprised if we see another Asher note converted in a couple of a months. Eddie has always been very straightforward with me and others that I know have talked to him...so if we do see another Asher note, it will only surprise the people who haven't made the effort to talk to the CEO.

I understand your point about shareprice not reflecting fundamental value...so maybe my statement about the current share price isn't really valid in terms of analyzing the impact of Asher, but then, in a start-up company, what is there to really judge "fair" market value on except for trader sentiment and future expectation. I mean, "fair" is so subjective, and what is "fair" is what the market is willing to pay (in my really simple conclusion). I mean, "undervalued" and "overvalued" have their place in discussing price, but just like everything else, it's only really worth what someone is willing to pay for it. Anyway, I digress. But your point about fundamentals is valid, and I think all agree that for any long-term sustained increase in shareprice, fundamentals need to change drastically for the better, and we haven't seen that yet.

but only if this Asher financing is truly very temporary

This is very true, and I believe this really is what everything hinges on. Eddie has not always (ok, ever) gotten things done in the timeline(s) that I have hoped for along the way, but I have never felt "strung along" and for me personally, there have been enough positive changes (progress) that I'm still positive about the future and ultimately receipt of funding.

I welcome your opinion on how 3.5M to expand distribution is going to make SMKY profitable.

I too have wondered how the $3.5 million would be a game-changer since it is to be used before and in hopes of securing the big chunk of money to be used for acquisitions. I should ask for clarity on this, and maybe some other longs that have talked to Eddie can lend their opinion here, but here's my perception. (I'm putting a disclaimer on this because this is my own conclusion rather than a summation of what's been explained to me).

I think it comes down to the difference between being profitable and creating revenues.

I don't know the current profit margins and so I can't talk numbers at all, but my general sense is that volume and revenues that show market demand are much more important in the process of securing major financing than showing profitability. The profitability will be greatly increased post-acquisition of the processor, that's pretty clear. So my guess is that maximizing profits is not the first priority in the short term.

For both the Weight-Watchers and Sysco "events," the new business plan wasn't in place. There was no future plan for acquiring the processor and so there was no ability to be sustainably price-competitive.

However, now we know how to greatly increase profits while still lowering costs thru the acquisition. So the missing link is "proving" that there's a market for the product at what will be very profitable prices (even if they're not now). Again, I'm not suggesting that the plan is to sell product below production cost or anything of that nature, and I don't have numbers. But I am suggesting that using $3.5 million to target national regions, hire sales reps, produce products, possibly install a second oven or a full-sized oven, etc., and create verifiable demand for the product would make it a no-brainer to finance the acquisition.

If Eddie can go to large investors and show large repetitive volume, potential for increased market saturation, and a plan to greatly reduce costs, increase profits, and add existing profitability thru an acquisition, I think that's a pretty solid package.

But, I might be wrong. I really could have summed all that up in a couple of sentences, so I apologize for the rambling, it's a bit late. But, again, in summary, I think the focus of the $3.5 million would be to create large-scale volume at prices that may currently be very low-profit, but that would be much more profitable post-acquisition.