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enzymesarecool

01/06/10 12:00 PM

#7559 RE: wadirum1 #7553

Wadi - re: manufacturing revenue sharing

WOW needs a manufacturer for their 2nd generation products.

Their first generation products were manufactured by EESO and there was a stipulated markup on them in that contract. Why give away part of your profit? Move this inhouse and keep the markup.

With 2nd gen products, they can also stipulate a profit to be made by GRBG on manufacturing - trasnfer pricing within an organization needs to be done at reasonable prices but can be manipulated to place profit or loss wherever you want. I am guessing they flow some profit through to GRBG but then it gets dividended out to preferreds (Bill, Allie, WOW) as a tax reduced revenue source for them and while they show growing revenue for GRBG, the bottom line remains there is no money or value left at the end of the day.

That's how I see it playing out....but I may be wrong.