Replies to post #55455 on Drinks Americas Holdings, Ltd. (DKAM)

[Drugdoctor]

Why distort the numbers you know? re-"Also, fees from Mexcor.? $50,000/Q possible?"
It's been posted many times on this board what the MEXCOR agreement is, but I'll post it again.



Effective February 15, 2010, the Company entered into an exclusive agreement with Mexcor, Inc., to manage, promote and distribute in the United States, the Company’s portfolio of brands, as defined. The initial term of the agreement is for five years, requires a minimum net sales performance by Mexcor, which when attained, will automatically renew for an additional ten years. Furthermore, the Company has agreed to issue the principal of the business 12 million shares of Company common stock in exchange for consulting services.


Under the terms of the agreement, the Company shall earn and Mexcor shall pay, a royalty fee on a per case or case equivalent basis on all Company products distributed by Mexcor, which royalty fee will increase by ten percent on August 12, 2011, with additional ten percent increases (compounded) on August 15th of each successive year during the initial term of the agreement. Additionally, the Company shall earn $10.00 for each case of Damiana product, as defined, distributed by Mexcor. For the first full twenty-one calendar months following the effective date, Mexcor will pay the Company the greater of the per case royalty fees described above or the following monthly minimum royalties; $20,000, for the first six months; $35,000, for months 7-9 and $50,000 for months 10-21. The minimum monthly royalties are payable on the 15th day of that month. Mexcor can earn additional financial compensation in cash or stock for achieving certain metrics.

[FUNMAN]

Re Revenue Prediction: I posted this a few days ago. I think it is conservative and reasonable. I would not accept anyone's estimates that are vastly above my projections.


FUNMAN818 Wednesday, January 19, 2011 10:57:22 AM
Re: kezzek post# 55269 Post # of 55465

Oh gosh, that's so true.

That's why at DKAM everything sales-wise that's been PR'ed needs to be thrown out with the bath water. We have a new product to measure, starting at zero.

If re-orders occurred in the greater NY metro area and some of the new distribution area orders make it into this quarter's revenue stream, the next report will be very revealing.

The first distributors had to sell out of the initial orders before re-ordering, so that first month's figure in the last report cannot just be tripled.

If DKAM did get basically 2 re-orders of marginally similar size, and add initial orders from new distributors, we can expect revenues in the $250,000 - $350,000 range.

If revenues fall significantly short, it will be time to take DKAM off life support, and let it slip away forever. The absolute key right now is how reorders measure up.

If they meet or exceed those numbers, something very encouraging will be happening and DKAM might become a growth story.

With my own money I won't be adding DKAM to my portfolio. It will be cheap enough after the next report when an investment can be made with more certainty.

As far as I am concerned the stock can go to sleep for 3 months. If it didn't trade I wouldn't care.

Nothing important beyond expanding the distributor list that we already know is happening will be revealed until we see the next revenue numbers. For now I'll drink Rheingold and save my beer money while I try to get back to even on DKAM.