Replies to post #3928 on EcoSphere Technologies Inc. (fka ESPHQ)

[Joey Bags]

Just my opinion ! But I'll stick with it.

[Recognizer]

I agree they will want and build many more than the 16 which is probably where the money came from.
Key word INITIALLY 16 units.I'd say 100 at least.
Ecosphere Technologies, Inc. (the “Company”) and its majority owned subsidiary Ecosphere Energy Services, LLC (“EES”) have signed a non-binding term sheet for an exclusive technology licensing agreement with a company that will deploy the Company’s patented Ozonix technology in the U.S. oil and gas exploration and production industries. The term sheet calls for the Company initially to build 16 of its new EF60 mobile high volume water treatment units over the next 24 months for the licensee to deploy exclusively in onshore oil and gas shale plays across the United States. EES will receive approximately $2,750,000 for each EF60 unit that the Company manufactures as well as ongoing licensing and royalty payments. EES will pay the Company its costs and a manufacturing fee; in addition, the Company will receive profit distributions from EES which will be derived from the licensing and royalty payments. The term sheet calls for two EF60’s to be delivered by Ecosphere to the licensee each quarter for the next eight quarters starting May 15, 2011. The term sheet is subject to execution of a definitive agreement that the parties are currently moving forward to complete .

[matt51]

Thanks for your very reliable information. I agree with the mark-up that should net $1 million plus for each manufacturing fee on each machine. The manufacturing fee alone on two machines puts Ecosphere at break-even.
I do believe you're a little light on the licensing fee. The twelve or six machine set now yields $700,000 per quarter in revenue. Now the 2 machine sets will yield $700,000 per quarter in revenue or $2.8 million per year per 2 machine set. The gross margin is in the 60% range, or $420,000 per quarter per six or twelve machine set. The two machine set is a little more efficient, only 4 workers on site rather than 5 workers the six and twelve machine sets required. That is a reduction of 20% in costs. We ultimately believe the gross margin rises to 70%, or $490,000 per quarter per 2 machine set. Reducing the $490,000 by 50% to the JV partner, still leaves a residual of $245,000. Of the $245,000, 50% goes to EES, WHICH NETS ECOSPHERE $125,000 IN ROYALTY FEES PER QUARTER PER TWO MACHINE SET.
On a PPS basis (including an additional 12 million shares that were recently issued) the 8 machine sets yield 3 cents per share in profit.

[matt51]

I'm beginning to believe Joey Bagofdonuts. Clean Harbors (CLH) has a 10k announcement scheduled for 2/21/2011. Therefore, they are in a blackout period. Once the announcement is released on the 21st, a follow-up statement is usually made a couple of days later (the one that has the customary cautionary statement - "Contains forward looking statements"). If indeed Clean Harbors, CLH is the joint venture partner, then the announcement would probably be made in the last week of February. My brother, Tom is starting to lean towards CLH too.

[bewise43]

Joey, your analysis is mind boggling for the out look of esph! i'm NOT the wisest in investing, but think i did well w/ this one. Been in for almost 4 years now and plan on staying long term, but if you don't mind giving a little advise (Which I wouldn't hold you accountable for) after the run how much do you think it will drop back and what might be a good buy back$ since i'd like to get my initial investment back and continue to hold?