Replies to post #23302 on Sino Agro Food Inc (fka SIAF)

[jan4]

Your explanation is indeed correct I have to give you that, but there is always a ‘yes but’.

Before my friends started investing, thy have made their homework, and believe it, thy are critical.
Besides some questions about fish farms and possible associated problems, were I humble admit that I never was aware of, those questions were answered by Chad and Solomon himself . The next issue was the famous F shares, our objections were also solved. The last question was ‘were is all that needed funds coming from’ .
To solve this problem, we have consulted outsiders. There have been contacts with known tour participants and other means. The anwer was rather simple, the extra shares, if you like it ‘dilution’, gives you the answer.
And, o yes, today we still have those outsiders watching SIAF. So, the ‘dilution’ is not a problem as far it us concerns.

The last Q results were, after deducting 10% as been ‘painted’, still outstanding. Today there are 15 out of the 18 in our formation shareholder, and to our surprise, we have knowledge/contacts with unsuspected others who are involved directly or indirectly in this company.

[viking86]

There is a question in my mind re. the payment terms of the JV's that are all set up in a similar way by SIAF. In the JV contracts, SIAF or one of its subsidiaries, be it CA or Meiji or Triway, is the (initial) 25% partner but it is also the provider of design and construction services who gets paid for its services by the JV. For example, for the new Beef Wholesale and Distribution Shop (BWDS), the contract price is about $3.7m payable to SIAF itself as the partner.

So does SIAF get paid 100% of the service fee as the service provider or only 75% of service fee being the 25% partner itself? How much of that amount is booked by SIAF in its reports? My guess: 100% booked as revenue and 25% booked as expense or Account Payable. Also, it usually takes at least 6 months, sometimes a year or two to have the JV approved as a SFJVC by the gvmt. In the mean time, most of the facility has already be built and all other related expenses are prepaid by the 75% partner and those will be refunded to the partner after the SFJVC has been approved per contract:

5. The Parties agree to apply to the China Authorities to form a sino foreign joint venture company (hereinafter called “SFJVC”) to develop the Project soon after the execution of this Agreement, and prior to the official approval of the SFJVC, the Developer shall will be responsible to provide funding for the development needs of the Project, and such, upon the official establishment of the SFJVC, the Parties agree to transfer this Agreement to the SFJVC, and the SFJVC will be responsible to fund the required development capital needs of the Project.

Let's assume all the "other" construction and initial setup/supply costs in total 4M. Most likely, SIAF gets paid the $4M in cash in several partial payments as they incur by the partner. After the SFJVC has been approved, 75% of those partial expenses will be refunded to the partner, hence the many smaller amounts of debt settlements shown in the 8k report, dated a few days or weeks apart for the different projects. The debts are paid in shares issued to the partner based on the stock price the day the cost was paid.

We know the rest of the story. 6 months later, the shares become unrestricted and dumped on the market, mostly in batches of a few millions shares at a time... Agreed?