financing, page-13

Hi Rifici

I think it would be based on orders. They dont have the excess cashflow to do so otherwise.
Having said that, if they were to use some cash to manufacture 10,000 marshmallow shooters without a firm order I wouldnt see this as an issue, as it wouldnt remain inventory for very long IMO.

What the factoring facility allows them to do is in effect speed up the operating cash flow cycle.
Typically its retailer places order with brt, brt pay to have goods manufactured, brt sends good, payment is made by retailer, and then brt can use that revenue to pay for next lot of goods.. and the cycle continues.

What the factoring facility does is enable BRT to receive this revenue sooner, so they can use the funds to manufacture the next lot of products sooner.. which then get sold and using the factoring facility that revenue gets to brt sooner.. and the cycle continues

If the factoring facility is a way to speed up the receipt of cash so brt can turn over that cash quicker (with the end result being an incremental increase in revenues due to the shorter timeframe between manufacture and revenue receipt), the purchase order facility is a way to increase the size of the cycle.

This one-off cash injection of say $2m means that $2m more product can be manufactured and then sold.. and this increaed amount then feeds into the cycle outlined above.

So the important thing is that the factoring facility is in place and working.. and the purchase order facility is a nice to have, and im sure its still on the cards, but has been replaced by a loan from the MFC.

Thats all fine by me and im quite happy with how things are progressing. It looks like the market has no idea what this company is doing and the strides forward it is taking.