I'm with Lommi on this one.
In the 2023 Q3 Update the following was said about VMT's financial position.
Financial
The Company’s balance sheet remains strong, with a closing cash position of A$28.1 million as at 30 September2023. The closing cash position is after the:
receipts from draw down of bank operating facility of RMB 20 million (~A$4.3 million) secured in 3Q23;
payment for remaining half of the acquisition costs of RMB 6.8 million (~A$1.4 million) to acquire industrialland in the Lishui Economic Development Zone in Nanjing, China, as announced on 2 May 2023; payment for first phase of construction costs of RMB 6.6 million (~A$1.4 million) to build new manufacturingfacilities in the Lishui Economic Development Zone in Nanjing, China, as announced on 6 September 2023;
payment for acquisition costs of RMB 13.5 million (~A$2.9 million) for Soco Shanghai patents, which includepatents, inventions and designs for various models (TS, TC, CU, CUX, TC-MAX, VS1, CPX, CU mini, TS StreetHunter and TC Wanderer) that the Company currently markets and distributes into international markets,as announced on 21 September 2023; and
prepayment of RMB 5.4 million (~A$1.2 million) to bid for Soco Shanghai trademarks, which is currentlybeing considered by the court governing the collection of debts owed by Soco Shanghai.SummarySo we know that the $2.9m was physically paid last year.
We know that a further $1.2m was bid (and Prepaid) for the Trademarks but at that point not accepted. Presumably, the deposit is still being held.
Further
We know the settlement now includes all the moulds that VMT hadn't bid on before.
It provides VMT with unfettered global distribution rights (including into China which is the world's largest EV Motorcycle market) (admittedly one which VMT said strategically was not its priority).
It also includes the 50% of the JV we didn't already own. The 2023 Annual Report showed the Net Assets of the JV at $10.16m and VMT's Equity accounted share at $5.08m It has been trading at a loss so the Net Assets have been reducing but that figures a good starting point.
Seperately
Previously we were advised that VMT was pursuing legal action against Soco for various acts and commissions (which I thought related to them not paying their share) but to my recollection we were never advised that Soco was litigating against VMT.
For this reason, I was surprised to hear in the latest announcement that VMT thought it best to make a no admissions settlement where VMT were paying rather than receiving money. Perhaps the items above add up to more and then we deducted what we thought we would get from litigation to give a Net amount of $6.5m.
Either way the $6.5m is a new sum and does not include the $2.9m which was paid last year (but it might include the $1.2m that was paid to support VMT's bid for the trademarks but not accepted at that time.)
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