The replaced royalty deal in their words is not a material benefit. It only makes the calculation clearer. set fee per unit and on exiting the manufactures w/house.
Problem with the previous deal is it was a % of wholesale. This moves around due to discounts. Then it is based on sales, so what do you get if it's a free gift or sits in the w/house.
the rate is industry standard for FMG. The problem is PG are only using obj as a sales boost gift type product. They have never given OBJ a main product package to enhance the effect. Why would they there would need to be a certain unit lift in sales to cover the royalty and obviously at this point they do not see it happening.
Further OBJ in the agreement could not figure out a formula that showed PG that by using OBJ they got more sales out of it. Chicken or egg situation. Very hard to do. Can't just say last year you sold x so anything above that is due to OBJ.
Also I this doesn't go ahead. and there is a small cap raise. Who is to say that the ces showing will be warmly received. If it isn't then what. Another cap raise to stay afloat and test the water with BG another unknown product that no distributor wanted to take on.
This gives the company life and allows for ready constant funds to go out and drive the business.
And yes the obvious plan is to get the license to either manufacture on behalf of the US producers and then engage with the tech up and down flow and or produce their own products and introduce those and then the tech.
OBJ Price at posting:
1.5¢ Sentiment: Buy Disclosure: Held
(20min delay)