The minimum orders required to retain Exclusivity in 13 Countries

Year 1
Kilograms per month per country 500 (x13)=
Kilograms per month 6,500 (x12)=
Kilograms per year 78,000 (x)
Assumed price per kilo* ($125* - $150*)=
Annual sales (@$125) $9,750.00 or more
Estimated cost of production ($3,120,000)
Net profit $6,630,000

Vyta Corp must be paid approximately $2.5M in loans before the balance is distributed 50/50 with Justin Holdings, LLC - Vyta Corp should receive approximately $2,050,000 of profits from Bioagra after the loans have been repaid.

Year 2
Kilograms per month per country 1,000 (x13)=
Kilograms per month 13,000 (x12)=
Kilograms per year 156,000 (x)
Assumed price per kilo* ($125* - $150*)=
Annual sales (@$125) $19,500,000 or more
Estimated cost of production ($6,240,000)
Net profit $13,260,000

Net profits of $13, 260, 000 to be divided equally between Vyta Corp and Justin Holdings, LLC

Year 3
Kilograms per month per country 2,000 (x13)=
Kilograms per month 26,000 (x12)=
Kilograms per year 312,000 (x)
Assumed price per kilo* ($125* - $150*)=
Annual sales (@$125) $39,000,000 or more
Estimated cost of production ($12,480,000)
Net profit $26,520,000

Net profits of $26,520, 000 to be divided equally between Vyta Corp and Justin Holdings, LLC

3 Year Totals
Kilograms per month per country 3,500 (x13)=
Kilograms per month 45,500 (x12)=
Kilograms per year 546,000 (x)
Assumed price per kilo* ($125* - $150*)=
Annual sales (@$125) $68,250,000 or more
Estimated cost of production ($21,840,000)
Net profit $46,410,000

Net profits of $46,410, 000 to be divided equally between Vyta Corp and Justin Holdings, LLC after the debt to Vyta Corp is repaid in the first year.

*Price per Kilo
In February of 2006, I had a conversation with Dr. Arun Bahl of Immudyne, Inc., during which he told me that the market price for yeast Beta glucan for use as an animal feed additive was $175.00 per kilo. I realize that Bioagra is able to produce much greater quantities and in a more efficient way than all the competition. Therefore, should they chose, they could afford to sell in large quantities, at a considerably lower price, and still have substantial margins. On the other hand, Bioagra's Agrastim is of a much higher quality than other products on the market, and could therefore command a much higher price. Since this is the first sizable contract, I am going to assume fairly significant discounts and have elected to calculate values on $125/kilo. It is possible that the contract price is five or ten dollars less per kilo, but more likely it equal to or higher than $125/kilo, even as much as $150/kilo.

Opinion
The information contained herein is based on my due diligence regarding costs and profit margins. Over the past 2 years, I have visited the plant and talked to the principals. These figures are consistent with data I have collected during those visits and conversations, as well as with a competitor. This information, while believed to be accurate, is to be considered merely my opinion. Though I consider my due diligence thorough, actual figures may vary from my estimates.

Minimums
While there are no guarantees of minimum orders, it is incumbent upon AHD International to meet these minimums in order to retain exclusive distributorship in the designated countries. There is a degree of probability that AHD will exceed the minimums, and that based on my calculations, the final value of the contract could represent well in excess of $68,250,000 in sales over three years.

 

-zties