Don, the processor was fairly priced at the time of the partnership prospectus last July--yes, a lot of then-unavailable improvements have since been added (for example, a much superior thermal oxidyzer), but again, the entire cost to the company has already been expensed as R&D and will effectively be recouped by subsequent sales of higher priced units. Remember that the intent of having an operating partnership for the unit was to raise desperately needed immediate working capital for GRNO, which has already used the partnership payments to pay many of their last few month's expenses and to fund the current construction of the second processor, without having to wait for an initial cash deposit (the partnership agreement explicitly states that GRNO will spend the money immediately and not hold it in trust until the title passes, so the partners were accepting a good deal of risk prior to the demonstration of a working processor--had it failed, none of the partners would have got their money back, any more than the stockholders would have).
I recall that a recent comment asked about the "New York" financing, which Ron correctly noted as dead--the partnership was what GRNO came up with as a less costly alternative to provide immediate cash income. I think the shareholders are far better off under the partnership arrangement than they would have been under a highly dilutive issuing of massive amounts of new stock, even if, for arguments sake, they might have realized an extra $300 thousand or so on the sale of the processor now (say 5 cents per share one time lost earnings). At last fall's depressed prices, $1,500,000 would almost certainly have required more than 1,000,000 shares, counting the financier's rakeoff, so you can assume that all your earnings per share would have been reduced by about 17% for every year henceforth. And don't forget that the partners are all also shareholders.
According to the financial statements accompanying the partnership papers, the partnership is paying about $1,200,000 for the processor, $150,000 for plant site improvements (the land lease will also be assigned to the partnership), and $75,000 for tanks and auxillaries, leaving about $75,000 as an operating reserve (I believe some of it will be used immediately to install additional tanks to accommodate increased capacity). Since the processor will be functioning at or near full capacity when it is turned over to the partnership on March 31, it will also quickly start producing cash revenues. Even if a few of M&K's ideas require some additional capital (I don't know whether they do or not), there will be plenty of funds for the purpose. There is no further financial risk to GRNO.
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