Before the Tiger-Lynk Technology was aligned with HIMR, it was aligned with Aquatic Cellulose International Corp. (AQCI), but back then it was called the Aquatic Timber Harvester (ATH). I searched some articles about them, but not enough to exactly know what went wrong there (though the dangerous traits of poor focus and a tendency to over-reach seemed apparent). They were harvesting trees in Brazil using the technology but had to abandon the effort due to inadequate funding (maybe they failed to satisfy the terms of the acquisition debt). Frank Van Vranken (who is the president and the primary, if not sole, owner of North Cal) was the Head of International Operations for AQCI, and Michael Lacy (who is vice president, marketing at North Cal) was the head of investor relations at AQCI. Michael Lacy and Frank Van Vranken were president and vice-president respectively of HIMR as it went through its review of the business model and structuring of early 2012. They hired Sheldon Romain and Peter Meier, the current management and board. When Lacy and Van Vranken stepped down from management, the PR announcement did not say they stepped down from the board. In a subsequent quarterly disclosure, it noted that the office in Ukiah CA was provided by a member of the board. And so, the impression is left that Lacy and/or Van Vranken remained on the board. However, the official disclosure for Washington state only includes Peter Meier and Sheldon Romain as boardmembers. So, clearly the North Cal guys were involved with the re-purposing of the company and are currently involved as advisers and they may continue to be involved as "unofficial" directors.

You probably know the above, I include it for a reader that doesn't and to provide context.

I think the failure with AQCI gave them a very healthy fear of the execution risk here and they have structured their engagement with HIMR so they don't have any such risk. Their time is compensated through deferred compensation which can be covered through dilution if need be. There isn't much of an opportunity loss for them if it doesn't work out as they undoubtedly view this as the best available alternative. The execution risk is all on us and there is a lot of it. I wouldn't call this a fast growing industry as concessions aren't awarded that often, but a concession can have a rapidly growing effect on revenue (especially with an efficient logger) and that could be hugely impactful for us. From a bearish perspective, the long affiliation of certain individuals can and should be viewed as suspicious. From a bullish perspective, lessons learned from past failures can inform new attempts. It might be annoying that North Cal is avoiding execution risk (North Cal will get 37% of net profits), but it is in part why there is an opportunity for us at all - all the competitors are private companies.

Although the interests of shareholders, Tiger-Lynk owners, and North Cal are well aligned, they will never be perfectly aligned for Tiger-Lynk owners benefit from dilution when they are the ones converting and North Cal is uninjured by dilution. We all benefit from a strong HIMR that wins concessions and earns revenue and profit, but for us how it is funded is crucial. For us, the more self-funding the better. Fear of execution risk improves the alignment of interests, I think, by countering a desire to over-reach.

Or so it seems to me.