$TPAC Recently I was asked to provide some thoughts on the

$TPAC Recently I was asked to provide some thoughts on the E-list deals, EIA numbers, O/S, etc. A fellow long passed along a few sets of numbers and asked for a second opinion and a different slant. A few other PM's by others have asked about O/S, revs, and future scenarios. The following are some tidbits, calculations, and forward looking outcomes that have been discussed as potentially possible near to mid term, or with more precise specificity as to what that means, loosely, between now and the end of the 2016 calendar year(near) and between the end of the 2016 calendar year and the end of the 2017 spring season (mid).


I had originally calculated profits at what I felt to be a conservative 1/2 of 1%, but upon scrolling through the Twitter feed, the margin may be a bit smaller than that in some select cases.

So, for the best attempt at accuracy, I'll be referencing Muse.

From http://www.twitlonger.com/show/n_1sp25fv :

EIA Trade Deals & TPAC Revenue
How would an EIA trade deal like this affect TPACs revenue?

• China takes 6M barrels/month

• EIA discounts fee from .10 to .05/barrel

• USA FR states up to 20 percent for set aside


From E-list:

Commodity:

Nigerian Bonny Light Crude Oil (BLCO)

Quantity:

72 MBRL (Annually Hedged)

Period:

3 Year w/possible 2 Year Extension

Location:

China



6M(mentioned from the Twitlonger) = the 72MBRL(annual figures above)/12(months).

At the aforementioned .05/barrel:

72,000,000 *.05 = $3,600,000(annual); $300,000(monthly)


This being for the BLCO deal.


However, later, on Sept 8th(source: https://twitter.com/TPACmuse/status/772646541957992448), these numbers were mentioned:

2nd BLCO Request Worth: $1,003,752,000/yr.
Est. net profit $2,880,000/yr

2,880,000/1,003,752,000 = 0.00286923463, or just shy of .003%

So, with 3,600,000 being the top figure and 2,880,000 being the low end, averaged, the mean number is $3,240,000/yr profits from the BLCO deal.


Now, with the sugar cane deal, at 26.5M for every three months, or, 8,833,333.33 monthly, or x 12 @ $106,000,000 annually, with profit factored in with the low end figure above for the BLCO deal at 0.00286923463, or .003 for simplicity, $106,000,000 x .003 = $318,000 annual(monthly @ $26,500)


Combining only the low end figures(*note: the sugar cane deal may be of a different, and hopefully greater, margin than the BLCO deal, but to keep from exaggerating, I am using the lowest end numbers provided), the profits on an annual basis from both deals would be equal to $3,198,000.

Also of note, is the BTL SLA deal, at $13.5M(gross) with the LA deal at $1M.
On one of the CC's, the first one I believe, James mentioned around a $3M net from that, not including the LA figures.

Now the $3,198,000 + $3M +$1M = $7,198,000(annual net revs before labor, overhead, etc).

Above, the FR states 20% reserved for pps stabilization, with 10% set aside for MRVB. MRVB stated on the reconstruction timeline to be able to turn every $100k into $1M.

$7,198,000 x .2 = $1,439,600 set aside for core value and pps stabilization

with 7,198,000 x .1 = $719,800 set aside for MRVB.

Seeing as $100k equates to $1M with the MRVB rate of change factored at a multiple of ten, all things being equal, the $719,800 set aside for the MRVB once multiplied, would equal the original value of the aforementioned rev number of $7,198,000

Considering our O/S is 3.9B(*only using O/S numbers here, not float), let's consider what $7,198,000 would mean against the float at various near-term price points.

$7,198,000/.0012(current pps) = 5,998,333,333 B O/S repurchased out of 3.9B available

$7,198,000/.002(future pps) = 3,599,000,000 B O/S repurchase from available 3.9B total.

Accumulation line on chart showing 1.38B accumulated.

3.9B(total)- 1.38B(accumulated) = 2.52O/S remaining

$7,198,000/.00285(future pps) = approx remaining unaccumulated O/S at 2,525,614,035


Next, forward looking, the TPAC AU SLA deal. China set up for production run of 2-3M parts; TPAC AU was for a production run of 20M parts. BTL SLA(of let's say 2-3M parts) is equal to (minus the LA) $13.5M(gross rev). 20M/3M(parts) = a 6.66666666667 times great production run for the AU deal; $13.5M multiplied by that same factor of 6.66666666667 is equal to an estimated $90M (gross) annual from AU alone.


Per the first CC, James mentioned net revs around $3M for the BTL SLA. LA should be near 100% take home. With the AU 20 over 3, or ~6.666667 comparative, that should equate to $20M net of $90M gross, plus an additional $1M for that LA as well. EIA estimated net revs based on the two E-list deals alone to the tune of $3.198M. Also of note, credit for the reminder of this going to the fellow long I was PM'ing with, is the $2M from the WG consult arrangement seen on the last Q.



$3M BTL SLA
$1M BTL LA
$20M AU SLA (based on BTL SLA x 6.66666667, from the 20M/3M(part figure)
$1M AU LA
$3.198M EIA

$2M WG

Total = $3M + 1M + 20M + 1M + 3.198M + 2M = $30.198M


Total = $3M + 1M + 20M + 1M + 3.198M + 2M = $30,198,00 est net annual for 2017 on the provision that the AU SLA goes through; likely, since AU SLA is slated for 2Q2017, total rev figs would be seen in full(considering no other deals, bearings or EIA, or even MRVB revs) 2018 K filing, with a fair percentage of that number seen 2017 K filing. $2M WG may be seen only on 2017 or split between K's 2016 and 2017.


Additional X-factors for 2016-2017:

Russian Federation Deal(if memory serves correctly) which is said to be 300% of BTL SLA. I have seen two sets of figures regarding this based on phrasing by Muse: 1) three times the annual (13.5 x 3 = $40.5M), and 2) three times annually(for the EIA deal) in comparison to entire 10 yr BTL SLA ($135M x 3 = $405M)

With a little wiggle room (125M vs 135M, and the 3x wording), this tweet from today could be touching on that as well:

TPAC estimates project cost to be $125 million CEO Says EIA can push for three times that. Word is being sent to AVIC to Join the Pac, TPAC
Source: https://twitter.com/TPACmuse/status/783013579775586304

And of course, other deals being negotiated in regards to bearings, import export assurance, $10-85M in potential lending, MRVB revs plus secondary RVB's created for AFS trader efficiency and clarity, or even the possibility that the $2M WG insertion could be a multiplier loaned now and yielded back later to assist Bill's son, Angus, with the MRVB, which alongside a few pro traders, the $2M at the aforementioned factor of 10 (each $100k turns into $1M per reconstruction timeline), could bring forth $20M.

Well, I hope everyone is doing well. There has been so much great information being posted on the board lately that it has been a pleasure to read.

My personal opinion is that we are on the cusp of a significant turnaround, with a move in price per share being a secondary effect of a budding company coming into its own. Again, remember the old timeline, before the reconstruction. Phase one, which took several years, was to gain certification; we are one of seven in the world with NAVAIR because of that. Phase two, which took some time as well, was becoming factory ready and positioned, complete with machinery, which has now evolved into a move with BTL, an international player of solid reputation. And Phase 3, which is relatively recent, as we just entered into it late 2015, is sales. Sales has now broadened dramatically in scope from just bearings to the EIA, MRVB, consulting, etc. Enormous amounts of revenue potential coming in in the form of RFQ's to be processed, negotiated, termed and finalized, all bank approved, seemingly in the universal form of the IRDLC.

And by this tweet, to add to the list of upcoming X-factors for 2016-2017 and beyond, I would say that some previously discussed potential deals may be on the docket for discussion during Bill's upcoming trip back to China, those being potential SLA's for a Chinese battery manufacturer and a Chinese bearing company(also of note, the potential oil arrangement and deals with contacts of the harbor master(s)):

10/2 Business Report begins now. CEO McKay is heading back to China with a full schedule. While there SLA conversations with 2 manufactures

Source: https://twitter.com/TPACmuse/status/782941216488816640

And as a last forward looking statement before signing off, today's tweet said a series of NWE's, not a single one, not a pair; a series.

Have a great one, everybody, and thanks to all of you for making this a great board. The recent information is much appreciated.