Monday, December 04, 2023


Manufacturers often have unique issues, many of which can be solved with barter. In one particular transaction, a company that designed portable, tankless dental equipment had several issues that nearly put them out of business.

The company had a group of 11 investors that unilaterally decided to no longer provide the funds required for day-to-day operations of the company. In addition, their outsourced specification manufacturer had a significant inventory of parts as well as completed merchandise ready for delivery. But, certain FDA approvals were still pending.

To solve the challenges, a contract was negotiated with the 11 investors to buy out their equity positions with trade dollars. In addition, in a separate agreement, trade dollars were to be paid to the outsourced manufacturer to buy out their inventory at full value. A condition of the agreement was to pay the manufacturer with the proceeds from cash sales, once the inventory was sold and delivered, whereby the cash replaced the trade dollars, thus reducing the amount of trade dollars actually paid to the manufacturer.