RE:RE:RE:RE:[Time Value of Money]correct, and specifically for Q3/2015:
Royalty associated with note payable = $524,000 Now we back out the 3rd party related costs. $524,000 = ($3,750,000 - 3rd party costs) * .175 3rd party costs = $755,710 Now we can back out Intermap's costs. $3,750,000 - $755,710 - Intermap's costs = $2,371,000 Intermap's costs = $623,290 Therefore, in Q3/2015, COGS was comprised of 55% subbing and 45% own costs. Key questions for mgmt on the CC could be relating to the hiring policy for these new hires recently announced. How many contractors and how many employees. If Vertex/Intermap decide to value royalty by discounting all future known or probable cashflows, then the only real way to massage that royalty is via hiring policy, imo. Otherwise, the royalty will be massive.
But imo, I'm not sure who all read the second amended blog, the much more likely scenario is that a value has already been agreed upon, which is likely a function locked to the the Feb 26 note. They will likely re-price the shares that were retired to remain consistent with the re-pricing they did on Dec 26 from two notes prior. And, they will need new equity/warrants for the additional 1.5$ outlay. These could either be priced on effective date or conversion date, not too sure, hopefully the latter. But, this literally implies a placeholder was needed, and, is much more standard, imo, with loads of flexibility.
edftyui wrote: You are confusing net revenue with gross profit. Think of it in the following way:
Revenue $10mln
(3rd Party Outsourced) ($2.5mln)
Net Revenue $7.5mln
(COGS) ($2.5mln)
Gross Profit $5.0mln
In the above example, Intermap would owe $1.31mln to Vertex which is equivalent to 17.5% of Net Revenue