RE:Email to JohnBeaner53,
Clearly you've put a lot of effort into this subject and good on you for that! Thanks!
But from my perspective, with the exception of the cost of exclusivity, I see this as pretty straight forward. Here is what I believe may be happening.
EXRO owns the channel and has the relationships with the channel partners announced prior to and as part of the Re:Build press release.
The channel partners purchase from EXRO, who in turn places orders with Re:Build to match those from the channel partners.
Channel Partners may receive some small discount from the list price, but their revenue is derived primarily from the installation and technical support. Some partners may also participate in the cost savings the Cell Driver generates for their customers too. Its wide open on that front, but I forsee very little wiggle room for channel partners to boost the cell driver price. EXRO does not want that.
EXRO is well aware of the competitive landscape and understands what price points need to be met for the configurations they have on offer. EXRO has developed fully costed specifications for these configurations.
EXRO likely provided RE:BUILD with a must not exceed price for the remainder of the components, their manufacture, integration and testing.
RE:Build examined this and concluded they could not only meet this threshold but exceed it as well if the business goes as planned
Re:Build made the business decision to seek exclusivity was left with two choices. They could pay for the exclusivity in cash and keep 100% of the savings as profit for themselves or they could share the cost savings with EXRO.
I like the latter rather than the former for both companies.
So I fully expect to see EXRO will "provide/deliver" their technology to Re:Build for integration into each Cell Driver unit sold. Once the Cell Driver is ready for Delivery....It's pretty straightfoward
EXRO invoices the Channel Partner for the agreed upon unit price X the number of units.
Re:Build invoices EXRO for the expected COGS (as specified in the Agreement).
Channel Partner Pays EXRO 100% of CellDriver Price
EXRO pays Re:Build
Every Quarter or 6 months RE:Build will satisfy an accounting requirement to determine if cost savings occurred and if so will deliver 50% of same to EXRO.
I for one and not in favour of "special relationships" between any member of management and any shareholder or group of shareholders as it could present all manner of issues going forward.
I don't need to know every detail of their commercial agreements and quite frankly would be fairly upset if management started sharing them. Remember business models and practices can be just as important to companies as their technical IP.
I too chatted with John prior to the AGM. At the beginning of our call I made it perfectly clear that I did not want him to share any information that was not in the public domain. I simply asked that management consider broadening their explantion regarding the timing of the financing and provide the market with some context regarding Mr. Van Batavia's departure.