RE:RE:RE:RE:New InterviewNow we are talking real substance of outcomes rather who does one talk to.
Use a simple example and assume $1,000,000 revenue and 60% EBITDA.
Original scenario - PYR gets 10% royalty. HPQ profit is 60% of $1,000,000 less 10% royalty off of the top line = $500K. The effective % margin is 50%.
Revised scenario - 50/50 ownership. HPQ profit is half of EBITDA = $300K. Given the 50% split, the effective % margin is 60%.
Higher % margin, lower $ margin.
Would be great if PYR was $ richer so that they could be the partner providing the $ resources to scale up. Without those $ resource, likely need another partner.
Whoever wants to do a business deal with HPQ under either scenario will do the modelling and consider the structure and risks to come up with the offer that gives them the desired rate of return.
But first thing is first, prove up the pilot plant product delivery and financials, then scale them up. Somewhere after the "proving up" offtake agreements or JV's may start coming in.