Wave Systems Corp. (fka WAVXQ)

[go-kitesurf]

rachelelise, that's an excellent point:

There are fixed and variable. We have generally been treated all of Wave's costs as their burn rate meaning that with no revenue this is what they have been spending. In that figure is general sales and administrative costs and research and development. Since their current products don't require much in the way of manufacturing costs, a key variable cost would be support. We don't have a good handle on this aspect becuase it is unclear how those responsibilities will be spread and priced. So for now, I think you can see that essentially 100% of the Dell ETS revenue to wave would go to the bottom line regardless of classification.

The burn rate already includes the cost of sales, marketing, manufacturing and distribution. Of course support will be added and the burn rate will adjust accordingly, but the costs of doing business are esentially already known. I need to adjust my spreadsheet. Thanks.