Email from Dennis at ONTC about valuation of Patent:
We noticed on the iHub board that there is a question as to why the intellectual property is valued at only $2,954,146***, when the company has a mean appraisal value for the IP of over $17,000,000.
The reason is that under conservative public accounting rules, which is specific for IP for products in the initial stages of distribution and sales, the accountants record only 15% of the outside appraisal value (15% of $17M = $2.5M+), subject to later adjustment as sales develop. In this way, by using a highly conservative valuation the company avoids overstating on its financials the value of the IP assets, yet records what the auditors feel is a minimal, supportable number.
Once sales develop further, the company’s accountants will revisit the current valuation.
-Scott
