I did use the word “guessing” and the royalty/commission details of the manufacturing agreement haven’t been disclosed so we are going to pile assumptions on guesses on so it’s worth about nothing.
A typical manufacturing cost structure starts at 100%….of that 25%-33% represents the cost of raw materials…..another 25%-33% is labor and the remainder is G&A, profit and other. The “other” is where the commissions/royalties fall.
Here comes the guesswork….
If the application were to originate in China and sold in the US (our exclusive territory) I would expect something like 3%.
If the application were to originate in the US and sold in the US….I would expect 3% + another 3%-5% for the legwork.
The big guess is the selling price to Movano Health….I picked $25-$30 which represents roughly 10% of the selling price of $269 and probably 20% of Movano’s manufacturing cost …the electronics from OSRAM are probably 40%-50% of product manufacturing cost. The rest is G&A etc.
Recognize that I’m not an accounting person but my background is manufacturing engineering which may be useful.
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