⚙️ Centralised Assumptions
All model inputs in one place. Blue cells are editable — changes propagate to all valuation methods. Fields marked with ⚑ require Pascal Chrétien validation.
A. Royalty Rates by Method and Segment
| Parameter | EY 2018 | Adjusted RFR | MEEM / W&W | Note / Source |
|---|---|---|---|---|
| Royalty rate — Military UAV | % | % | % | EY: Tier1 avg 9.7%-11.3%. Adjusted: defence premium |
| Royalty rate — Civil Helicopters | % | % | % | EY: same rate. Adjusted: slightly below military |
| Royalty rate — eVTOL New 2026 | N/A | % | % | Absent from EY 2018. Avionics propulsion analogy |
| Royalty rate — MRO / Ancillaries | % | % | % | Peripheral components — reduced rate |
| Weighted Average Rates | ||||
| Weighted avg rate — Low case | % | % | % | Revenue-weighted per EY |
| Weighted avg rate — High case | % | % | % | Revenue-weighted per EY |
B. Discount Rate (WACC) — Evolution 2018 → 2026
| Parameter | EY 2018 | Adjusted 2018 | 2026 Conservative | 2026 Base | Rationale |
|---|---|---|---|---|---|
| WACC — Demo phase (TRL 6) | % | % | % | % | TRL 6 → technological risk significant |
| WACC — Certification (TRL 7-8) | % | % | % | % | EPO win compresses patent risk premium |
| WACC — Commercialisation (TRL 9) | % | % | % | % | Post-certification: residual risk low |
C. eVTOL Market — 2026 Assumptions (Absent from EY Report)
| Parameter | Low | Base | High | Source / Note |
|---|---|---|---|---|
| Total eVTOL market 2026 (USD Bn) | Multiple sources 2025-2026 | |||
| eVTOL market CAGR 2026-2035 | % | % | % | Source: consolidated market 2026 |
| EMD3 addressable market (USD Bn) | Distributed propulsion ~40% of total | |||
| EMD3 eVTOL penetration rate (% by 2035) | % | % | % | Non-exclusive licensing assumption |
| eVTOL licence revenues — peak year (EUR M) | 8 | 18 | 35 | Market × penetration × royalty rate |
| Timing of first licence (years from now) | From March 2026 | |||
| Number of target licensees | Non-exclusive licensing scenario |
⚖️ Triangulation — Weighted Synthesis
Bridge EY 2018 → Adjusted 2018 → Estimated Value 2026. Five methods weighted by relevance and methodological robustness.
Adjusted Value 2018
€11.2M
Triangulated · Weight 100%
Estimated Value 2026
€23.9M
Weighted components
Final Range 2026
€47.5–119.6M
Conservative → Optimistic
Recommended Midpoint
€80.2M
v6.3 · post-EPO win
A. Summary — 5 Methods Compared (2018 Valuation)
| Method | Low (€M) | Mid (€M) | High (€M) | Weight | Weighted Value | Context |
|---|---|---|---|---|---|---|
| RFR EY 2018 (reference) | 14.1 | 16.1 | 18 | 0 — excluded | — | IP regulatory framework / Singapore financing |
| Adjusted RFR (Method 1) | 23 | 35 | 43 | 30% | 10.5 | Differentiated rates + phased WACC |
| MEEM (Method 2) | 25 | 34 | 41 | 35% | 11.9 | Primary method for core IP — AICPA standard |
| W&W Method (Method 3) | 23 | 35 | 43 | 25% | 8.75 | Measurable differential advantage |
| Adjusted Replacement Cost (M4) | 20 | 24 | 28 | 10% | 2.4 | Credible floor — lower bound only |
| ROV (Method 5) | 25 | 46 | 79 | 0 — transparency | — | Expected value at TRL 6 — presented for info |
| ✅ ADJUSTED VALUE 2018 (triangulated) | €33.55M | |||||
B. Bridge Waterfall — EY 2018 → Adjusted 2018 → Value 2026
| Step | Value (€M) | Delta |
|---|---|---|
| EY 2018 — Low Case | 14.1 | Baseline |
| EY 2018 — High Case | 18 | +3.9 |
| Royalty rate correction | 13 | +13 |
| WACC correction (30%→25%) | 5 | +5 |
| Replacement cost floor | 4 | +4 |
| Adjusted value 2018 (mid) | 34 | — |
| eVTOL market addition | 45 | +45 |
| Post-EPO WACC compression | 18 | +18 |
| Defence / infringement option | 12 | +12 |
| ESTIMATED VALUE 2026 (mid) | €105M | +71 |
C. Final Valuation Range 2026
| Scenario | Value (€M) | Description |
|---|---|---|
| Conservative scenario | €88M | Military UAV + helicopters + 1 eVTOL deal. WACC 25%. TRL 6→7. |
| Base scenario | €118M | Base 2018 + full eVTOL + WACC 22%. 2-3 deals. Success prob. 65-80%. |
| Optimistic scenario | €148M | Full exploitation + licences + infringement settlements. WACC 18%. |
| Monte Carlo P50 | €98M | Median across 10,000 simulations — incorporates TRL 6 and market risk |
| Monte Carlo P75 | €128M | 75th percentile — favourable but not exceptional scenario |
| ✅ RECOMMENDED RANGE (v5): EUR 88 – 148M · Midpoint EUR 118M | Post-EPO win · March 2026 | |
📊 BP vs Valuation Model — Revenue Reconciliation
Explains the difference between Pascal's Business Plan (Rev 6.2.5) and the EY-based valuation model. Both are correct — they cover different scope.
A. Revenue Comparison (EUR '000)
| Source | Y1 | Y2 | Y3 | Y4 | Y5 | Y6 | Y7 |
|---|---|---|---|---|---|---|---|
| Pascal BP (Rev 6.2.5) | 0 | 2,784 | 9,119 | 49,271 | 99,979 | 160,456 | 233,607 |
| EY 2018 (used in valuation model) | 0 | 2,205 | 6,206 | 29,315 | 60,395 | 107,530 | 172,905 |
| Delta (BP − EY) | 0 | +579 | +2,913 | +19,956 | +39,584 | +52,926 | +60,702 |
| Ratio (BP / EY) | N/A | 1.26× | 1.47× | 1.68× | 1.66× | 1.49× | 1.35× |
B. Why the Numbers Differ — Scope, Not Error
| Factor | In BP? | In EY? | Revenue Impact (7yr, EUR k) | Explanation |
|---|---|---|---|---|
| UAV Hybrid Powerplants | Yes | Yes | 101,760 | Both include — EY at lower volumes |
| VTOL 40kW drives | Yes (€29.5M) | NO | 29,534 | New segment post-2018 — eVTOL market |
| VTOL 120kW drives | Yes (€31.4M) | NO | 31,352 | New segment post-2018 — eVTOL market |
| Hybridised APU 130kW | Yes (€10.8M) | NO | 10,815 | Auxiliary power — not in EY scope |
| Manned systems | Yes | Yes (lower) | In UAV delta | Volume difference only |
| MRO | Yes (€54.6M) | Yes (€17.7M) | 36,866 | BP assumes higher MRO growth rate |
| Sales to HAC | NO (separate) | Yes (€21.5M) | −21,524 | EY includes HAC sales — BP excludes |
C. Valuation Comparison
| Metric | Pascal BP | Valuation Model | Explanation |
|---|---|---|---|
| Company value at start | EUR 44.2 M | N/A (patents only) | BP values entire company pre-funding |
| Patent portfolio value | Not separated | EUR 48–120 M | Model isolates IP value specifically |
| Revenue base | Own projections (higher) | EY 2018 (independent, lower) | EY = conservative third-party source |
| eVTOL revenues | Included in segments | Separate bridge +€45M | Both include — different presentation |
| EPO win impact | Not explicitly valued | WACC compression +€18M | Model quantifies risk reduction |
| Capital required | EUR 24 M | Not modelled (IP-only) | BP covers operational funding |
| EBITDA Year 7 | €95.9M (41% margin) | Not modelled (royalty model) | Different construct: EBITDA vs royalty |
| Founder share | 46% (€20.2M) | Not modelled | Equity structure not in scope |
D. Key Message for Investment Committee
✓ The Valuation Model is Deliberately Conservative
It uses independent EY revenue forecasts (35% below the BP) and values only the patent portfolio, not the operating company. The BP's higher revenues represent upside not captured in the model — this is a feature, not a bug. A fund that validates the BP revenues would see the valuation move toward the upper end of the EUR 48–120M range or beyond.
🔷 Portfolio Stratification
Addresses the iso-value critique: patents are NOT equal. Each patent weighted by commercial applicability, blocking power, citability, and residual life. Scoring inputs editable below — recalculates allocation automatically.
A. Patent Scoring Matrix — 6 Patents × 4 Dimensions
⚑ Blocking Power scores for EMD3 Drive vs Safran claims require Pascal Chrétien validation before investor presentation
| Patent / Family | Priority | Expiry | Residual (yrs) | Blocking Power /5 |
Citability /5 |
Commercial /5 |
Life Score /5 |
RAW Score | Weight % |
|---|---|---|---|---|---|---|---|---|---|
| TOTAL RAW SCORE | 100% | ||||||||
B. Portfolio Value Allocation by Patent
| Patent | Weight % | Value — Low (€M) × €88M |
Value — Base (€M) × €118M |
Value — High (€M) × €148M |
Residual (yrs) | €/Year (Base) | Status |
|---|---|---|---|---|---|---|---|
| TOTAL PORTFOLIO | 100% | 88 | 118 | 148 | — | — |
C. Score Visualisation
⏳ Temporal Decay Model
Replaces EY's linear obsolescence factor with a per-patent inverted-S decay curve. Three separate erosion mechanisms: legal (expiry), technological (design-around), and commercial (royalty compression).
A. Decay Parameters — Three Erosion Mechanisms
Three mechanisms modelled separately — NOT bundled into WACC (which was EY's approach)
| Parameter | Low | Base | High | Unit | Source / Rationale |
|---|---|---|---|---|---|
| Legal Erosion — Residual Life per Patent | |||||
| Residual life — GEMD Root (yrs) | 3 | 4 | 5 | years | Expiry 2030. Low = 3yr (competitor prep starts early) |
| Residual life — GEMD Power (yrs) | 4 | 5 | 6 | years | Expiry 2031 — 5yr residual base |
| Residual life — GEMD FW (yrs) | 4 | 5 | 6 | years | Expiry 2031 — 5yr residual base |
| Residual life — EMD3 Drive ⭐ (yrs) | 8 | 9 | 10 | years | Expiry 2035 — KEY PATENT. EPO win extends effective life |
| Residual life — Matrix Converter (yrs) | 8 | 9 | 10 | years | Expiry 2035 — priority 23/09/2015 (v5 correction) |
| Residual life — Optical App (yrs) | 8 | 9 | 10 | years | Expiry 2035-36 — 9yr residual base |
| Value drop in last 3yr pre-expiry (%/yr) | 0.30% | 0.45% | 0.60% | %/yr | Competitors begin design-around 3-4yr before expiry |
| Technological Erosion | |||||
| Design-around horizon — EMD3 Drive (yrs) | 4 | 6 | 8 | years | ⚑ Confirm with Pascal Chrétien |
| Design-around horizon — Matrix Converter (yrs) | 5 | 7 | 9 | years | Broadest claims — harder to work around |
| Annual tech erosion rate after design-around (%) | 5% | 3% | 1% | %/yr | Post design-around: competitive moat narrows |
| EPO win impact on tech erosion (multiplier) | 0.30 | 0.50 | 0.70 | multiplier | EPO win reduces tech erosion by 30-70% — Safran deters copycats |
| Commercial Erosion | |||||
| Royalty rate compression per renegotiation (%) | 10% | 15% | 20% | % of rate | Each licence renewal: licensees negotiate down 10-20% |
| Years between renegotiations | 3 | 5 | 7 | years | Typical licence term 5yr with renewal |
B. Composite Decay Curve — Annual Value Index per Patent (Year 0 = 1.000)
| Patent / Year → | Y+0 | Y+1 | Y+2 | Y+3 | Y+4 | Y+5 | Y+6 | Y+7 | Y+8 | Y+9 | Y+10 | EY Factor (Y+15) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| GEMD Root | 1.000 | 0.968 | 0.775 | 0.463 | 0 | 0 | 0 | 0 | — | — | — | 0 |
| GEMD Power | 1.000 | 0.958 | 0.937 | 0.750 | 0.448 | 0 | 0 | 0 | — | — | — | 0 |
| GEMD FW | 1.000 | 0.958 | 0.937 | 0.750 | 0.448 | 0 | 0 | 0 | — | — | — | 0 |
| EMD3 Drive ⭐ | 1.000 | 0.963 | 0.927 | 0.892 | 0.859 | 0.826 | 0.823 | 0.649 | 0.382 | 0 | — | 0 |
| Matrix Converter ★ | 1.000 | 0.963 | 0.927 | 0.892 | 0.859 | 0.826 | 0.823 | 0.649 | 0.382 | 0 | — | 0 |
| Optical App | 1.000 | 0.963 | 0.927 | 0.892 | 0.859 | 0.826 | 0.823 | 0.649 | 0.382 | 0 | — | 0 |
| EY Uniform (reference — same rate for all) | ||||||||||||
| EY Uniform | 1.000 | 0.967 | 0.933 | 0.900 | 0.867 | 0.833 | 0.800 | 0.767 | 0.733 | 0.700 | 0.667 | 0.500 |
D. Key Insight — Why Proper Decay Improves Credibility vs EY Linear Model
✓ Matrix Converter (v5 corrected)
Priority 2015, expiry 2035 — 9yr residual. At Y+7 decay = 0.65. EPO win maintains competitive moat. Consistent with EMD3 Drive profile.
⚠ GEMD 2011 Patents — Short Life
At Y+7 these patents have expired. EY assumed 8yr+ of value. Corrected model reduces their contribution accordingly.
✓ EPO Win — Single Biggest Value Lever
Reduces technological erosion by 50% on EMD3 Drive. Without EPO win: design-around horizon 4yr. With win: 6yr+. Impact: +€15-20M total.
✓ Net Impact vs EY Linear Model
Same overall range (€88-148M) maintained — but distribution is more accurate: core patents weighted up, 2011 defensives weighted down.
📊 EY RFR 2018 — Reference Model
Original Ernst & Young Royalty Relief model. Used as baseline reference only. Excluded from triangulation due to regulatory framework and conservative bias. Low: €14.1M · High: €18M.
Reference values — EY 2018 output
| Parameter | Low | Mid | High | Note |
|---|---|---|---|---|
| Revenue Forecasts (EUR '000) — as per EY | ||||
| FY2018 | — | — | — | Historical year |
| FY2022 (ramp-up) | 12,000 | 18,900 | 25,000 | Military UAV + helicopter ramp |
| FY2025 (peak) | 25,000 | 45,000 | 60,000 | Full commercialisation |
| EY Valuation Output | ||||
| Applied royalty rate | 10% | 11% | 12% | EY Tier 1 range |
| WACC applied | 30% | 30% | 30% | Single flat rate — no phasing |
| eVTOL market included | No — market absent from 2018 analysis | Key gap | ||
| EY 2018 Valuation Output | €14.1M – €18M | Reference only — excluded from triangulation | ||
🔵 RFR Adjusted — Method 1
Corrected Royalty Relief: differentiated rates by segment + phased WACC. Same EY forecasts. Weight: 30% in triangulation. Range: €23M–€43M.
Method 1 — Key Corrections vs EY Baseline
| Correction | EY Assumption | Adjusted Value | Justification |
|---|---|---|---|
| Royalty rate — Military UAV | 10% | 12.5% | Defence premium: EMP resilience, Tier 1 avg 9.7-11.3% |
| Royalty rate — eVTOL | N/A | 13.5% | New segment added — avionics propulsion analogy |
| WACC — TRL 6 (demo) | 30% | 25% | Post-EPO: invalidation risk near zero |
| WACC — TRL 9 (commercial) | 30% | 16% | Post-certification: residual risk minimal |
| Method 1 Adjusted RFR Range | €23M – €43M | Weight: 30% | |
🟢 MEEM — Multi-Period Excess Earnings Method
Method 2. AICPA primary standard for core IP valuation. Total revenues less return on contributory assets (brand, workforce, working capital) = excess earnings attributable to patents. Weight: 35%. Range: €25M–€41M.
MEEM — Principle and Output
| Component | Low (€M) | Mid (€M) | High (€M) | Note |
|---|---|---|---|---|
| Contributory Asset Charges (CAC) | ||||
| Brand / marketing asset return | 0.8% | 1.0% | 1.2% | % of revenues |
| Assembled workforce return | 1.5% | 2.0% | 2.5% | % of revenues |
| Working capital return | 2.0% | 2.5% | 3.0% | % of revenues |
| MEEM Valuation Output | ||||
| Total revenues (EY forecast) | €12M peak | €18.9M peak | €25M peak | FY2025 |
| Net patent excess earnings | ~€7.5M/yr | ~€12M/yr | ~€16M/yr | After CAC deductions |
| MEEM NPV (discounted excess earnings) | €25M – €41M | Weight: 35% · Primary method | ||
🟡 With & Without Method (W&W)
Method 3. Measurable differential advantage: EMD3 system vs conventional gearbox baseline. Captures cost savings, performance premium, and market access. Weight: 25%. Range: €23M–€43M.
W&W — Differential Value Components
| Value Driver | Low (€M) | Mid (€M) | High (€M) | Note |
|---|---|---|---|---|
| Weight savings vs gearbox (system) | 2.5 | 4.0 | 6.0 | 30-40% weight reduction — fuel/range premium |
| EMP immunity premium (military) | 4.0 | 7.0 | 12.0 | DoD qualification premium for EMP-resilient drive |
| Maintenance cost reduction (MRO) | 3.5 | 6.0 | 9.0 | No gearbox oil, fewer mechanical parts |
| eVTOL market access (without = excluded) | 8.0 | 15.0 | 14.0 | Without EMD3: cannot address distributed propulsion segment |
| Certification cost avoidance | 5.0 | 3.0 | 2.0 | EPO precedent reduces invalidation defence cost |
| W&W Total Differential Value | €23M – €43M | Weight: 25% | ||
🟠 Adjusted Replacement Cost — Method 4
Economic reproduction cost: what would it cost to recreate this IP from scratch? Used as floor constraint / lower bound only. Weight: 10%. Range: €20M–€28M.
Reproduction Cost Components
| Cost Category | Low (€M) | Mid (€M) | High (€M) | Note |
|---|---|---|---|---|
| R&D investment to date (Pascal Chrétien) | 2.1 | 2.8 | 3.5 | Inventor time, prototypes, testing |
| Patent prosecution costs (6 families) | 0.6 | 0.9 | 1.2 | Filing, prosecution, maintenance across jurisdictions |
| EPO litigation (Safran precedent) | 1.5 | 2.5 | 4.0 | Opposition proceeding — non-recurring, strategic value |
| Knowledge base & tacit know-how | 5.0 | 8.0 | 12.0 | Embedded in inventor — hard to replicate |
| Time-to-develop premium (opportunity cost) | 8.0 | 10.0 | 7.0 | 15yr development: first-mover advantage |
| Competitive intelligence / FTO value | 2.8 | — | 0.3 | Safran blocking: deterrence value |
| Adjusted Replacement Cost Total | €20M – €28M | Weight: 10% · Floor only | ||
🔴 ROV — Real Option Value
Method 5. Black-Scholes option pricing at TRL 6. Expected value across commercialisation scenarios. Presented for transparency only — weight 0% in triangulation due to high uncertainty at current TRL. Range: €25M–€79M.
Real Option Parameters (Black-Scholes)
| Parameter | Low | Base | High | Note |
|---|---|---|---|---|
| Underlying asset value (S) — EUR M | 23 | 35 | 43 | Adj RFR mid as proxy for underlying |
| Strike price (X) — investment to commercialise, EUR M | 8 | 12 | 18 | TRL 6→9 development + certification |
| Time to expiry (T) — years | 5 | 7 | 10 | Option window: first licence agreement |
| Volatility (σ) — asset value uncertainty | 35% | 45% | 60% | eVTOL market + patent risk |
| Risk-free rate (r) | 3.5% | 3.5% | 3.5% | ECB rate |
| Success probability (TRL 6 → commercial) | 40% | 55% | 70% | Industry benchmark TRL 6 |
| ROV Expected Value | €25M – €79M | Weight: 0% · Transparency only | ||
🎲 Monte Carlo Simulation
10,000 simulations across all key variables: royalty rates, WACC, market size, penetration, timing, TRL success. P50 = €98M · P75 = €128M.
P25 (pessimistic)
€100.6M
25th percentile
P50 — Median
€150.2M
Central estimate
P75
€222.8M
75th percentile
P90
€321.3M
90th percentile
Distribution Output — Simulated Valuation Range
Key Sensitivity Drivers
| Variable | Range Tested | Impact on P50 | Direction |
|---|---|---|---|
| eVTOL market penetration rate | 0.5% – 2.5% | ±€28M | ↑ High sensitivity |
| WACC — post-EPO | 18% – 28% | ±€22M | ↑ High sensitivity |
| First licence timing | 2yr – 5yr | ±€18M | ↓ Negative if delayed |
| Royalty rate — military UAV | 10% – 17% | ±€12M | ↑ Moderate |
| TRL 6→9 success probability | 40% – 75% | ±€15M | ↑ Moderate |
| EPO win (design-around horizon) | 4yr – 8yr | ±€8M | ↑ Moderate |
🌪️ Tornado Sensitivity
Top 6 variables stressed ±1 sigma. All formulas linked to Triangulation. Base valuation: €23.87M (weighted 2026).
Tornado Chart — Impact on Base Valuation (EUR M)
| Variable | Base | Low (-1σ) | High (+1σ) | Δ Low (€M) | Δ High (€M) | Swing (€M) |
|---|---|---|---|---|---|---|
| Global WACC | 22% | 28% | 17% | -18 | +15 | 33 |
| eVTOL market penetration | 1.2% | 0.5% | 2.5% | -6 | +10 | 16 |
| Infringement premium | €5M | €0 | €15M | -5 | +10 | 15 |
| Avg royalty rate | 12.5% | 9.5% | 16.5% | -6 | +8 | 14 |
| TRL full-path probability | 60% | 47% | 72% | -5 | +5 | 10 |
| First licence timing | 3yr | 5yr | 1.5yr | -5 | +4 | 9 |
⚖️ Litigation / CashBurn Analysis
IPR costs, litigation scenarios, and cash reserve requirements across key jurisdictions (EPO, USPTO, Singapore).
Litigation Scenario Matrix
✓ EPO — Safran (COMPLETED)
Opposition won Dec 2025. Establishes precedent. Deterrent effect on Joby, Archer, Beta Technologies.
⚠ USPTO — Potential Challenge
IPR petition risk: ~15% probability. Cost: USD 350K–600K. Timeline: 18-24 months. Cash reserve: USD 700K recommended.
✓ Singapore — Registration Valid
All 6 patents in force. Annual maintenance costs: SGD 4,200/yr. No active challenges.
⚠ Infringement — Gray Eagle DoD
FTO analysis in progress. DoD procurement risk: 5-15% probability requires licensing. Estimated licence value: €5M–€12M.
✓ Joby / Archer / Beta
FTO analysis: EMD3 Drive claims overlap identified. Pre-emptive licensing approach recommended. Expected timeline: 2027-2028.
✓ Cross-Licensing Reserve
10% royalty discount modelled for cross-licence scenarios. Portfolio companies typically negotiate cross-licences at renewal.
⏱️ Time to Market Sensitivity
TRL 6→9 roadmap. Impact of first revenue timing on NPV across all scenarios.
NPV Sensitivity — First Licence Timing (Base scenario €118M)
| First Licence Year | NPV Impact (€M) | % of Base Value | Scenario |
|---|---|---|---|
| 2027 (2 years — optimistic) | +€12M vs base | +10% | Fast TRL progression + early adopter |
| 2028 (3 years — base) | 0 (reference) | — | Base case assumption |
| 2029 (4 years) | -€8M | -7% | Certification delay |
| 2031 (5 years — conservative) | -€18M | -15% | Market timing miss |
| 2033 (7 years — stress) | -€35M | -30% | Severe delay — GEMD patents expired |
🏭 Execution Haircut
Commercial execution risk: licence negotiation success rates, deal closure probability by segment.
Execution Risk by Segment
| Segment | Target Licensees | Success Probability | Haircut Applied | Mitigant |
|---|---|---|---|---|
| Military UAV (20-130kW) | Gray Eagle DoD + 2 others | 65% | 35% | EPO win reduces negotiation leverage needed |
| Civil Helicopters (130-320kW) | Airbus H / Leonardo / Safran | 55% | 45% | Safran EPO precedent = strong opening position |
| eVTOL (40-120kW) | Joby / Archer / Beta / Wisk | 50% | 50% | First-mover FTO risk incentivises early deal |
| HAC (portfolio licence) | HAC entity | 75% | 25% | Strategic alignment — highest probability |
| Blended execution haircut (base) | 40% | Applied to gross royalty revenues in MEEM/W&W | ||
🧠 KnowHow / KeyMan Risk
Knowledge dependency analysis. Pascal Chrétien key-man assessment and mitigation strategies.
Key-Man Risk Assessment
⚠ KeyMan Concentration
Pascal Chrétien: inventor on all 6 patents. Technical expert for EPO proceedings, FTO analysis, and licensee negotiations. Single point of failure.
⚑ Mitigation Plan Required
Recommended: (1) Technical documentation package (2) Co-inventor IP assignment (3) Consulting agreement with (4) Knowledge transfer programme.
✓ EPO Win Reduces Dependency
Post-EPO ruling, technical expert testimony less critical for near-term defence. Precedent is established. Future IPR proceedings require less inventor involvement.
⚑ Know-How Valuation
Tacit knowledge estimated at €5-12M in replacement cost. Not separable from patent value but represents embedded commercial advantage.
✓ TRL Documentation
TRL 6 prototype demonstrated. Technical documentation exists for submission. Reduces but does not eliminate key-man dependency.
✓ Investor Haircut
KnowHow risk incorporated in execution haircut (5-8% discount) and WACC patent risk premium component (2-3% of 25% base WACC).
💥 Tech Disruption Risk
Disruptive technology threat analysis. Design-around scenarios. Competitive moat assessment post-EPO win.
Technology Disruption Scenarios
| Threat Scenario | Probability | Impact on Value | Mitigant |
|---|---|---|---|
| Direct design-around (EMD3 Drive claims) | 15% (post-EPO) | -€20-35M | EPO examiner confirmed claim 3 anticipates Safran. Design-around horizon: 6yr+ base. |
| Alternative EMP-resilient technology | 10% | -€15-25M | Optical drive architecture unique — no known EMP-immune alternative at TRL 6 |
| Hydrogen propulsion displaces electric | 8% by 2035 | -€10-20M | eVTOL market: battery-electric dominant through 2035. H2 risk post-2035 only. |
| Solid-state battery reduces drive premium | 20% | -€8-15M | Weight savings still valid even with SSB. EMP immunity unaffected. |
| Competitor portfolio blocking | 5% | -€30-50M | FTO analysis shows clear path. GEMD Root establishes 2010 priority antecedence. |
| Expected tech disruption haircut (probability-weighted) | -€8-12M | Incorporated in Monte Carlo volatility parameter | |
💱 FX Risk Analysis
EUR/USD/AUD exposure from royalty currency mismatches. Hedging scenarios and sensitivity.
Currency Exposure Matrix
| Revenue Stream | Currency | % of Total | FX Risk | Hedging Recommendation |
|---|---|---|---|---|
| Military UAV — US DoD | USD | 35% | EUR/USD exposure | Natural hedge via USD costs. Forward cover for >€5M tranches. |
| Civil Helicopters — Airbus / Leonardo | EUR | 25% | None | Functional currency match |
| eVTOL — US companies (Joby etc.) | USD | 30% | EUR/USD exposure | Licence agreements: USD-denominated with EUR floor |
| Australia / Pacific (IP Australia) | AUD | 5% | AUD exposure | Minor exposure — maintenance costs only |
| Singapore ( entity) | SGD | 5% | SGD exposure | Minor exposure — entity operating costs |
| Blended FX haircut (base EUR/USD 1.08) | -3% to -7% | Assumes 10% adverse EUR/USD move from baseline | ||
🔑 User Management
Create and manage investor access. Admins can create investor accounts. Only Super Admin can create admin accounts.
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🗑️ Maintenance
Keeps last 2000 lines of API logs and last 500 access log entries. Also runs automatically on admin login.
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