REX
Royalties Analytical system
Websites for users of royalties
These websites have been conceived and developed by Arthur Lipper to be helpful to those considering royalty transactions.
REX-basic – The basic site, for those considering a financing based on the payment by the royalty issuing company to one or more investors of an agreed percentages of revenues, to be paid for an agreed period of time. As is the case in each of the websites, there are samples and a FAQ section, both of which are intended to be educational.
REXComparator.com – Provides users with an ability to compare the results of royalties based on the same projected revenues, but using different payment terms in different periods. As with each of the websites, the results are displayed in both tabular and graphic form.
REXdebt-shareRoyalties.com – Shows the impact of the royalty issuer borrowing an agreed amount, for a negotiated number of years, at an agreed rate of interest and with agreed amortizations. There is then a relatively modest royalty, commencing on repayment of the loan. The reason for the lesser royalty rate or percentage of revenues than in the case of royalties not including a debt feature, is the fact that on repayment of the loan the investor has no cost of the royalty, which entitles royalty payments for an agreed number of future years. We believe this approach may produce the best result for both the investor and the business owners if they are able to achieve the revenues they have projected.
REX-PV.com – A tool to study the calculated present value of an investment in the years following purchase of a royalty. The website also allows users to see the Internal Rate of Return (IRR) and Cost Multiplier at each year and, most importantly, to see the result of selling the royalty to another investor for the amount of money necessary for the original investor to receive a predetermined IRR, all based on the royalties as projected (but not guaranteed) by the royalty issuing company. The website allows users to apply a discount to the projected revenues. For experienced royalty investors this is the most important website, as it does what no other calculator has been able to do before. The calculated results of the user-entered data are presented in tabular and graphic form.
Performance-based Scaled Royalties: rexscaledroyalties.com
Useful for negotiation of a transaction. If a company exceeds its revenue projections, it is rewarded; if it misses its revenue projections, investors are compensated. Users define the number of years in a Selected Adjustment Period (SAP) and the percentage variance from Projected Revenues which trigger a Plus or Minus condition. They may negotiate the resulting change in royalty rates and other elements of the transaction, were the trigger points to be reached.
Royalty Issuer Assured Return: rex-riar.com
This powerful online model allows both investors and companies considering issuing a revenue royalty to begin with the level of investment return required, and then determine how to assure that return with a pattern of royalties payments over time. The cost of the assurance of financial performance by the company affects the rate of return, and this can be easily and quickly analyzed with the RIAR model. An additional convenience is that data entered into this model is automatically also available with the original, straightforward model at rexroyalties.com.
All websites are currently available free of charge. Models created are confidential, and password-protected.