SOB
Just doing some homework. Read the purchase announcements on the NMS website.
These payouts have to be a liability and should be disclosed unless there is a deal internally to defer paying out the previous owners of those companies.
I am surprised this was not part of the auditors report.
Maybe I am jumping to early but its pretty solid info I am working off.
My understanding with these earn outs is it incentivises the former owners to keep driving the businesses. If they do well over the three years they have an increased earing (final payout) potential. Some shares are thrown into the mix but the shares are not capped at a $ value rather a percentage of the final payout figure.
I was very nervous when the CFO was sacked prior to the end of year report. No sound, well run business does that unless they are forced to. He was sacked!!
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