Hi tkc,
Understood you to be referring to this. And maybe a PE multiplier would be involved in valuing Safend, and the clawback would be affected by this.
But my guess is that the clawback is an accounting rather than a valuation tool. So the penalty would be linear with the errors - at least insofar as they affect Wave's ability to recover monies that are due. I haven't checked this assumption (not sure if it is even possible) because I have better things to do with my time!!
If this is so, I can see that the judgement about bad/doubtful debts which are unpaid for more than a year should be written off. But do you think that the clawback would affect a revenue item for which recognition is merely deferred? I would not. But maybe the legal agreement made this clear.
Assuming my presumptions are correct, then the whole $1m was not in play. But maybe around $600k was. This amount is a mere rounding error with respect to the CEO's strategic blunders (eg WXP and whatever that portal was)!!
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