Footnotes to history

I don't recall seeing these referred to elsewhere, though I apologize if someone's already posted on this. However, the Mother of All mega-value uber-readers points me towards Skype financials prior to the eBay deal. Interesting reading. The 2004 statements give a pretty detailed breakdown of costs ($887k in travel expenses?!) and assets ($282k in furniture, fixtures, and office equipment, $32k in leasehold investments). In the first six months ending 30 June 2005, the company had $20.9m in cash, six month revenues of $23.7m (which means the company really motored in H2), capex of $341k (more than double the total for the previous full year), and net fixed assets of $532k.

There's more of interest related to capitalization, but I haven't had time to go through it yet in detail. Both filings also contain an intriguing set of statements on related party transactions.
(UPDATE: a reader asks, "What's your point?" Well, I find the consultancy and license fees interesting given the size of the company and its payroll at the time. More importantly, the wording of the license makes me wonder whether eBay actually controls the underlying Skype technology beyond the relatively limited uses for which it is defined.)

Here's the 2004 version:

"In November 2003, Skype signed an agreement with a software development company [could this be the one?] which granted Skype a perpetual non exclusive license on its software, with exclusive use of the software for the limited purpose of providing P2P telephony, multi-directional video communications between end users via the internet. The founders of this software company are also founding shareholders (and senior management) of Skype.

In remuneration of license rights granted to Skype, the software company receives a royalty fee which was $38,316 in 2004 (2003: $ nil) and which is capped at $2.0 million per year.

In addition to the license rights, in 2004, the Company also received consulting services from the same related party in connection with the development of their software and also applications. Costs incurred in relation to these consulting services, amounted to $1.6 million for the year ended December 31, 2004 (2003: $0.6 million).

As of December 31, 2004, the amount payable under this contract is $0.1 million (2003: $ nil). During the year 2004, a total amount of $1.5 million has been paid in relation to the above contract."

Here's the 2005 version:

"In November 2003, Skype signed an agreement with a software development company which granted Skype a perpetual non exclusive license on its software, with exclusive use of the software for the limited purpose of providing P2P telephony, multi-directional video communications between end users via the internet. The founders of this software company are also founding shareholders (and senior management) of Skype.

In remuneration of license rights granted to Skype, the software company receives a royalty fee which was $0.4 million for the period ended June 2005 (for the period ended June 2004: $ nil) and which is capped at $2.0 million per year.

In addition to the license rights, the Company also received consulting services from the same related party in connection with the development of their software and also applications. Costs incurred in relation to these consulting services, amounted to $0.1 million for the period ended June 30, 2005 (for the period ended June 30, 2004: $1.1 million).

As of June 30, 2005, the amount payable under these contracts is $0.3 million (2004: $48,187). During the period ended June 30, 2005, a total amount of $0.3 million has been paid in relation to the above contracts. "