Freedom to Operate (FTO) Analysis

The valuation of a company's existing order book or contracted but undelivered revenue at the measurement date. Backlog is recognised as a contract-based intangible asset under IFRS 3 and ASC 805 when it arises from contractual or legal rights.

An assessment of the sustainability, predictability, and growth trajectory of a company's revenue streams, examining factors such as the proportion of recurring versus one-time revenue, customer concentration, contract duration and renewal rates, pricing power, and the distinction between organic and acquisition-driven growth. Revenue quality analysis is a core component of financial due diligence in M&A transactions and directly impacts the selection of appropriate valuation multiples.

A valuation methodology that estimates a company's value by analysing the prices paid in comparable M&A transactions. Precedent transactions incorporate control premiums and strategic value that may not be captured in public market comparables.

A method of segmenting customers into groups based on shared characteristics or time of acquisition, then tracking their behaviour and value over time. Cohort analysis is essential for understanding customer lifetime value trends, retention dynamics, and the true unit economics of growth-stage businesses.

An output generated by an artificial intelligence system — particularly large language models — that is factually incorrect, fabricated, or nonsensical, yet presented with apparent confidence. AI hallucinations pose significant risks in applications such as legal research, medical advice, and financial analysis, and their mitigation through grounding, retrieval-augmented generation, and human oversight is a key challenge in enterprise AI deployment.

A systematic review of a company's intellectual property portfolio — including patents, trademarks, copyrights, trade secrets, domain names, and licences — to assess ownership, validity, enforceability, freedom to operate, and commercial relevance. IP audits are essential in M&A due diligence, technology licensing negotiations, and litigation preparation.

A legal framework that governs the use, modification, and distribution of open source software, defining the rights and obligations of users and contributors. Key licence types include permissive licences (MIT, Apache 2.0, BSD) that allow broad commercial use with minimal restrictions, and copyleft licences (GPL, AGPL) that require derivative works, with their source code, to be released under the same terms when they are distributed (or, under the AGPL, offered to users over a network).

The sharp decline in revenue experienced by a pharmaceutical or technology company when patent protection expires on a key product, exposing it to generic or competitive alternatives. Patent cliffs are a critical consideration in the valuation of patent-dependent businesses, as revenue can decline 70-90% within 12-24 months of patent expiry in the pharmaceutical sector.

How accurate are Opagio's royalty rate benchmarks?

They are indicative. The free Single-Asset Value Check applies a published median royalty rate for the asset type, with its source, but real rates vary by deal, so a formal valuation needs a rate benchmarked from comparables.

How accurate is the Asset Valuator in Opagio Intangibles?

The Asset Valuator applies the method you choose to the assumptions you enter, so its fair value estimate is only as reliable as those inputs. Opagio is not a valuer, and its outputs are not a signed valuation.

What happens if I disagree with Opagio's valuation?

All valuations depend on assumptions. Opagio provides sensitivity analysis so you can adjust inputs, test different scenarios, and align conclusions with your own views.