Transcript
Genevieve Seney (00:00) hi, good afternoon, Jill.
Rebecca Kalmbach (00:02) Hello? Hi, Jill. Hi.
Genevieve Seney (00:06) We’re hopping off of other meetings. So one second.
Peter Bosworth (00:11) No worries. Okay. Sounds good.
Peter Bosworth (00:42) Sorry. Can you wait? It’s okay. Oh, here’s, Rebecca.
Rebecca Kalmbach (00:57) Hi guys. Sorry. Hey, Rebecca. How are you? Good. Sorry, my laptop is just a little slow this morning and I am jumping across meetings. So, sorry to keep you waiting.
Peter Bosworth (01:10) All good. No problem. Well, thanks for jumping on. So, yeah, I know we kind of had… a lot of back and forth on Friday and throughout the week. And for this call, I think we probably just want to see what kind of questions you have for Jen and I and how we can help and we’ll kind of open the floor to you if that’s a good place to start on your end. Sure. Yeah.
Rebecca Kalmbach (01:36) And we mostly Jill, I think caught you up, Jill’s coming back from vacation. So, she had a slew of emails and things to process this morning. Mostly caught Jill up. Russ has a conflict, but we’ll also catch him up based on where we land. I think Peter, my core questions are still just the two in the email.
Rebecca Kalmbach (02:02) So maybe we just start there and happy to unpack those or walk you through it just to clarify what we were asking and the difference in contracts. I think that’s probably the best place for us to start. So, let me pull that up. MMM. Okay.
Rebecca Kalmbach (02:32) So, I think that we spent a ton of time last week going back through all our emails back through the sheets back through everything that you guys saw.
Rebecca Kalmbach (02:41) I think our core question is still why we’re having the same conversation right now that we had with Mira in December. Because as we understand it, the contract that we signed with Mira does account for everything that we walked through with you and that’s over year one and year two of the addendum that we signed with you guys in December?
Peter Bosworth (03:16) Right. So, I think what our understanding… of that is just that… the amount of times that requests were submitted in the platform is just what they are in terms of the consumption data.
Rebecca Kalmbach (03:35) Totally totally aligned on the consumption data. Yep. But the consumption data that we walked through with Mira is the same consumption data that we’re walking through with you. But the payment terms are significantly different in what you’re proposing for us to sign now versus what we’ve already signed.
Peter Bosworth (03:57) And how do the payment terms differ?
Rebecca Kalmbach (04:01) The overage as you’ve outlined it in this agreement is due by June.
Peter Bosworth (04:09) Instead of over two years… due by June, like in the agreement that we’ve shared it being net 30 payment terms.
Peter Bosworth (04:31) Sorry. Okay. So I… guess I’m not. Yeah.
Genevieve Seney (04:36) Rebecca, do you want to share your screen of what you’re looking at? Sorry, just also trying to track what’s due in June yep.
Rebecca Kalmbach (04:50) I think this should work. Sorry, bear with me on zoom.
Genevieve Seney (04:53) No, you’re good.
Rebecca Kalmbach (04:56) Can you guys see this? Yes. Yep. Okay. So, Peter, I think this is the link that you shared across to us as the contract, right?
Genevieve Seney (05:08) Correct. It is, so.
Rebecca Kalmbach (05:10) This overconsumption, it’s… the same like totally agreed. We spent the time to make sure that we like ticked and tied everything that you guys have highlighted as overconsumption. It’s the same as what Mira highlighted for us in December. It includes our future spend through June, like what we anticipated using through June 20 26 that’s all incorporated in what we signed in December. So, this unallocated spend here is… now priced in at like a unit of one. But the total overage is this 32,000… that’s now being kicked into this service period of March through June. And then there’s kind of an additional unallocated 57 30, which I’m confused… as to why that would be actually an addition because we incorporated that into our projected spend with Mira. So this part is not clear to me, but this line item is already covered in the contract that we signed in December.
Peter Bosworth (06:30) Which line item?
Rebecca Kalmbach (06:31) The unallocated spend this overconsumption.
Genevieve Seney (06:38) So, maybe take a step back to, sounds like we’re aligned on the consumption, right? Like regardless of the conversation that was had in December, more volume was consumed than what was expected.
Rebecca Kalmbach (06:53) Yes. Yeah. And.
Genevieve Seney (06:55) so, basically, where we are today, right? Is that you have overconsumed again at the 120 percent clause, and that is what that sort of 32,000 dollars is in your spend. Yeah, in terms of what you’re over for this current contract year?
Rebecca Kalmbach (07:12) No. So we haven’t overconsumed again post the December adjustment. Like the December adjustment was meant to adjust for everything that we had overconsumed to date plus our projected spend through June of this year. So, there’s not like based on, the arrangement that we signed in December, we were adjusting for like everything that we’d over consumed in 20 25 and projected needs through June of 20 26. So that like the current payment schedule that we’re on is supposed to account for all of the over consumption from last year and the things that we projected through 20 26.
Genevieve Seney (08:04) Got that. I think too. So if we’re thinking about this, right? Like, so if you’re saying that everything that you projected is supposed, right? Right? Like it was supposed to cover that like agreed there, I think maybe where we’re missing each other is that we see what the total amount of is purchased. And then we’re also seeing where you’re over consuming. So, you know, consumed 87 new state licenses, which was over what you had anticipated. Is that correct? So you anticipated only 53 for?
Rebecca Kalmbach (08:40) The 87 were before the December agreement though.
Rebecca Kalmbach (08:51) So when we sign that in December, the point of signing that arrangement was to adjust for like that total over consumption, which is the 32,000 that you have in this agreement. So that totally aligned on the like over consumption totals.
Rebecca Kalmbach (09:07) But the payment terms for that 32,000 are what are scheduled out in the addendum that we signed in December. So… as we’re reviewing, this seems like it’s just a different arrangement of the same over consumption like it’s just a change in payment terms. Basically that’s being proposed… so that that’s what we’re trying to like reconcile. Yeah, exactly. So basically.
Genevieve Seney (09:43) The way that you understand it is that you’re saying that what you guys paid is not covering the total volumes that you’ve consumed. Like the payment is something about adding up in terms of what you paid for in the services delivered.
Rebecca Kalmbach (10:03) Services… delivered and the total like charge makes sense, the consumption makes sense? Okay? We are not clear like why we’re having this conversation right now? Because this is the same conversation that we had in December.
Jill Hamburg (10:26) Like we’re paying. We’re paying that money. We already agreed to pay the 32,000, but we agreed to pay it over time, not.
Genevieve Seney (10:33) Right?
Jill Hamburg (10:35) Now as one unit… because the numbers are the same, the.
Rebecca Kalmbach (10:39) Numbers are the same. So we’re we are like fully aligned on usage. There’s no, there’s no question for us on like usage or overconsumption or anything else. This scene I think is just a conversation around how that overconsumption is being built out to us and we felt good. We like signed the contract in December. We’re totally aligned, with what we signed then. So it’s so we’re just unclear on like the point of this contract being proposed.
Genevieve Seney (11:14) Got it. Yeah, I think what, and Peter feel free to jump in. I think where we need to maybe realign is just, the payment terms because I think, right, like basically what we’re saying now, right? Is that you essentially need an additional 33,000 dollars in spend to the December agreement based on your consumption and how you’re trending. And so that’s really what this addendum is that we, you overshot the December agreement by X amount of dollars. And so that’s when we have to have the kind of true up discussion. But it sounds like what you’re saying is that the, that is the discrepancy, and that you.
Rebecca Kalmbach (11:56) Yeah, that the December agreement incorporates all of our overconsumption. Okay, I can and maybe I can pull, I’ll pull that link up as well. That might help orient us. But that’s the table that I screenshotted in the email chain like, we went through the total overconsumption which is like 106 licenses and that’s paced out over two years in the addendum at 53 and 53. So… the amounts are the same. But the pacing is different in what you’re proposing that we sign now… yeah.
Genevieve Seney (12:40) And so, that goes back to sort of that 120 percent agreement. So it or sorry clause. So, if you’re overpacing by 120 percent exceeding the total contract value in an annual year, that’s when we need to do that sort of discussion we’re having now. And so I think understood what you’re saying. It sounds like maybe that part wasn’t specifically aligned because you took the one of seven split it into two years. But now we’re at 87 consumed with, you know, X amount of months left in this annual contract. And so I think maybe that’s where we’re losing each other is the 103 over the next two years. But since we’re in this annual contract, it’s not up till June. And this is how you’re pacing, we have to have this discussion and maybe that’s where we’re kind of missing each other.
Rebecca Kalmbach (13:28) But our addendum was also for two years, right?
Genevieve Seney (13:32) Because it would co turn with your contract, you have the renewal contract, correct? Okay?
Rebecca Kalmbach (13:38) So, this is the, just to show you this is the addendum right? That we signed. So this is like we are currently on this schedule and that accounts for the total overage… of what is 33 and 33.
Genevieve Seney (14:00) Yeah. So, so.
Rebecca Kalmbach (14:03) We, yeah, I think you’re getting our confusion now?
Peter Bosworth (14:10) Yeah. So I think like.
Rebecca Kalmbach (14:13) the we.
Peter Bosworth (14:14) have two, I think like I put in the email is just that we’re there are two agreements there’s the kind of renewal contract that governs the agreement that goes from June 24 to June 27. We’re in year two of that agreement, each year of that agreement is 16 800. And then we’re in the year two, the year one of the mere, the December agreement, yeah, which has, which?
Rebecca Kalmbach (14:40) Is year two of the msa, which?
Peter Bosworth (14:42) Is year two of the msa? And so in total, the amount of spend allocated in at this point in the contract is 67,000. And do we have alignment on that statement? So it’s basically just 16 800 times two plus the 32?
Jill Hamburg (15:09) Or whatever.
Rebecca Kalmbach (15:12) Yes. As long as we’re saying the msa is also now bound to the terms of the addendum?
Peter Bosworth (15:20) The msa is bound to the terms of the addendum?
Rebecca Kalmbach (15:23) So, like what we have outlined in the addendum now is the schedule because it adjusts like the term. Basically when we signed in December, the terms of the addendum are what we’re following as a payment schedule.
Genevieve Seney (15:41) Okay. So… you’re saying that… the April two or sorry, rather the addendum that you signed in December is what you’re anticipating the billing schedule be for everything?
Rebecca Kalmbach (15:57) Yes, because we asked for the billing schedule. So that was the other document that I screenshotted that’s in that chain with Mira. We asked for a consolidated billing schedule and received what we were told was a consolidated billing schedule… got it.
Genevieve Seney (16:17) And so I think we can like, we can definitely align on a billing schedule like that’s. Not a problem. We can consolidate everything into one. I think where we’re still maybe missing each other is that the volumes still don’t equal what sort of is owed I guess to date? And that’s where this like additional 33,000 dollars would be needed to cover how your consumption is trending.
Rebecca Kalmbach (16:46) So how, I guess, how is that possible?
Genevieve Seney (16:49) Yeah. I think that’s where we… maybe.
Rebecca Kalmbach (16:54) Would, again, because the, just to like say this out loud, I feel like I’m going crazy like the December and I recognize this is confusing for you all too. Like please understand we’re like empathetic on that note. But the December like the reason that we signed this addendum in December is to adjust for the total overconsumption up until December of last year plus our projected usage to June of 20 26. So we, and we confirmed that with Mira like that’s the table shows like all of that consumption. So that is the total of 106, for instance, new state licenses. Like I’m just using that because I feel like that’s the easiest number for us to kind of track across these. Sure. So the msa plus the addendum that we signed accounts for instance, 106 new licenses, which is everything we’ve consumed so far and our projected needs through June of 20 26. And that total overage is 67,000 amortized over two years, which is year two and three in the msa, which is year one and two in the addendum. Okay… we feel like good about that. We’re fully aligned on those terms. That is then in addition to everything that we paid in year one of the msa. So where does the additional 30,000 that you’re now proposing it’s due this quarter and, or is it a different schedule from like year one or year two of our addendum? Where does that fit? I?
Peter Bosworth (18:48) Have one clarifying question. So the way you just described the 53 in year one and the 53 in year two, made it sound like it made it sound like you’re kind of under the impression that those are 106 that can be used at any point between now and June 20 27.
Peter Bosworth (19:04) And that just the invoicing was amortized and that is only true insofar as you don’t exceed 120 percent of the then current contract year.
Rebecca Kalmbach (19:18) Yeah. Say that again, Jill. I.
Jill Hamburg (19:21) Think that is the part where we’re missing each other is, I don’t believe we talked about a pacing, Genevieve or Jenny. You’re talking about a pacing schedule. We’re just using those 106 at some point and we’re paying for those we asked for a payment schedule for those, but they’re what I don’t know that there was like a discussion of if we get to 87 of the 106 too quickly, we need to pay quicker. Well.
Rebecca Kalmbach (19:53) They’ve already been used… is the thing, no. So this is the future. This is just for the sake of billing because we’ve already used all of those like they have been consumed minus Jill, what like six?
Jill Hamburg (20:13) Minus six?
Rebecca Kalmbach (20:14) Yeah, you’re right? Yeah. But I think that’s it though like.
Genevieve Seney (20:18) I think the way that Jill described it, I think that’s where this all hinges on.
Rebecca Kalmbach (20:27) So, so,
Jill Hamburg (20:29) but Mira knew that if we already used them in December, then Rebecca’s… point, why are we being asked to change the payment schedule if we already knew we are at 87 in December and plan to have a payment plan of that going forward. Why is that different now?
Genevieve Seney (20:49) Yeah. I think where this likely got misconstrued is probably a volume that needed to be covered. And maybe something like the upcoming consumption not being taken into effect in terms of how quickly the 87 would be used, the.
Rebecca Kalmbach (21:07) future consumption was incorporated correctly into the totals. But if there’s a limit, I mean that doesn’t really make sense because it would be like a retroactive limit. Like the point of signing this contract was to adjust payment for the overage.
Genevieve Seney (21:27) Understood. Yeah. Okay. I think if.
Rebecca Kalmbach (21:32) maybe I could propose like what might be happening is like this is getting flagged in your system. Like if you all have an automated flag system that’s like 120 percent of whatever is like insert at this certain point or this quarter, I could see this like triggering something outside of how things usually run because it’s an adjustment for an overage that probably is not running correctly with like what we’ve actually consumed versus what is like input in this addendum as the number for instance, like that, maybe that is where the percentage is flagging that then like caused you all to come back to us with the 30 additional.
Genevieve Seney (22:15) Yeah, essentially like how this typically, when this happens, right? It’s that you came to this agreement that you would have 53 additional in year two and then 53 available for year three. And then essentially, right? Like whenever this happens where we have this conversation again, a month later, it’s because there was an influx of requests and there was something that wasn’t aligned in terms of what you needed. You underscoped the amount of volume needed. But it sounds like what you’re saying is that these, the consumption date for these had already been consumed at the time that Mira provided the addendum correct? So.
Rebecca Kalmbach (22:53) Like, so our scoping and the conversation through December like also incorporating everything that was in progress at the time and everything that we’re projecting through June of 20 26 that’s all correct. And we’re all still aligned. So, the point of the contract in December was to adjust for that overage and put us on a payment schedule which we’re aligned with like what is here? But I think what is here is maybe not what you all then like record in your system as showing future consumption versus past consumption. Like I think maybe the addendum just needed to be like basically a billing table or like taking the overage and putting us on a payment plan for that versus assigning what appear to be net new licenses for year two and year three… perhaps.
Genevieve Seney (23:52) Yeah. I think we can go back and take a look at sort of date of consumption and addendum dates. I think where we need to maybe still align is the volume to what has been paid so far. And so I think we can certainly look at the sort of billing schedules. But I think where we are still kind of stands in terms of the… volume. And so, I think, Peter, we need to go back and just kind of take a look at consumption details. But again, I think the trends of which your team is consuming, we still need to sort of address because we are now in the negative for year two.
Rebecca Kalmbach (24:35) But we have been in the negative, right?
Genevieve Seney (24:41) Yeah. And it sounds like again, we got out of the negative from the December to March with that addendum. But now we are sort of back here because it didn’t cover again the needs for your volumes.
Rebecca Kalmbach (24:55) From… our perspective, no… maybe contractually or how it’s tracking in the system. I don’t know like I don’t have clarity on that, but again, like when we had that conversation with Mira, we were, Jill, I think at, I want to say not 94.
Jill Hamburg (25:17) Something like that. We.
Rebecca Kalmbach (25:18) Already knew that we were at that 94 total overconsumed. And then we said hey from everything that we’ve consumed and what’s currently in queue. This is where we are with new licenses. And then we’re going to need 12 more by June. What’s the schedule of terms and what’s the addendum that we need to sign to account for that overage… and to amortize it appropriately over the term of the contract, the msa through year two. So if I’m inferring the 53 split you all are saying is inappropriate. And so then the 53 and 53 doesn’t really account for the overage. And now it’s triggering like a we’ve gone over 120 percent from… I’m not sure from the court if it’s on a quarterly basis, that would have been from.
Jill Hamburg (26:16) But those are already in progress. Those are.
Genevieve Seney (26:18) Already?
Rebecca Kalmbach (26:18) In progress? Yeah, yeah.
Genevieve Seney (26:20) It’s just, it’s 120 over the annual contract value. So, the actual billing schedule is the 620 21, 20 25 to six, 20 20 26. So within that annual contract period, if you go over the 120 percent of the contract value that’s when these discussions happen. So just like outside of the actual billing schedule, you’ve consumed 100,000 dollars worth of services to date over the 67,000 that you had allotted for year two.
Rebecca Kalmbach (26:55) But that wouldn’t have changed between December and now. OK, we’d already exceeded that in December. Yeah.
Genevieve Seney (27:06) I think what would be helpful is if we sort of provide that breakdown of the spend from December to now and kind of give you guys, that breakdown because I think that’s obviously what we’re missing here is, where were you? Almost? Like in the negative if we talk about in the negative from December through now and how has that fluctuated is sounding like where the confusion is happening?
Rebecca Kalmbach (27:33) I think we do have that… because you all shared… the… total consumption like we have the export of total consumption… which we… could hear. I can just pull this up actually.
Rebecca Kalmbach (28:08) So this is the export for services. We were signing this agreement. This is end of 20 25. So 1,215… was the last, this is, yeah, this is consumption basis. This is what was consumed before we signed the contract. And then we had visibility into… Jill. I think all of these were in progress, right?
Jill Hamburg (28:37) These were in progress. So it’s like the consumption happens when they’re completed, which is what we learned from our last meeting a week ago, but those were we already had accounted for because we were thinking it was when we requested them, but they are considered consumed so.
Rebecca Kalmbach (28:53) But even still, this total is 4,000 dollars… but, that also was incorporated into the contract. Yeah. Okay. Sorry.
Genevieve Seney (29:06) Team, I do have a hard stop but what we’ll do is basically export the so so we can kind of look at spend month over month and we can look at what was paid from December to now and see sort of where the, because again I think it’s just to your point. It sounds like we just never got out of the negative is what I’m assuming. And now it’s confusing because we’re having this discussion again. And so, I think like there’s a few different things happening. I know we’re both sort of frustrated with how we can align on this, but I think I have sort of a sense of where we need to go directionally with this. Peter and I will connect and get back to you, with further data, but maybe we look for additional time later this week.
Rebecca Kalmbach (29:51) Yeah. I think happy to hop back on a call. I think if you guys could document it first like the proposed change and then to use the table and the addendum that we’ve already signed in reference, like to show us what the chain or what the proposed change in contracting is from the last addendum. And then also the change in what Mira proposed. That would be really helpful because right now we’re reading the document as it’s just a change in payment terms. Like we haven’t gotten out of the negative because the payment terms were set to be amortized over a two year period. Yep. So that would be super helpful before we spend more time on it. And if we do, I mean just to give you guys an idea like if we do have to change this… I’m going to have to flow a ton of stuff through accounting. We’re going to have to go through and restate and re, amortize a bunch of reports like this is like a, it’s a real effort for us to change a schedule because it’s like 100,000, 150,000 dollars, call it worth of spend on our end.
Rebecca Kalmbach (30:57) And then that’s going to impact like our quarterly reporting. I’m going to have to go back through and restate a bunch of months to like fix this. So that’s also why it’s just, it’s painful for us to go back and renegotiate payment terms or something like this because of the complexity in the billing schedule. So anything that can help us get to clarity on like what is being proposed and what exactly is changing that has like amortization and accounting impact for us past and future. So that like if we can tie it back to what we signed in December, that would be super helpful.
Genevieve Seney (31:33) Yeah. Well, we’ll get you guys sort of like the clear breakdown and tied out toward the billing schedule. And then again, the idea is not to sort of introduce a new billing schedule more than it is to just sort of address the trending of your consumption. So we’ll get you guys additional data.
Genevieve Seney (31:49) We don’t need to align. We don’t need to jump on a call just to go back and forth again. So we’ll get you some stuff up front and then we can go from there.
Rebecca Kalmbach (31:58) Okay. Awesome. Appreciate it. And then the last thing I’ll say is just if there… is a way, well, actually no, you’ll probably address it. You’ll probably address it in what you send over. So great.
Genevieve Seney (32:12) Okay. All right. Thank you guys. Appreciate it.
Rebecca Kalmbach (32:14) Thanks Peter. Thank you. Bye.