Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from the line of Bob Evans of Craig-Hallum. You may proceed.
Bob Evans - Craig-Hallum Capital
Joe, sorry to see you leave. You’ve made great progress while there but Mike, congratulations on the new role. First can you clarify -- in your press release you talked about the Italy and the value-added tax is now excluded if you will in the new -- under the new contract but you had said it will be 20% of operating expenses. Can you give us kind of a clarification on what that means and will that be more profitable now than in the past?
Michael R. Chambrello
Let me take that one -- one, let’s just be clear that nothing has been finalized yet because the award hasn’t been made. However, there’s clearly an interpretation of VAT under the new tender which could result in increased profitability to the consortium in essence, given a reading of the VAT application under the new tender, it’s conceivable and quite possible that the actual rate itself might be slightly higher net fee slightly higher under the new tender than the old tender but I caution that at this point, nothing has been finalized and everything is subject to change. But that I think is the VAT issue that’s been floating around for the last week or 10 days or so and it could be reason for good optimism on all of our parts but premature to take it in hand and run with it.
Bob Evans - Craig-Hallum Capital
And Mike, when will you get greater clarity as if that’s the case?
Michael R. Chambrello
If that’s the case, I think when the process is completed and the actual contracts have been executed.
Bob Evans - Craig-Hallum Capital
Okay, and that should -- I believe a payment is due in November, so I would assume that’s in the relatively near future?
Michael R. Chambrello
Yeah, the payment right now the process calls for award of the contract on November 15th. It’s possible, I guess, that it could be sooner than that, and then the initial payment would need to be made no later than the 30th or 15 days post award.
Bob Evans - Craig-Hallum Capital
Okay and will you use existing -- well, assuming everything proceeds, existing cash on the balance sheet or how will you go at that balance sheet versus your revolver?
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