RE:Different TakeA very conservative view would be as follows:
Xenemetrix sales = $1.5 mill (last 5 yr ave.)
50% margin = $0.75 mil
SIPCA royalty = $1.5 mil
total gross profit = $2.25
expenses = $2.5 mil ( based on past ave R&D)
loss = $250,000
expenses = $2.0 mil (excludes R&D)
profit = $250,000
R&D is discretionary. May go up with new initiatives but may also may be capitalized instead of expensed. In any case, $16 million in cash will fund R&D for many years until revenue generating products are commercialized. Burn rate is trivial.
xsnrg wrote: I have been doing a lot of DD lately and I think we are going to profit from holding EUO the old fashioned way, namely growing profits and having the shareprice reflect that growth.
It's not the instant 20 cent bump we "should" have gotten with the SICPA deal (and we all wanted) but it will still come and it will come soon.
I peg earnings next year to be 5+ cents per share, I won't share all my DD (that's for you to do) but 5 cents a share is only $4.5M in profits. We know we have $1.5M guaranteed and my estimates are that will be more like $3M with the 5% (I substantially underestimated how much money SICPA could bring in next year and we could literally blow the $1.5M minimum out of the water but that's what my DD turned up). Remember that revenue will be pure gravy as our costs will evaporate in the new operating model.
The wafer inspection and Xenemetrix detector sales (for GFI) should easily get us $1.5M more in earnings and then we have EUO earning 5 cents per share with a huge earnings growth trajectory. Even a conservative P/E ratio of 20 puts the stock at $1 in 2016 and I'm not even including the $16M cash. If they use the cash wisely and bring more earnings faster you get the picture.
Now do we have to wait until the end of 2016 for this? No. For starters, I am expecting good earnings this quarter, we typically oscillate good quarter soso quarter and last quarter was definitely soso, therefore I expect good results. 2 quarters ago we made $546,267, on pace for $2.1M annualized WITHOUT this landmark deal with SICPA. That's what sent us from 5 cents to well past the 10 cent mark.
If we see decent results, plus the SICPA deal getting finalized mid-Dec this thing could take off any day and never look back. Not sure when the inevitable buyout will finally happen but I'd rather get some traction and get the stock north of 50 cents before that happens. Just me being greedy I suppose :)
This really could be the once in a lifetime home run that all venture investors dream of. I've already had one in my lifetime but I feel like I am due for another, and I feel like EUO will be it. GLTA