Post by
TheRock07 on Aug 09, 2016 10:28am
An Easy Low Risk Double or More
Lets look at all of the assets and liabilities.
As of April 1/16, TST had $44.2 million in cash and liquid investments.
Other hard assets amounted to about $5 million.
Total Hard Asset Base = $49.2 million.
Current Liabilities = $3.8 million
Non current liabilities = $1.8 million
Total liabilities = $5.6 million
Net asset value = $43.6 million .
Project to Sept 30/16 @ $800,000 per month ( Apr to July ) @ $500,000 per month for Aug and Sept == $4.2 million cash burn
Net asset value at Sept 30/16 = $39.4 million = $12.7 cents per share.
WHY Sept 30 /16 ?
Management must deliver by then or they will get voted out at AGM in early Nov/16.
OTHER HARD ASSETS
1.....Non refundable Investment tax credits for reduction in tax expenses of $13.1 million
2...Non Capital Tax losses of $56 million to protect against Federal and Ontario taxes
3...Non capital tax losses of $56 million to protect against Federal and Quebec taxes
4.. SRED credits of $70 million to protect against Federal and Ontario taxes
5...SRED credits of $84 million to protect against federal and Quebec taxes
6....rental income of $1.3 million per year
7..Two manufacturing plants that are up for sale at cost with assumed neutral impact on net asset value ( these are currently up for sale ).
8..Senior TSX listing valued at $2.5 million
Note the massive future tax pools and investment tax credits.
These are extrremly valuable to an acquyirerc,as they can be used to offset and protect over $200 million in future operating profits as well as offset certain expenses.
My view is that TST will be part of a RTO by a private sector drug company, of which there are many in Canada who may want to go public.
Other options might include TST and a profitable drug company, both for the cash but mainly for the tax assets and credits.
In either scenario, TST will be given substantial value for its tax assets and investment credits.
I estimate a 10 % discounted value of about $75 million for these assets.
That is, these assets are much more valuable than the cash.
Which is why a triple or more is very probable here.
Worse case scenario is $12.7 cents in hard assets, mostly cash
Comment by
vega509 on Aug 09, 2016 11:49am
unfortunately, the market makers see otherwise, and if this were true, TST would have been sold months ago. so either management has been once again totally incompetent in marketing the company, or they have been twiddling their thumbs while collecting their overly generous paychecks and perks.
Comment by
2j3kl on Aug 09, 2016 1:37pm
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