LIKELY SCENARIOIf funding is secured:
$11-12 million in revenue for 2019
(6-7 million from VR/AR/ $5 million from Asian DC operator if delivered in 2019)
Raouf said their burn rate monthly would be about $550k monthly going forward in the near term!
Still loosing about $5-6 million if these numbers are hit)
I don’t think there will be that much upside to the valuation and needs these additinal catalysts in 2020 to develop:
1. SONY revenue to add at least $4-6 million depending when they launch in 2020
2. The additional 1-2 DC operators to place orders for delivery in 2020
3. Late 2020 announcing one of the domestic DC Giants placing an order with one of them probably through Molex. (Facebook, Mocrisoft, Google )
Revenue should come in at a minimum of $20- $25 million on a conservative estimate which gets the company to break even if these sales do materialize.
I feel lif we take down a domestic DC Giant and everything else in the pipeline comes through, we should see a much stronger valuation and the Company ( in my opinion only) could then become ripe for a buyout.
Why?
A larger company could get rid of all the expensive officer salarys, handle all the accounting and probably integrate the engineering department in house.
So a company doing $25-30 million with and over head of let’s say $500 k monthly would then throw off a very nice annual profit of $5-10 million annually pretty quickly!
What would the right company pay for this type of earnings and a virtual strangle hold on the DC interconnect market for the next few years?
Well, I will let you guys play around with those numbers!
Going to have to wait this out, no other choice at this point.
All of the above is strictly speculation and one persons opinion!
Happy Summer you guys, time to get out the fishing pole and let this deal continue to unfold at its current pace!