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Victhom Human Bionics Inc V.VHB



TSXV:VHB - Post by User

Post by gldblvon Apr 24, 2009 11:29pm
305 Views
Post# 15944032

Speculation of potential solutions

Speculation of potential solutions
Here is just a speculation in order to try to find a reasonable target SP.

In 2-3 years VHB will have 2 products fully launched and will be profitable able to sustain R&D at full steam.  It will also be close to launch other products targeting even bigger markets such sleep apnea.  It will also have consolidated its experience and its worldwide leadership in both biomechatronics and Neurostimulation markets.
 
At that point VHB should be worth around $100M.  This is the same target as all reports till today based on size of the market and the profits they will make.  All those reports are valid but they were way too aggressive with launch dates.  However they need $20M to continue R&D for the next 2-3 years.  Consider that their cash burn rate will slowly decrease because they will start selling more and more products and get royaltees.  So $20M has some good security builtin.

If they find an investor that buys 100M new shares at $0.20 they get the cash they need and the total shares becomes 200M.

That means that SP in 2-3 years will be worth $0.50  ($100M/200Mshares).  The new investor would make 150% gain in a 2-3 year period of time so that makes ample sense for him.  At this point, the road map is quite clear and close to production launch and the above market cap is very reasonable.

On the other hand, if someone gives them $0.20/share for a complete buyout.  It will probably be voted through.  So this will cost him $20M to buy VHB and $20M of cash to continue R&D for a total of $40M invested for something that in 2-3 years will be worth $100M or 150% gains in 2-3 years.

This gives us a good idea where the SP could jump if they find a reasonable solution.  In my mind any deal, buyout or financing, below $0.14 would be consider bad.  Any deal above $0.24 will be consider very nice.  In between will be normal.

That is also where the trend seems to be bringing us.  It stabilized at $0.07 this week with another 100% gain next week.

There are risks that they will be squezed out and bought for cheap by big players.  However Ossur is already quite involved and if Victhom plays their game correctly, I don't think that Ossur will take risks of seeing them in competitors hands.  At the very least Ossur will probably going to make sure that the bionic divisions becomes part of Ossur or stays in the hands of a solidly funded independent Victhom (partner).  Actually if Victhom is in bad shape today it is also becasue Ossur miscalculated the market with the first generation instead of asking right away for the needed corrections.  But they were the first players in that market and it is normal to have an adapting period.

GLTA
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