An Easy Low Risk Double or MoreLets 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