Cash,Content & Contracted Backlog w Multi Bagger Potenial...Heck, I wont pretend to have in depth knowledge of the entertainment production space… but its pretty blatant that the value of content is ever increasing to content distributors and these guys are sitting in the sweet spot with a record project slate. (8 part global series on AI that is being produced alongside Robert Downey Jr and Sonar Entertainment could be worth more then the entire current market cap of the company alone.)
Where’s the value
The balance sheet is a thing of beauty 4M in cash no debt and Created Content with a value of 12.3M at cost. The value of just the pre-existed content spend and cash is worth 0.225/share or 100% above the closing price Friday. HOW!!!
I never understood how much that these entertainment production companies get tax credits to produce this content it really is something. Looking at the balance sheet NTE.V has 2.65M in tax credits receivables relative to 2.4M Interim production financing costs with each loan being secured by tax credits receivables. With additional production costs being financed through advances received from the individual production partners.
Given the fact that their I Am series is just beginning, with the fact they have already received a total of 8 Leo Award Nominations for these projects. With 4 more projects in the pipe could make for quite the release slate for the next 12-24 months.
Backlog Backlog Backlog. 17.9M in Future Production Revenue which is up 13% QoQ and 842% YoY!!! This is not revenue that may come in, this is revenue that has already been contracted. The momentum and growth they are seeing is quite impressive.
Valuation
This is a very small market cap company but the value of the content is being discounted way too much. If you look at the broader industry of Entertainment Production companies that are publicly traded you get a valuation multiple on Sales of anywhere from 1.0-1.5x Sales.
You put that multiple on NTE.V 12 month forward contracted Production Revenue and you get a share price range of 0.25-0.37/share or 0.31/share at the midpoint which would equate to 180% upside!!!
Granted that might be a little extreme but if they can demonstrate and develop a repeatable model that is monetizable like their I Am series or their new AI series the multiple with expand for the company as the visibility of future revenue improves.
After the mess of the December Financing done at 0.15/share has distorted the stock lower as fundamentals have improved creates the opportunity. Anything under 0.15/share has to be steal and anything above that will start making them look real silly for blowing the stock out in the first half of the summer.
This was a 0.25/share stock January 1, 2018 and the business has since taken off, not hard to make a case for a 0.20/share stock in short order especially for a micro cap with low liquidity….
LOOKING TO ADD