Kontrol Technologies Corp N.KNR

Valuation scenario.

[canyousayiii]

Trying to figure out the risk/reward today. They are gearing up for production capacity of 20k units per month. Let's assume there is a reason for that!!! Let's work backwards. Assume they sell 3,000 units per month. Assume revenues to KNR of $7,000 after a generous distributor cut and let's assume KNR sells nothing directly (very unlikely but conservative). That is $21 million monthly or $252 million annually. Slap on a 4 times sales multiple and that is about a billion market cap divvied by 40 million shares. $25 SP. Using the above assumption of 3,000 unit sales monthly, not including current core business which may benefit from BioCloud visibility, not counting recurring cartridge revenues. What am I missing? Too high of a sales multiple? Half it. $12 SP. So $4 for every 1,000 units sold. At these ratios, sell 4,000 units, and that is $16 SP. 5,000 = $20 SP. 10,000 = $40 SP. Go back to 4 times sales ratio, double these. What am I missing? A buyout offer once they they start delivering sales and one that will not give us the above premiums if the current SP doesn't move? I don't think I can come up with better numbers on any of my other plays, but before I put much more into this basket, what am I missing?

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[canyousayiii]

3,000 units at $7,000 revenue per unit to KNR (in Cdn dollars) gives them $252,000,000 annual revenue. Give it a 30% gross margin (that will cover general and admin that is not huge) and that works out to about $75,000,000. Slice it in half for profits and we are talking $1 per share. For 3,000 units but profit increases as you scale up. For a fast growing company even a 10 P/E is low. So

[BCdude]

You bring up a great point, and in geneal I would tend to agree with you. Once KNR starts running a profit, I think we'll see analysts rate it using P/E multiples. Probably in the 15x to 20x range. To be conservative, I'd also prefer a 2x to 3x sales multiple, if we'e using that valuation metric. No question the risk-reward is weighing heavily on the reward side.

[Mazz45]

Canyousayii the numbers are staggering.  This whole time we've all been conservatively holding for 5-10K BioCloud units in ALL of 2021 and we all saw a significantly higher share price. now they are getting government funding to scale from 10K units per Month to 20K units per month.  That's insane!  You can do the math and tell your family and friends to do their DD and

[canyousayiii]

Hopefully Paul is working on the uplisting to get it done ASAP. The benefit may be some institutional buying. They will not be nickel and diming, and when they buy they will further tighten our float and they hold.

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[Nearnorth1234]

I think once Paul announces the first major sales contract that will give us a better idea about valuations, I think that could possibly be an Ontario government contract, they desperately need these units in schools, LTC and other places, they wouldn't have given Kontrol $2M to ramp up to 20,000 a month and promoted the hell out of the NR it they were not indending to place a big big order

[Seedickcook]

100% Nearnorth - there is a reason every ontario politician is plugging and retweeting this.  It's coming.

[Nearnorth1234]

I think it's coming soon, my guess would be by the end of Feb at the latest, maybe sooner, they really need these units in schools and LTC as soon as possible

[Bangkokboy]

You guys are definitely right, it's not as if the Gov would not only give money and continuously mention it without it going for something in dire need in the province. And, this is not including any other announcements in the pipeline. I cannot believe I'm saying this but I'll have to again trim my beloved SCR for maybe another purchase of 20,000 shs of this monster in the making

[Bangkokboy]

Just wanted to add this is based off of no current announced valuation since many out there have GME on their mind and are looking for another opportunity to just throw money at something. We're talking about COVID, this generations threat to our way of life and not no 2nd hand games. My thinking to do this is a bit unrational but based on the last 2 days I feel that reading between the lines

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[Stevator]

I totally agree Nearnorth! Being that they actually received the $2M stimulus on January 27, and didn't disclose it until Feb 4 makes me believe that the deal may already be done and Ford is waiting for the right time to make the announcement. Not so sure they're stuffing their pockets but if they try good luck! Mine aren't for sale anytime soon...go KNR!

[yearninyank]

That is an interesting revelation. There was that one afternoon when... nah.....

[BCdude]

I like your numbers because they are pretty conservative. Always nice to be surprised to the upside rather than the downside. The reason I like conservative estimates have to do with the unknown unknowns, many of which reside on the macro side. Having said that, there's no question the risk-reward from this level is heavily on the side of reward. As a longtime investor, I still resist the