If John was smart, he'd quit the lip service about company being undervalued and would institute a share buyback with no fanfare and try to get shares out of circulation on the cheap if he actually thought the company could generate good cashflow and earnings with current business. If they could somehow get Eyelock in a position to be funded thru a partnership or something that would immediately help their cash flow and bottom line, Eyelock burns somewhere upwards of $15+ mill a year and that's pretty huge for a company with a market cap of roughly 10x that amount.
After the sale, I'm modeling them to have roughly $200+ mill in tangible assets with some ARs and inventory becoming cash (although hard to know how much AR and inventory are wrapped up in the deal so it's a guess).
If you give back the $15-$18 mill burn Eyelock puts on them, you'd be looking at a decently profitable company with cash on hand, no debt, trading under tangible book, valuable properties, with GMs in the mid-high 20s and having some manufacturing capability moving forward for expansion of some of their OEM automotive products.
There's always risk but seems like it's mitigated with the sale in Q2 probably being realized to pad the big hiccup from hhgregg bk and customer changing inventory algorithm in front half this year, and a clean balance sheet with strong Q3 coming after that and at front end of some decent OEM work (often higher margin early on in mutliyear contracts so could carry for 12 months or more with Ford and GM work potentially plus other programs post Hirschmann).
Plus we could have meaningful news on Eyelock and Qualcomm working together with the snapdragon 835 processor in the next month or so potentially.
All IMO only.
I don't mind stealing bread from the mouths of decadence... But I can't feed on the powerless when my cup's already overfilled.
-Temple of the Dog
