Pulp et al...you are spot on. In my opinion, they do not have a sales problem ( see $162M IDIQ) they have a production problem.
Problems:
- attacks by competitors in varying ways, these would include stock shorts, strategic shorts, L-K etc.
- production capacity as it will take a 3rd shift to deliver more than 300 units/month
- no cash, debt growing, at 65-75M
- on-going debt interest conversion into 8 shares scares away new investment
- convergence point with temp. debt holder ( bam) approaching, 23M owed end of march
- temp. debt holder owns the IP if company defaults
Positives/Drivers:
- fully approved, industry leading ETD product that is #1 around the world for both active sectors ( gov & private/cargo)
- superior product pipeline w/ vast lead in non-contact ETD
- top notch sales-marketing dept. ( Dr. Jones was the man at Morpho- you can't buy that experience anywhere today)
- top notch R/D capability ( Dr. McGann pioneered trace detection and is perhaps a top 2-3 authority in the world on ETD.
- ongoing CRADA w/ TSA
- $2M grant to spur R/D for follow on products w/ TSA
- ceo that specializes in finance
if we had 70M shares out today, and we are 65M in debt ( guess), with no cash, our value is our: (current contracts/margin % on current contracts)+ IP value +applicable n.o.l. - debt of 65M / 70M. The backwoods Uncle Si calculations as i fill in the above:
162M/ .45% = about 73M
IP, say : about 50M ( who really knows how to value that)
NOL, say: about 30M to the right buyer who continues building current products
-----------------------------------------------------------------------
About 153M
- 68M
------------------
About 85M
Divided by 70M shares, about $1.21
Buy out premium I use is usually 4-6 times sales, which we cannot use in this case, so a SP premium of 30-80% means a value ranging from $1.50 ish to $2.17/share- ish plus 20% or minus 30%. This is the lunch napkin analysis but I would love to hear Doc Detroit's adroit calculation. I would say today we are undervalued or not. ( its that darn confusing)
Best of The Very Best Luck to ALL IMSC LONGS!
