The investment here should be based on enterprise value - which I hear is what new real money is digesting. Doesn't matter much our calculations, because of the low float, and low volume, the PPS is irrelevant to those types of investors. Just saying, if the 3 - yr. preliminary projections are correct, and the company gets to $100M a year in revenues, valuations are usually based at 4 to 6X revenues, and in healthcare, sometimes a 10X factor. There are companies on the OTC with $10M in revenue, and trading at .03, so ask yourself why? Its because their enterprise value is not worth it, and the market is probably too rich with hundreds of millions of shares. Traders and brokers value companies using a concocted trading formula PPS, v. float v. out standings . v revenues (picking and choosing which factors either help or hurt their investment decisions) just like some board members here, and those companies rarely raise REAL capital from real Investment Bankers.
When biotech/healthcare Technology companies are evaluated, sophisticated investors look at a number of factors that contribute to enterprise value - and guess what - its NOT PPS, trading volume, outstanding shares, float, etc......those numbers ONLY matter if the analysis includes an uplift, so those would be minimums if an uplift is in the funding plan.
There are funds who want to invest, and look for reasons TO invest - and there are funds who jerk companies chains claiming they WANT to invest, but use their meetings to show how their analysis on market factors don't meet up with their investment criteria (as if they are smarter than anyone else in the room)- and thats the difference between NASDAQ and NYSE, compared with OTC. OTC banks want liquidity - this company has none, not right now anyway. Its also the difference between making huge gains over a period of time based on enterprise value, versus gains made on quick (within a year) stock plays. 2 completely different approaches to investing, the latter, the company already said it wants to avoid. The former invest at premiums, the latter at discounts. Which approach do you want for this company?
So you decide whats best for you.
