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Tuesday, February 14, 2017 9:14:25 AM
1. Let's begin with the assumption that the transaction will be "as advertised" earlier in the December 30 8K, and that's an acquisition of assets.
2. So what's the nature of VHUB's assets? The company has a deficit in its retained earnings account, so "the books" would tell us that in theory VHUB would need to pay PLY rather than the other way around.
3. But that of course is total nonsense, as VHUB's greatest assets are not reflected on the books at all, namely the value of the brand, the value of the patents, and the value of the managerial team brought forward into the new arrangement.
4. There were concerns upthread about whether VHUB or the Winthers own the patent rights. I believe it's VHUB, because if the Winthers owned the patents, then there would have been disclosures in the annual 10K reports about the payment of licensing fees to Kyle/Jake Perlingos, etc.
4. So here's what I think could be announced today or tomorrow. PLY will pay VHUB some percentage of their sales of VHUB products over the next, let's say, three years to reflect the value of the patents and the value of the retention of key VHUB executives. VHUB stock will keep on trading based upon the present discounted value of the expected inflows of these payments, and VHUB will pay dividends to its shareholders consisting of those inflows.
5. If I have to make a guess, and I probably can't avoid it, I'd guess the VHUB shareholders would see $10 million over three years. Overall, based on 90 million shares, that comes out to about 11 cents per share, which might lead to a present discounted value (meaning that's what VHUB stock would sell for after the announcement of the deal) of let's say 6 cents per share.
Nothing but wild guesses piled upon wild guesses here... We'll all know soon enough.
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