Asset Value Play? Thoughts ..
(Using OS 54M)
MCAP today is only
- $27.0M @ 50c today
- $37.8M @ 70c
- $48.6M @ 90c
- $54.0M @ $1
- $81.0M @ $1.50 cheap buyout target
Enterprise Value (EV), given $101.27M Total Debt and $74.47M Cash
- $ 53.8M @ 50c
- $ 64.6M @ 70c
- $ 75.4M @ 90c
- $ 80.8M @ $1
- $105.8M @ $1.50 cheap buyout target
Accumulated Losses for NOLs over $200M
EGL-002 Development Costs around $80M
NASDAQ Global Market Equity Standard would require $10M equity, company has a $33M equity deficit today and hence would require $43M to become equity compliant.
Following two scenarios take into account that company has explicitly stated to consider sales of assets and company on last 10-K and 10-Q. This has been known for a few quarters. Sadly it didn't happen as of today, but maybe the stock price was just not low enough yet to allow a sales for a low stock price multiple of 3? At 50 cents a $1.50 buyout or $60M EGL-002 asset sale seems to be feasible and shareholder would not revolt anymore.
Cheap Buyout Speculation
One speculation here would be that one entity picks up whole company for cheap, enjoying the NOLs and assets. As visible above NOLs outweighs debt almost by 100% and EV is indeed very cheap now.
At $1.50 per share or $105.8M EV buyout price a suitor would enjoy the company for free, assuming she can utilize roughly 50% of the NOLs.
Cheap Asset Sales
Company now willing to sell EGL-002 for around $60M at depressed stock price, would immediately cure the listing compliance and renders company virtually or almost debt free.
$60M for EGL-002 would be a 25% discount to assumed development costs and surely a deep cut at perceived value.
+++
Whatever it is .. maybe this was the plan all along?
A value speculation, while company was unable to properly monetize its assets until today.
