Vystar Corp (VYST)

[lordichabod]

A few thoughts on your current valuations.....

You can't add the total NOL to revenue to make a valuation.

An NOL can be used to reduce future taxable income. The $31M NOL that VYST is carrying means up to $31M in future revenue will be tax exempt.

With a corporate tax rate of 15%, that means the total value of the NOL is $31M x .15 = $4.65M in taxes that don't have to be paid.

(For simplicity's sake, I'm ignoring any MA state corporate tax savings that may exist, due to MA's extensive stipulations on the use and amounts of NOLs permitted by the state for tax reduction purposes)

That's actually being a bit too generous, as it assumes they'll use the entire value of the NOL and ignores the time value of money, which would lower the value of the NOL depending on how many years it takes VYST to fully utilize the NOL.

So the value of the NOL is probably closer to $4.5M. This point alone will cut your valuations by more than 50%.

And that's ignoring the 500M outstanding shares number you're using. That's a very optimistic guess, and represents the absolute best-case scenario.. The TA is gagged, and there are 1.5 BILLION authorized shares. Assuming the OS is still anywhere in the realm of 250M-500M is pretty naive, imo.

Also, according to Zack's, the previous 5 year average PE for the home furniture industry is 14.71. (see link below)

https://www.zacks.com/commentary/191364/home-furnishing-industry-outlook-margin-pressure-to-continue

If we use that PE ratio, which seems more appropriate, and a 1.5 billion OS (which represents the worst case scenario regarding share structure based on current data) the valuations are reduced from $3.51 & $2.77 per share to $0.21 and $0.10 per share, respectively.

That's also assuming, of course, that everything we've been told about the merger is accurate. So far, there's nothing verifiable about it besides VYST mentioning that the board of directors has granted approval for the acquisition of 58% to 100% of Rotman's in their last SEC filing. (I personally don't consider bluster from the CEO's son to be verifiable proof that the merger is a lock)