Yeah I have to disagree that Jody just didn't know what he had until the company won the TIPS Award. An award which, by the way, I think we're all making waaaaayy too big of a deal over.
Yes, winning industry awards are nice. They elevate your profile and expose you to potentially new eyes and helps validate your product, sure. 100% not knocking it... but let's throttle back. TIPS is a nice non-profit organization. It's not exactly the World Health Organization or The Nobel Prize. Settle down folks. It helps, sure. It's not a make or break development.
Jody knows what he has because he's spent a career in this industry and grew a company to $45 mil in revenue over the course of 20+ years. He knows what he has because he's worked for PCTL for nearly 4 years.
So no, he didn't just wake up one morning and have an epiphany because a non-profit organization gave his product an award that by the way 15 other companies also received. C'mon people. Temper your expectations about this.
Whether the deal is good or not, no one knows. But I agree the LOI would never have been signed in the first place if they had no interest in the deal as presented.
Keep in mind that the LOI is not a contract. It's not a done deal. It's not a merger in waiting. It's basically a promise to talk and work it out. So the exact terms may wind up being a little bit different than what's in the LOI and those could be good for PCTL, bad for PCTL, mutually beneficial, or any point in between.
Jody and PCTL may well be negotiating and trying to get a deal that works better for them but I would highly doubt it's because they think they have a $200m company in waiting and want a deal that values them as such.
On potential, this might be a $200m company. On the books, it's nowhere near that.
Someone mentions Shark Tank so I will too. You know why a lot of deals DON'T get done on Shark Tank? Because the owner of the product is too emotionally invested in their company and values it higher than it actually is.
"Hi, I sell this neat clock out of my basement and have done $10,000 in sales this year. I'm seeking $500,000 for 5% equity in my company."
Mark Cuban's laughing before the guy finishes the sentence. Sure, that clock could go on to be the next big thing and do $100 mill in sales... but right now you've done $10,000.
I have to assume that Jody's smart enough to not try and pull that. It's a total rookie move to value your company much higher than it actually is. Even if the potential is there and with PCTL we all know about the potential, it costs a lot of money to realize that potential. A LOT of money. Money that right now PCTL doesn't really have or they wouldn't be interested in a deal like this in the first place.
I agree, I want a good deal. But if there is a delay I don't think it's because Jody decided the TIPS Award launches their valuation much higher and I don't think it's because he's all of a sudden realized this is potentially a $200m company and any deal needs to acknowledge that potential.
I agree I want a good deal. A deal that lists them on TSX, flushes them with cash, wipes out their debt, and potentially opens up the Canadian healthcare market is a pretty solid sounding one to me. I have to assume they're working to make it happen. Maybe they are getting hung up over the 51% issue.. but at this point if they want to take a leap forward that might be what it takes.
But again... all this is speculation until we hear anything. Maybe they're renegotiating, maybe they're not. Maybe they're just waiting to ink the deal. Maybe they're prepared to walk away.
I do agree that PCTL has a TON of potential and they also have a lot of great things in the pipeline (AG deal for example) that might enable them to walk away if they just don't think the Ontario deal is good enough. I'm holding either way but hopeful we'll have good news sooner rather than later.
