SPO Networks Inc (SPOI)

[Asklepidaurus]

Updated SEVI valuation with current share numbers:

Assume revenue of $7-5 million, 66% margins as in previous years, and 750 million shares.

HIGH end ~ $0.0310
Gross Profit = ($7 million revenue) x 0.66 = $4.62 million
$4.62 million / 750 million shares = $0.0062/share
If PPS reaches 5X gross profit/share => $0.0310/share

LOW end ~ $0.0220
Gross Profit = ($5 million revenue) x 0.66 = $3.30 million
$3.30 million / 750 million shares = $0.0044/share
If PPS = 5X gross profit/share => $0.0220/share

(Note: the average U.S. equity Price/Earnings ratio from 1900 to 2005 is 14, so using 5 may be a low estimate.)

Hence, a target of $0.0220-$0.0310 (the high end of the range is lowered from the previous estimate now that we’ve verified the outstanding share count is over 700). These share prices would raise the market cap of SEVI from its current $1 million to $16-23 million. The company's target as stated by Rhodes last spring was to reach $25 million over the next couple of years, so these share price targets appear to be in line with the company's internal estimates.

-Asklepidaurus