DNAprint Genomics (DNAG)

[worktoplay]

Terry...A review of the most recent quarterly revenues shows approximately 50% gross profit on sales. The great bulk of those revenues were derived from a very similar test selling for $158.00. In addition to the test, DNAPrint provides a nice document package, a CD, a book, etc. with the results. It looks to me as if the cost of the testing itself is something less than $70.00 per sample.

DNAPrint sells contract genotyping services for $0.47/genotype. Now, the DNAWitness test is certainly more involved than contract genotyping, but ultimately it involves genotyping only 71 markers. At $0.47/genotype that would amount to around $35.00 per sample. The company has been offering to type a number of free samples with the early orders to demonstrate efficacy of the test, and as I said earlier, there is certainly more involved sample preparation, quality assurance, etc. with DNAWitness. But suffice it to say, I believe margin will be far beyond 20%.

Ultimately, I believe that COSTS will range from 20-40% of revenue (due to efficiencies of scale), leaving more like 60-80% profit per test.

In addition, I would point out that your figures for case load are U.S. cases alone. DNAPrint's forensics and genealogy will have worldwide markets.

Lastly, this year's accounting losses are inflated due to the Executive Management stock awards. If you focus the analysis on cash flow, you'll discover that cash burn was approximately $76,000/month beyond current revenue. At $1000/test, and 50% gross profit, 160 samples per month bring you to current break even.

Of course cash requirements will rise as the company grows and as executive salaries replace stock based pay. But in any event, it is not far fetched to imagine that forensics and genealogy revenue could, alone, provide the necessary revenue to sustain the company. IMO

Later,
W2P