troutkinglives......as we see a continuing updrift in revenues (which I believe we will), I think that potential buyout scenario prices will begin to exceed a p/e of 25.
Staying with FASC continuing on its own, sans buyout......here's what it will take to get to the 20 cents/share mark, using the conservative (in growth phase) 25 p/e ratio.
Working backwards......20 cents/share = market cap of $40 million,
at 200 million shares outstanding and authorized.
Market cap of $40 million / 25 p/e ratio = $1.6 million annual profits after tax.
FASC has tax loss carryforwards of about $16 million, so there will be no federal taxes due on the above.
So.....how do they get to the $1.6 million profit mark?
Let's start with estimated annual general and administrative costs of about $500K, using past reported figures (which may actually be high at this point).
FASC would then need gross profits of $2.1 million to get to the above bottom line of $1.6 million.
Assuming only direct KDS sales take place (so no inclusion of royalties, income from joint ventures, or new recurring revenue streams), how would FASC be able to get to the $2.1 million gross profit figure?
Starting with current KDS sales prices ($300-$400K each), let's use $350K as an average sales price.
My guess based on past figures is that cost of manufacturing each would average at about $175K.
That would leave $175K as gross profit on each KDS sale.
$2.1 million / $175K = 12 KDS sales/year....or 1 KDS sale/month, or 3 KDS sales/quarter.
From the information that has been disseminated throughout this board, recent KDS sales patterns look to be in the 2 KDS sales/quarter range.....with further growth appearing to be in place.
So in summary.....I would say that current sales growth patterns argue the case for that 20 cents/share valuation, in the very near term.
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