Nice announcement today. The sale to the military of a NATO member bodes well for the introduction of the new and improved B-150 early next year.
Just a note: I hope no one takes my last post as a “knock” on the company. I believe in Implant’s technology and engineers, and nothing would make me happier than the company meeting some of the share price predictions I have seen on other boards…$8, $10, $14 or $35 just to name a few. But I believe a hard dose of reality is required.
In my example, I assumed $50 million in sales. I concede that if sales were $100 million or $150 million, Implant would have no issue with making its debt service payments. And another sale of the magnitude of the TSA order would prove my thesis incorrect, although there are some inherent limitations on how many machines they can make in the short-term (manufacturing 200 units a month, Implant could make 2,400 B220’s a year, for total sales of $84 to $90 million).
At this point in time, I don’t believe Implant can grow fast enough to keep up with the combined rate of interest on its debt and resulting dilution with respect to debt that is convertible. That’s not a knock on the company, it’s just a thesis which may be correct or incorrect.
If it does come to a buyout, expectations will need to be managed. Perhaps not so much for those lucky and astute investors who purchased below $0.50 a share, but speaking of myself, who bought at $1 or more with dreams of selling at $5 plus, finding out I am not as smart as I thought never gets any more pleasant no matter how many times it happens.
Under some valuation methodologies, you could say the company is fairly valued now. I disagree. I believe that purchasing Implant assures the acquirer the ability to dominate the ETD market for the next 10 years, as well as use ETD sales to garner larger EDS sales. The portal is an unknown, but there is value in that as well. Perhaps overly optimistically, I believe the company is worth $600 million.
From that price, an acquirer would subtract from that amount $20 million for the BAM note, and $14.5 million for the Change of Control Plan, leaving $565.5 million
They would then add back into the purchase price the amount of money received through warrant exercises (I have assumed $2 million, which would equal about $0.50 per exercised share) and option exercises (I have assume $18 million, which would equal about $1.00 per exercised share).
So the “pool” to be distributed among stockholders would be $585.5 million
I’m assuming DMRJ would convert another 5 million shares before the deal, so my fully diluted shares outstanding number = 75 million outstanding, 65 million from the 8 Cent conversion note, 25 million from the other two $12 million convertible notes, 4 million warrant shares and 18 million option shares.
$585.5 million divided by 187 million shares=$3.13 per share.
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