I appreciate your post and hear what you are saying. While I believe an Elite/Epic merger would muddy the picture, as it leaves issues of relationships that would lead to successful marketing and sales (without which all Elite has is another product), we must realize that, irrespective of litigation, it would not be simple matter of paying us 40 cents and thinking that is fine. Here is why...
Given the economic position of both companies, I do not think (admittedly an opinion without certain facts) either firm could buy the other. So, what would happen would be a consolidation of firms. If done, that means they are a much greater company than Elite was at the time of their previous valuation AND greater than Elite is now, as they have garnered the additional patents, completed trials, rolled out additional generics, improved infrastructure, and have increased revenues. So, even absent an additional valuation we would know without question the value of the company exceeds the current p/s and is well beyond the basement valuation of 40 cents. What might that infer?
In those cases companies typically create new shares. We current shareholders would not get a 1-1 ratio, but some lower ratio. HOWEVER, the p/s would be greater. Allow me to use an example that is just that and does not mean to suggest actual valuations...
If we currently have 950 million shares outstanding and a p/s of 23 cents, a 10-1 RS would mean our shares would be valued at 2.30, but we would hold one share for every ten we previously held (I know you are with me, but there is a need for me to be clear for the entire board). However, if we have a bigger, stronger, better company with an Elite/Epic merger, we may have the same ratio change of 10-1, so the O/S for the new entity would be 95 million shares. BUT, the value of the shares would reflect all the factors mentioned above as well as those within Epic. In this case, an investment bank would guide the effort (assisted by VPs Elite hired), a valuation would be completed by the investment bank, and a new share price would be identified that would enable the consolidated E/E firm to make it to the Nasdaq with room to spare. This would also enable the firm to garner institutional interest because the share price would be in the multi-dollar range. How much? Hard to say. But, if this happened after the filing of an NDA I would argue that we would be looking at 5-8 dollars p/s - RECOGNIZING THAT WE ARE TALKING ABOUT A REDUCED NUMBER OF SHARES PER INVESTOR. Still, that would far and away exceed the current value. Using my 10-1 ratio, if a current shareholder had 10k shares his position would be valued at $2,300. With a 10-1 reverse to a new p/s multiple of, lets say, $6 p/s, the position would be valued at $6,000. And, moving upward with renewed interest.
Something to consider that is not altogether bad. Nonetheless, it is not the best scenario for we shareholders. But, that is a discussion for another time.
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