Replies to post #36305 on Vystar Corp (VYST)

[StocksGoneWild]

Bro, I wish we had like 10 sticky's. I'd slam this one up there so fast. Very well done.



lordichabod

[Shaunpro]

“Based on logical deduction after VYST acquires Rotmans, it should fundamentally trade somewhere in the area of .82 to $1.56 per share.”

Not sure why others can’t see how easy this is to understand

[tastock]

Excellent

[Frankp]

Thanks Sterling

[EZMoneyOne]

Outstanding!!!

[armour1955]

You cannot add net income and the NOL and get adjusted net income. Otherwise I like the effort. NOLs shelter income from taxation and the real benefit is saving the company the cash that would be paid in taxes. That cash can then be used to reduce debt or buy back shares.

[cjstocksup]

Excellent post as usual.

lordichabod**Valuation with only a $4.65 TAX NOL...

As for why the Authorized Shares (AS) was raised, read below as it is a non-issue:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=146912174

Thanks for this explanation. I will explain why I still believe we are fine regardless here with VYST. Within this Investopedia video, they applied that Tax NOL as you have explained it so let's go with what you had explained as a worst-case scenario to create a new VYST valuation:
https://www.investopedia.com/terms/n/netoperatingloss.asp

Let's presume a VYST valuation with only using the $4.65 Tax NOL that you have stated. That would equate to having that deduction for roughly 6.73 years going forward. I'm not an Accountant (CPA), so I'm not sure, but I think that Tax Reform had eliminated the numerous tax brackets for corporations and instead imposed a flat tax rate of 21% tax on C-corp income.

No big deal. Let's go with the 15% that you used for this example. That still could be a blessing in disguise too because the 15% corporate tax rate would equate to VYST having to pay $5,250,000 in taxes. Regardless to what's used, the taxed amount is higher than the $4,650,000 Tax NOL Per Year.

If $4,650,000 can be applied from the Tax NOL, that would reduce, or should I say, put back Income into its valuation that would been applied towards paying taxes instead. So that would make the valuation with using the Substitution Property to look like this...

I like my sources for the trailing PE Ratio for the Furniture Industry being 36.53 better that I had previously posted which is more in line with what the Romans believe too so this is what I will use below.
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/pedata.html


Gross Profit Margin Model
$35,000,000 Revenues x .48 Gross Profit Margin = $16,800,000 Gross Income

$16,800,000 Gross Income + $4,650,000 Tax NOL = $21,450,000 Adjusted Gross Income

$21,450,000 Adjusted Gross Income ÷ 500,000,000 (OS) = .0429 EPS

.0429 EPS x 36.53 PE Ratio = $1.56 Per Share Gross Valuation


Net Profit Margin Model
$35,000,000 Revenues x .19 Net Profit Margin = $6,650,000 Net Income

$6,650,000 Net Income + $4,650,000 Tax NOL = $11,300,000 Adjusted Net Income

$11,300,000 Adjusted Net Income ÷ 500,000,000 (OS) = .0226 EPS

.0226 EPS x 36.53 PE Ratio = $.82 Per Share Net Valuation

Still, getting to the NASDAQ is very doable. So based on logical deduction after VYST acquires Rotmans, it should fundamentally trade somewhere in the area of .82 to $1.56 per share. The company believes that after the acquisition that it would trade high enough to meet the $4.00 minimum bid for 30 consecutive days. After comparing VYST to Wayfair and Bassett Furniture within the link below, I share their same sentiments:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=146944033

Question: Do you think a 1-5 reverse split would really be a big deal if they needed to do one to get the stock to meeting the $4.00 minimum bid for 30 consecutive days to meet NASDAQ requirements?

VYST stated within their 10-Q that at the discretion of their Board of Directors that a minimum of a 1-5 reverse would be done if necessary, but they told myself and other shareholders that it will be no higher than a 1-10. However, they believe they can get VYST to $4.00 without a reverse split. Either way is awesome in my opinion as I had posted some examples justifying my belief. Personally, I'm hanging around to see just how far they will get this.

v/r
Sterling

[lordichabod]

Re: the AS issue....if you believe that VYST had to create a billion shares for their treasury to hold for some past convertible notes, then I guess there's no reason to be worried.

I personally find that explanation to be lacking of credibility. If these notes are old and never hit the market, and were paid off beforehand, as we've been led to believe (supposedly all convertible debt was paid off, except for a single note for 100k-ish or something due sometime this month), then I find the notion that they had to create another half billion shares in January (in addition to the half billion shares they created in Nov) to act as collateral for notes that no longer exist to be highly dubious. To each their own...

Re the 36 PE ratio, you're obviously free to use whatever metric you please, but I find that multiple to be extremely misleading and inaccurate. I looked at as many furniture stocks as I could find just now, and I can't find a single stock that trades anywhere near the 36 multiple you prefer using. Here's a brief list of what I found:

Company.....................PE Ratio

LayZboy.......................17.54
Ethan Allen...................15.18
Bassett.......................24.59
Leggett & Platt...............15.86
American Woodmark Co..........22.21
Hooker Furniture..............11.27
Sleep Number Corp.............16.73
Tempur Sealy..................22.75
CompX Int'l...................11.09
Herman Miller.................16.18
HNI Corp......................19.48
Knol Inc......................14.40

I get that Greg Rotman thinks using a 36 PE for valuations is the better choice, but there's a clear conflict of interest there. Also, there's not a single furniture sector stock trading anywhere near a 36 PE, at least that I could find.

[cjstocksup]

Excellent post as usual.

lordichabod**Valuation with only a $4.65 TAX NOL...

As for why the Authorized Shares (AS) was raised, read below as it is a non-issue:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=146912174

Thanks for this explanation. I will explain why I still believe we are fine regardless here with VYST. Within this Investopedia video, they applied that Tax NOL as you have explained it so let's go with what you had explained as a worst-case scenario to create a new VYST valuation:
https://www.investopedia.com/terms/n/netoperatingloss.asp

Let's presume a VYST valuation with only using the $4.65 Tax NOL that you have stated. That would equate to having that deduction for roughly 6.73 years going forward. I'm not an Accountant (CPA), so I'm not sure, but I think that Tax Reform had eliminated the numerous tax brackets for corporations and instead imposed a flat tax rate of 21% tax on C-corp income.

No big deal. Let's go with the 15% that you used for this example. That still could be a blessing in disguise too because the 15% corporate tax rate would equate to VYST having to pay $5,250,000 in taxes. Regardless to what's used, the taxed amount is higher than the $4,650,000 Tax NOL Per Year.

If $4,650,000 can be applied from the Tax NOL, that would reduce, or should I say, put back Income into its valuation that would been applied towards paying taxes instead. So that would make the valuation with using the Substitution Property to look like this...

I like my sources for the trailing PE Ratio for the Furniture Industry being 36.53 better that I had previously posted which is more in line with what the Romans believe too so this is what I will use below.
pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/pedata.html


Gross Profit Margin Model
$35,000,000 Revenues x .48 Gross Profit Margin = $16,800,000 Gross Income

$16,800,000 Gross Income + $4,650,000 Tax NOL = $21,450,000 Adjusted Gross Income

$21,450,000 Adjusted Gross Income ÷ 500,000,000 (OS) = .0429 EPS

.0429 EPS x 36.53 PE Ratio = $1.56 Per Share Gross Valuation


Net Profit Margin Model
$35,000,000 Revenues x .19 Net Profit Margin = $6,650,000 Net Income

$6,650,000 Net Income + $4,650,000 Tax NOL = $11,300,000 Adjusted Net Income

$11,300,000 Adjusted Net Income ÷ 500,000,000 (OS) = .0226 EPS

.0226 EPS x 36.53 PE Ratio = $.82 Per Share Net Valuation

Still, getting to the NASDAQ is very doable. So based on logical deduction after VYST acquires Rotmans, it should fundamentally trade somewhere in the area of .82 to $1.56 per share. The company believes that after the acquisition that it would trade high enough to meet the $4.00 minimum bid for 30 consecutive days. After comparing VYST to Wayfair and Bassett Furniture within the link below, I share their same sentiments:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=146944033

Question: Do you think a 1-5 reverse split would really be a big deal if they needed to do one to get the stock to meeting the $4.00 minimum bid for 30 consecutive days to meet NASDAQ requirements?

VYST stated within their 10-Q that at the discretion of their Board of Directors that a minimum of a 1-5 reverse would be done if necessary, but they told myself and other shareholders that it will be no higher than a 1-10. However, they believe they can get VYST to $4.00 without a reverse split. Either way is awesome in my opinion as I had posted some examples justifying my belief. Personally, I'm hanging around to see just how far they will get this.

v/r
Sterling