I am not an expert but some of your calculations are based on numbers that have not much to do with what the reality could be post merger (if it ever haooens).
"Pure Romance had 2006 Revenues of $60 million" . Fine.
"Supposedly 20% profit margin". If so then gross margin would be $12,000,000. O.K.!
"Most people are calculating EPS of $0.06". Assuming it is calculated based on the number of UCVL O/S (200,000,000) this says that EARNING PER SHARE (EPS) = GROSS MARGIN = NET EARNINGS. That doesn't make sense to me.
A question not herein alluded to is how many shares overall will be outstanding within the post merger company and what % of these will be owned by current UVCL shareholders?
My view is that with luck, considering what each parties bring to the table, we (UVCL shareholders) would be darn lucky to have a 10% ownership of the post merger company.
If so, assuming EPS to be let's say 75% of gross margin (optimistic), it would read (.75 X 20,000,000) $15,000,000.
Assuming we will own 10% of the post merger company, $1,500,000 earning could be considered the Earnings behind our current 200,000,000 shares for an effective EPS of (1,500,000 / 200,000,000) $0.0075/share.
Assuming a multiplier of 8 PPS would then be FUNDAMENTALLY JUSTIFIED at $0.06.
Better than current PPS but far from the expected $0.32.
A lot of hypothesis in her and the critical one remains the reverse merger. I doubt it will materialize (hoping it will) and I keep my expectations as realistic as I can.
This being said, Speclators, traders and MM's can enginneer a much higher PPS based on the news. I hope they will but I shall escape quite fast before logic prevails again.
We shall see.
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