The theoretical suppositions inorder to achieve .50 by implementing a strategy of a share buy back, revenue projections and generic fundamentals are extremely unrealistic.
The proforma was poorly executed as evidently seen when the slide of the quarterly projections were by bypassed without any explanation. Well there was a glaring reason for that. That particular slide which was shown briefly goes directly against his unsound strategy of the buy back.
Let me explain. So suppose the Ceo makes good on his word of $8 million in gross revenues starting by the end of this year. By the end of next year, he would gross $96 million. But what I find highly suspect is the net profit margins he said which would be 50 percent or more. It's quite plausible to see gross margins of 50%, but let's stick with what he thinks the net profit margins will be.
So in theory, this would give the Ceo $48 million in cash, to buy back shares. Now inorder to buy back 2 billion shares, the share price would have to be at .024. However having a quarterly projected s.p of .05, .10, .20 etc., would go directly against his argument, minimizing the amount of shares he could purchase.
So that formula he presented is inherently flawed and needless to say, it wasn't well planned out.
So he essentially skipped that slide of his presentation, which was the most important factor of his formula, and quickly jumped to the e.p.s of .029, without ever explaining how that was going to be achieved.
The only thing thing that sounded and looked practical was the data he showed for the key metrics of the price to earnings ratio in the industry. Which was a p/e of 17x.
There's quite a few details I find rather hard to believe, but from what I gathered, even though the Ceo knows how the fundamentals work, it doesn't seem realistic at all.
I'm a little surprised about this poorly executed presentation with having unreasonable expectations, but then again, this is the otc. Proceed with caution imso.
Good luck folks.
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