Microcap Company Sees Massive Increase to Revenue Projections Monday, 24 October 2011 http://otcpennystocknews.blogspot.com/2011/10/microcap-company-sees-massive-increase.html Microcap Company Sees Massive Increase to Revenue Projections LAS VEGAS, Oct. 24, 2011 - Flameret, Inc. (OTCBB:FLRE), a developer of fire retardant products to suit a wide range of applications, announced on October 20th that it Significantly Upgraded Its 2012 Revenue Estimates Based on Strong Interest From Licensing Partners and Distributors in North America. The company projects $45 million in revenue for the next year. Gross margins will be 60%, and administrative costs will be minimal as there are only 5 employees in the company, including the CEO. The company has been able to operate very lean as they have outsourced the manufacturing and distribution of their various fire retardant brands to Seatex Ltd., a leading manufacturer and provider of chemicals and chemical compounds and Universal, a company that provides quality services to the Marine and Cruise industry, respectively. Outsourcing the making and distribution of the products to these two mature companies with great economies of scale enables them to bypass the high fixed cost barriers to entry which has prevented other small players from entering into the fire-retardant industry. The 5-person management team is able to focus its energy on signing more revenue-generating contracts for their patent-protected products. Valuation of the Company A 60% gross margin on $45 million of sales leads to a $27 million in gross profit for 2012. Even if management was generously compensated $500,000 per year per person, that would lead to just a $2.5 million expense. Assuming other miscellaneous expenses of $2 million and an effective tax rates on profits of 25%, the company can expect to bring in $16.9 million of post-tax net income for 2012. The company has 363.29 million shares outstanding. Their EPS will be 4.65 cents a share. Using a conservative Price to Earnings ratio of 15 for such a tremendous growth company would still imply a 70 cent stock price. Using a P/E of 30, a multiple more in line with a growth company such as Flameret, would see a stock price of $1.40 on FLRE. Why does the stock sell for less than 1 cent? It is not often that you find a stock that can gain nearly 10000% in a year but Flameret has that potential as it closed at 0.74 of a cent today. The volume has gone through the roof as over 97 million shares have traded this month, including over 91 million shares in just the last 6 trading days. But during that time the stock price has sunk from 10 cents at the end of September to where it is now. The main culprit is naked short sellers. For the 14 trading days, FLRE has made the NASDAQ threshold on failed-to-delivers due to unscrupulous short selling on the stock. Ignoring the ETFs, the stocks that have spent more than 20 days on that list are AUNFF, HRBN, PLZLY, TZOO and YRCW. All except PLZLY experienced significant short squeezes and that one has made a steady move up from its September low. Due to the sheer volume on FLRE, expect a short squeeze of massive proportions, likely greater than the one on YRCW when it moved from 3 cents to 8 in three days at the start of the month. FLRE's percentage spike in volume has been much greater than YRCW's of 6 weeks ago and FLRE has a much smaller share float and profitable business projections next year. Some have claimed an issue with stock promotion of FLRE paid by an unnamed party this month. Whoever paid it did not get their money's worth but speculation is that it has been former debtholders who were issued 36 million shares on November 9th, 2010 in exchange for their $540,000 in debt. While promoting the stock they decided to dump their shares, hiding their transaction within the high volume. Unfortunately for them, short sellers picked up on their activities and drove down the price below the 1.5 cent breakeven target. What is a loss for them can quickly turn into a gain for value investors who are willing to buy and wait while the company pulls in revenue figures worth many times the market cap in the next year. http://otcpennystocknews.blogspot.com/2011/10/microcap-company-sees-massive-increase.html
The current Authorized common share count is 500,000,000
Authorized share counts for all designated stock for FLRE:
500,000,000 shares of Common Stock par value $0.00001 1,000,000 shares of Series A Preferred Stock par value $0.00001 20,000,000 shares of Series B Preferred Stock par value $0.00001 10,000,000 shares of Series C Preferred Stock par value $0.00001 20,000,000 shares of Series D Preferred Stock par value $0.00001
*Security Notes Reverse Split FLRE* Capital Change=shs decreased by 1 for 1000 split. Pay date=08/03/2011.
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