[quote]This leads me to think that they already know what contracts they will be awarded. This means that since we are here now in Dec 2013, we have some years ahead of serious growth coming our way here in BONU as this is explained below:
Reading the filings for BONU, the Company indeed has solid ideas that allowed them to do revenue forecasting. According to what has been reported to the SEC,
BONU's products are currently being 'tested' (for trial) by 70 companies, and orders are pending results of these tests. If successful, BONU has the potential to increase customers by over 300% during the 1st quarter of 2014. This valuation, although impressive, should be understood as a 5 year projection so a better way of looking at it is to divide the sum by 5
AND also consider the fact that the valuation was derived using an
undiscounted cash model which always yields a greater number as the model does not account for the discounted cost of cash over a period of 5 years. We generally want to see valuations using a fully discounted cash model so we know all rates of risks the company is expecting. This is not important at this point, because once BONU shows revenues in upcoming Qs, we can remodel using actual reported numbers. I will revisit this at a later time but for the time being, we know the source of future revenues (the 70 potential, new customers) and this aspect is really key.
Judging by the equity line of credit pending approval for $10 million though, the IPs appear to have sufficient value to be used as collateral, and the folks lending the money seem to agree with BONU's valuation of $41MM even though it was an undiscounted cash model. We/they can plug a few numbers (for assumption purposes) and still arrive at the same conclusion that BONU's assets (IPs) will generate sufficient cash flow in coming years to warrant approving this equity line of credit for $10 million.
I really like the fact that BONU has real assets and contracts in place.
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