Does anyone else follow or have an opinion on this company?
The PREVI isola is gonna cost more than a nichrome wire, so to have a cost saving the applicators have to cost less than what it would cost to hire a person to swab the plates.
Depending on the seniority of the person it should cost about 25-40 an hour to get someone to swab the plates and they can swab about 20+ an hour so they couldn't sell them for >$1 an applicator.
I swabbed a few plates in uni and its mind numbing stuff and labs have bench space issues so their saying this can potentially replace 5-6 ppl with less bench space used.
Even getting 3cents an applicator though from a machine working at a quater capacity, 9-5, Monday-Friday is pretty good.
0.03*45*8*5*52=$2808 per machine per year
Lets say they end up selling a total of 500 machines. Their incentive royalty payment is for 1000 units.
NPAT= 1.4*.7= 0.98m
So their current market cap is 17m - 3m for cash and -2m euros for their next royalty payment so EV is 11m.
So would make the price fairish at current values.
So I'm hoping they sell more units and get more for their applicators as a royalty payment and that the labs utilise the machines more any of which would greatly increase the amount of royalty payments they would recieve.
The upside would be diluted by the 45m potential shares from OTM options most of which are priced at 20c compared to the 100m shares on issue but they wouldn't be exercised unless they were seriously in the money as they are all long dated at which point we would've made a lot of money anyway.
I thought they would have stated what their minimum royalty payments would be to give me some sort of indication of how their worst case scenario compared with mine but I guess a meaninigful isn't going to be until next year.
Bloody frustrating though, one of my bigger positions and I see a lot of potential upside but management seems to be doing all they can to make vauge statements about their future.
About all i've read is that the they will have potentially lucrative royalty payments in the future. I agree but I'm having to glean figures from their brochures.