I am intersted in this company as an investment, however I have a few questions that some of you might be able to answer. Not just the cheerleaders, but the investors.
What kind of revenue does a deal like the one with Raytheon bring? Since this company is licensing the technology and not producing the product, is it significant?
The market cap seems exceedingly high at about $175m (at the time of this message). Even if the deal with Raytheon and some others have value, what is their value? Are there revenue projections for '07?
What is the size of the market that the company is trying to capture?
The company is running at a negative cash flow and should have going concern issues sincer their cash and marketables are less than $3m. Is there funding on the horizon?
I like the product. However, I do have concerns and hope to find some answers prior to making an investment.
What really is funny is watching the shorties start new topic after new topic after new topic ad nauseam, saying things like "short this pig to 0," just so they can bury any substantive posts. Lordy they are afraid for any newbies to actually find some useful information here in public.
That's not all they're afraid of...
If you're a newby, you'll have to find actually useful information in other places. Keep trying though. It is out there. And it ain't pretty for Mr. Shorty.
Oh! What a feeling!
<< What really is funny is watching the shorties start new topic after new topic after new topic ad nauseam, saying things like "short this pig to 0," just so they can bury any substantive posts. >>
Believe me, you don't have to lose any sleep over submitting anything to this board that qualifies as a "substantive post."
You want some numbers? You are right it is hard to put a finger on it. So I try to be super conservative about the future (next ten years?).
It's amazing what 5% penetration of the 3 billion sqft auto industry generates. So lets look at 1%.
1% penetration of 3 billion sq ft = 30,000,000
25 cents per sq ft royalty payable to REFR = $7,500,000
5% penetration yields $37,500,000
That assumes only 25 cents per square foot (very conservative). More likely we are talking $25 - $100 royalty per quare foot, though I shudder to even mention that. But the fact is, a sunroof is only 2-3 square feet, so if the option on a car is $1500, thats $50 per square foot at 10% royalty. Perhaps the royalty is not paid on the consumer price, but on the carmakers price (I am still cloudy on what exactly "final sale price" is defined as). But even then, failure to penetrate even 1/4th of 1% of this market will generate profits against a $4 million burn rate.
This does not include Architectural glass or airplane windows or any other potential applications.
Raytheon's sales alone will not mean as much to the bottom line as it does to the starting line, but my calculations range from 250k to 2m in revs over the next two years.
Maybe someone can verify my numbers or clarify them. I have run them countless times.
Those are the knd of numbers Al M. and N. Dixon were throwing around in 1998.
With all that potential you would think that at least some royalties would have shown up by now on RFI's financial statements. The overwhelming evidence from the last six years since product avaiability was announced is that no one really wants SPD enough to pay for it.
The big number to remember is zero.
<<What kind of revenue does a deal like the one with Raytheon bring? Since this company is licensing the technology and not producing the product, is it significant?>>
Here are the very, very rough numbers I used to estimate the potential market size for this deal:
5,000 Beechcraft King Air Planes x 10 Windows/Plane = 50,000 Windows
50,000 Windows * $1,000/Window = $50 Million
$50 Million * 10% Royalty = $5 Million
$5 Million * % of Windows Converted to SPD = REFR's Royalties
<<The market cap seems exceedingly high at about $175m (at the time of this message). Even if the deal with Raytheon and some others have value, what is their value? Are there revenue projections for '07?>>
In my view, the market has already in factored a fairly significant amount of sales at these levels. For example, the current $12 share price at a 100 P/E (very high even for a high growth company) would equate to approximately $50-$100M of annual SPD end-product sales.
And there are no revenue projections for 2007 at all as far as I know.
<<What is the size of the market that the company is trying to capture?>>
Watchitgo2 provided a long-term market assessment in a thread I started yesterday that provides some of the information you are looking for - although it was from about 5 years ago.
<<The company is running at a negative cash flow and should have going concern issues sincer their cash and marketables are less than $3m. Is there funding on the horizon?>>
No one truly knows for sure, but the pattern of the company has been to be able every 1-2 years to scrounge for enough money from various sources to keep things going so I guess it would be logical to assume that this pattern would continue for the near future if necessary.
Everything you need to know before making an informed investment in REFR can be found here:
My guess is they won't make more than $1000 from this deal, kind of like all the other deals they've announced.
The cheerleaders are concerned, and rightly so, about being identified as individuals involved with securities fraud. Accordingly, they will never provide you with any proformas, earnings estimates, royalty estimates, cash flow projections or anything else meaningful.
Apparently, they read the Wall Street Journal and other similar publications and are aware, as they should be, that internet message board posters who have previously been identified with fraudulent pump and dump activity with other companies have been tracked down, prosecuted and sentenced to do hard time at Club Fed.
That's why all they will say is that REFR is heading higher, since they don't want to get hung in Federal court when their yahoo i.d. is identified and later associated with some overly rosy set of financial projections.
You're right, by the way, about the going concern issue in the opinion letter. Sooner or later this one crashes and burns and goes straight to $0.00 per share.
The licensing revnues vary from licensee to licensee, and the company ony earns royalties on end products, not on emulsion or film.
InspecTech, who are the licensee working with Raytheon, have a 15% royalty agreement. Other royalties are not, as far as I know, publicly available, but 7%-10% is not unusual as a licensing fee.
Perhaps another investor has more specific figures.
Inspectech hasn't been very good at projections. You can read their unmet rosy projections here:
Inspectech claims 5000 windows a month in 2001. Total real numbers sold in the intervening 6 years: 0
I have some links in this earlier post that you can click to research the industry:
They lead to sources with more information. The cheerleaders will never provide you with any concrete info.