As I bought more shares today, I was thinking of i
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Posted On: 10/15/2020 3:09:31 PM
As I bought more shares today, I was thinking of it this way, as I often have before: What minimal amount of success would it take to justify the current price. Obviously this logic has not panned out at previous prices, but we also have never achieved the revenues projected for our opportunities. Eventually that will change, IMO, whether it's Excellagen, NuGenHealth, etc that breaks the cycle. (Side note: Thanks for offering to help w my addiction, Doc!)
As an example, see the message trail linked here for the details that Paul first processed regarding the NuGenHealth opportunity.
Paul figured out that the minimum annual revenue from a patient in the NuGenHealth plan would be $2,079. And he made an assumption that 25% of this revenue came thru to Generex. I agree that seems reasonable. So that is roughly $520/yr/patient to Generex.
The initial 8K was for 5,000 patients entering the system in the next month or so, with an 18-month target of 150k patients.
Let's just assume that they sign 50% of those target patients in one year. That would be roughly equivalent to the population of the AZ clinics, so this would seem entirely feasible with additional opportunities coming from outside that population (the original 5k is outside this population, I believe).
So if they get 75k people up on the system, that would lead to almost $39MM in recurring annual revenues (yes, that's only Generex's 25%!). Wow! And I can only guess what the margin is to Generex, since 75% of the revenue in this example goes to our partners, and they actually maintain the software, etc. Generex's gross margins could be 50-70% (or higher?)!
At a conservative 50%, that would be almost a $20MM annual margin contribution from this project alone, and it would presumably only grow from there as they roll it out and sign more client groups.
FY20 Operating Loss for 9 months was $12.7MM. So if we extrapolate this out, the full 12 months, it might be $17MM.
That tells us that if they meet 50% of their goal of 150MM patients enrolled in NGH's system, the cash from that alone could lead to a net Operating Gain after a year.
Now throw in Excellagen sales getting on their feet. Maybe starting in the spring at $500k/mo and becoming $1MM, or even $2MM/mo after a fairly short period. That's probably the minimum it takes for this company to become profitable. Throw in NGIO listing, any successful financing that jump-starts other business lines, etc., and this SP looks more and more obscenely low.
Of course, the danger of this is that they can't get out of the OTC funk. But there are still several routes out of here... and it only takes one!
As an example, see the message trail linked here for the details that Paul first processed regarding the NuGenHealth opportunity.
Paul figured out that the minimum annual revenue from a patient in the NuGenHealth plan would be $2,079. And he made an assumption that 25% of this revenue came thru to Generex. I agree that seems reasonable. So that is roughly $520/yr/patient to Generex.
The initial 8K was for 5,000 patients entering the system in the next month or so, with an 18-month target of 150k patients.
Let's just assume that they sign 50% of those target patients in one year. That would be roughly equivalent to the population of the AZ clinics, so this would seem entirely feasible with additional opportunities coming from outside that population (the original 5k is outside this population, I believe).
So if they get 75k people up on the system, that would lead to almost $39MM in recurring annual revenues (yes, that's only Generex's 25%!). Wow! And I can only guess what the margin is to Generex, since 75% of the revenue in this example goes to our partners, and they actually maintain the software, etc. Generex's gross margins could be 50-70% (or higher?)!
At a conservative 50%, that would be almost a $20MM annual margin contribution from this project alone, and it would presumably only grow from there as they roll it out and sign more client groups.
FY20 Operating Loss for 9 months was $12.7MM. So if we extrapolate this out, the full 12 months, it might be $17MM.
That tells us that if they meet 50% of their goal of 150MM patients enrolled in NGH's system, the cash from that alone could lead to a net Operating Gain after a year.
Now throw in Excellagen sales getting on their feet. Maybe starting in the spring at $500k/mo and becoming $1MM, or even $2MM/mo after a fairly short period. That's probably the minimum it takes for this company to become profitable. Throw in NGIO listing, any successful financing that jump-starts other business lines, etc., and this SP looks more and more obscenely low.
Of course, the danger of this is that they can't get out of the OTC funk. But there are still several routes out of here... and it only takes one!
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