According to the 2021 Annual Report, net assets are A$4,145,465. To date, they have accumulated losses of A$34,648,789. The quarterlies indicate that they are still burning through A$3 million per year, despite the receipt from Kyocera for Progenza. As at 30.06.2021 there were 303.538 million shares on issue, which at the current SP implies a market cap of A$18,515,818, which is 4.46 x the net asset value. One could argue that MC = NAV + PV(income), but the PV of the income stream comes up well short of covering the $14.370 million extrinsic value. You can't really use a discount formula for valuing the share as the DGR (dividend growth rate) is not constant, and you cant use the Gordon Growth Model either as there is no consistency to dividend and certainly no anticipated annual growth rate.
Put another way, the MC of $18 million (SP at 6.1 cents) simply does not add up.
So unless I am missing some key information (like a contract that is going to see a significant upswing of earnings), I am at a total loss as to why the market is rallying.
The only thing I can assume is that the latter is true: there is something we peasants on poor street don't know. Hence my thread header "What am I missing here"!
Regards Kit
RGS Price at posting:
6.1¢ Sentiment: Hold Disclosure: Held
