cont.
So, totaling what we have so far gives us....
SUB TOTAL= $30.8 M.
COCN also has 23 issued U.S. patents on its technology = multiply by $0.5 = $11.5 million. (We'll ignore the other 21 U.S. patent applications along with the corresponding foreign patents and patent applications.)
SUB TOTAL of market cap from technology and patents = $42.3 M
PLUS CURRENT ASSETS MINUS LONG TERM DEBT = (using info from the 10Q for Q ending 3/31/99) $9.275 M - $0 = $9.3 million, rounded.
TOTAL= $42.3 M + $9.3 M = $51.6 M
Now, according to the model, one should add in a "management factor", computed as follows.
MANAGEMENT FACTOR:
*ACCUMULATED DEFICIT = $116,151 (as of 12/31/98)
*REVENUES LAST FIVE YEARS = $89,233 (as of 12/31/98)
*MARKET CAP MANAGEMENT FACTOR = (89,233/116,151) = 0.77
MULTIPLY $51.6 M times 0.77 = $39.7M
TOTAL MARKET VALUATION (management factor plus valuation) = $91.3 M.
Now we take this down to a per share figure.
SHARES OUTSTANDING = 4,633,000 as of 5/17/99, per the 8-K
FAIR VALUE SHARE PRICE (according to the model) = $19.71
CURRENT SHARE PRICE = $1.25
To sum up, according to the model the shares of COCN are undervalued by $18.46, or about $85.5 million in market capitalization. IOW, they are trading at about 6% of their "fair value" price according to the model.
That's it.
Anaxagoras
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