Oops, I screwed up. CCSI reported today that its revenue for 1998 was only $418,600, not $450,000 as I posted earlier. (even though this is a $168,200 increase from 1997!)
biz.yahoo.com
Chromatics incurred net losses of $7,284,800 (net loss of $0.49 per share) and $5,053,100 (net loss of $0.40 per share) for fiscal years 1998 and 1997, respectively; the weighted average number of common shares outstanding was 2,366,589 greater in 1998 as compared to 1997.
OK, their shares outstanding increased by at least 13 percent, which in most cases would reduce the amount of net loss per share, but CCSI is bleeding so badly its loss per share rose 22.5 percent. Net loss itself increased by over 50 percent.
OK, that's looking back. What is forward for CCSI? How many units of bilirubin testers do they have to sell at $3000 to $5000 each and lensettes at $10 each to justify the market cap?
sec.yahoo.com
The ColorMate(Registered) TLc BiliTest(Trademark) System as currently marketed by the Company's medical division has a list price of $3,000 to $5,000 depending on the model and may be leased or used under the limited time offer for use and evaluation of the system, all with either purchase of minimum monthly supplies of the TLc Lensette(Trademark) calibration standards at $10 per TLc Lensette(Trademark), or minimum monthly charges of $10 per use under a Managed Use Program.
Let's assume they get 50 percent of the purchase price of the lensettes (a gross overestimation, but let's assume) and since CCSI thinks this will be the bulk of the revenue, let's disregard the profit from the machine. We want a PE of around 30, so we need to have earnings around $0.346 per share, times 15.4 million shares, or $5.33 million total earnings, divided by $5 per lensette, equals 1.06 million lensettes. Now this leaves out a lot, like overhead, etc., and overcompensates by figuring 50 percent revenue from each $10 lensette (hey, it's a very rough calculation, I'm not an analyst). Can CCSI really sell a million lensettes this year? When they have yet to name a distributor? I doubt it.
And what about existing competition?
Competition. To the extent the Company implements its business plan to commercialize a medical application for its Intellectual Properties, it will be entering a field characterized by rapidly changing technology, intense competition and extensive research and development. The medical products market in general is highly competitive. . . . The Company will be competing with companies, some of which are more established and which have greater financial, technical, manufacturing, marketing, research and development and management resources than the Company (including companies such as Minolta Co., Ltd., Respironics, Inc., which recently acquired Healthdyne Technology, Inc., and SpectRx, Inc., among others), and some of which have greater name recognition and lengthier operating histories in the health care industry. The Company believes the only commercially available non-invasive bilirubinometers with FDA marketing clearance in the United States are the Minolta Jaundice Meter and the SpectRx Bilicheck.
Minolta? I'm sure they don't have any clout. CCSI will clobber 'em.
So how far have they gotten in penetrating a market? Not just the bilirubin market, ANY market:
The Company has not yet achieved commercial market penetration in any industry, and there can be no assurance the Company will be able to do so in the future.
The only downside I can see is that 1/3 the float is short, a bit crowded. |
