Agoracom: Small Cap Investment - Mosaic ImmunoEngineering Inc. - Post settlement licensing-rate and EPS calculations

Mosaic ImmunoEngineering is a nanotechnology-based immunotherapy company developing therapeutics and vaccines to positively impact the lives of patients and their families.

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Cautious

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Post settlement licensing-rate and EPS calculations

posted on Dec 04, 2007 09:05AM

Everyone will have their own "realistic assumptions", but the estimates and calcualtions below may provide a feel for what it will take to get the EPS up for the long hall. It sure seems very possible to me.

History:
Rate of sales before settlement	1	Per Month
EPS before settlement	$0.06	Per Year

Assumptions:
Licensing Capacity before settlement	1	Per Month
Average license price nets EPS of	$0.06	Per Year
Settlement yields Q EPS of	$0.15	Quarter
Annual EPS settlement-extrapolation	$0.60	minimum annual EPS target rate


Post settlement improvement assumptions:
Capacity - Alliacense # of employees	1.5	multiple improvement in licensing rate
Capacity - Improved licensing processes and tools	10.0%	% improvement in licensing rate
Customers more willing to buy/cooperate. Same amount of work required just fewer delays.	30.0%	% improvement in licensing rate
License price improvement	5.0	multiple improvement in average price

Result net of improvements	$0.64	Annual EPS estimate


By now Alliacense should have done a licensing rate analysis and taken action to increase licensing throughput. IMO they should have a target-licensing-rate that yields an EPS greater than the settlement yields - and then show some growth from Q to Q. IMO this is at least as important as the settlement outcome. You can get a much bigger estimated improvement to post settlement EPS if you assume there currently are significant Customer Delays and that the amount of work that needs to be done to define and agree on the size and value of each infringement is small (this work shouldn't change much as a result of settlement).