How Do You Want To See Elite

After the recent delay set forth by the FDA, Elite investors/traders/observers (whatever they wanna identify as) have been on a back and forth.  At question, for the most part, is how effective is Nasrat and was SeaQuestOX "rejected" or was the CRL really something that can get worked out.  With the stock price sucked down into the mid-teens confidence has been vulnerable, and the chat boards are lit up with heavy language from both perspectives, those that call the delay a "rejection" and/or question Nasrat's ability to lead the ship forward in the right direction and those longs who believe and continue the push forward and provide their evidence that Nasrat can make a clear path for the FDA to accept the flagship drug.

The company has improved their generic business and the numbers do indicate increasing revenues.  This alone is a fantastic sign, the goal is of course to get that enormous push that acceptance of SeaQuestOX would provide.  Only then, it seems, could more of the bigger aspirations occur.  Elite could get to NASDAQ, but organic rise without a split is going to take time.  A buyout, which could also be more of a realistic notion with approval, remains a big question mark, and how it will impact the share price even more of a hazed outcome.  And with the heavy question marks, there are heavy handed questions made by people on the boards invoking conspiracy theories, such as the mysterious Sequest Tmax delay, and "decisive evidence" some feel exists that SeaQuestOX will not be approved.

So you have a lot of comments designed to evoke emotional responses.  Every negative comment on the ihub board is eliciting negative emotional responses and while the board is wonderful as a research tool, one must refrain from answering comments such as:

namtae  

	Tuesday, 08/16/16 07:05:55 PM
Re: toybaby post# 222146

Sorry but the FDA stopped Sequest and Nasrats nothing can stop us BS!!

The one shot longs had was the recent earnings call and Nasrat had nothing of substance to say.. of course, contrary to the BS about Elite always having a Q&A, NO QUESTIONS ALLOWED

That alone should have sent shivers up longs backs


The FDA has given ELITE an opportunity to fix what it feels is not yet solid.  There's a problem, can it be fixed?  What sort of wait will everyone have to endure for potential approval?  This response by Namtae was given to this comment:

toybaby  

	Tuesday, 08/16/16 06:56:38 PM
Re: jour_trader post# 222145

They didn't stop US its temporary , and everyone knows that !

Hopeful, perhaps a bit naive, but don't investors want the company to succeed with their hard earned money?  Doesn't sound like much of a pump but the response and others like this one are worded to invoke emotional responses:

dr_lowenstein  

	Tuesday, 08/16/16 07:03:11 PM
Re: toybaby post# 222144

thanks, that clears it up, so the understanding of hakim's previous association with elite is about as good as his understanding of the FDA, thanks

Frustrating because the PPS is struggling so much.  Sometimes the only way to stay sane is to refrain, shut up, and use given DD to support the choice to invest or de-vest, as some of the best Elite investors did in their big run up years ago.  The more pumping, the more these zingers will come flying back as they have since July 14. 

Let’s talk about the business that is Elite. Why business and not p/s or market cap? Because it is what a company does as a business that will determine the actual long term value and p/s. With that, we need a little context…

What was the p/s in 2014 at the time of the poison pill that required a valuation analysis (which placed the value of Elite far higher than today, but let’s stay on point)? The answer is about 41 cents. What is it now? It is 16.5 cents. Seems ridiculously low, but an argument has been made that the p/s in 2014 reflected a lower number of outstanding shares. A fair observation, but a flawed statement about the financial viability of Elite. Pointing out the market cap of a company fails the test of context, as we know that investor sentiment drives the p/s and the argument that “the market knows value” really should be amended to say “the market is subjective” because the information upon which the buy/sell decisions and the ability to execute trades are asymmetric.

Which is why we need to take a look at some very clear and irrefutably non-subjective numbers:

• For the fiscal year 2014, Elite had revenues of $4,601,376
• For the fiscal year 2016, Elite had revenues of $12,498,332
o About a 2.7X increase

Simply based on revenues, one must question why Elite’s p/s is so low. And, before arguing there are a larger number of shares outstanding, I would suggest by that measure Elite is still under priced. How so? Let’s look at some additional numbers and do some simple math.

2014: Elite had revenues of $4,601,376 and total diluted shares of 526,880,118 (which are more than O/S, but less than A/S…THEY ARE SHARES ELITE IS RESPONSIBLE FOR PAYING OUT). The simple math is revenues divided by diluted shares. For 2014 the ratio of revenues per share is .0087. Are you with me so far?

2016: Elite had revenues of $12,498,332 and total diluted shares of 757,579,152 (again, these are more than O/S, but less than A/S…THEY ARE SHARES ELITE IS RESPONSIBLE FOR PAYING OUT). The simple math, again, is revenues divided by diluted shares. For 2016 the ratio of revenues per share is .0165.

Now, please feel free to check the math on the above. But, it is correct. So, what does that tell us? That the value of Elite based on very real sales numbers versus the diluted share count has increased today from two years ago by about 1.9X. So all the nonsense about dilution hammering Elite’s value is just that – NONSENSE! It remains that Elite is worth more today than at any time in the past 5 years based on revenues versus diluted shares. Irrefutable! If you want to factor in the tech/IP, Elite is vastly underpriced at its current p/s. And, should there be any question let’s use one more ratio that offers a clear understanding of Elite’s solvency at THE PRESENT TIME. The ratio is called the Current Ratio and tells us whether a company has liquidity (I should not have to explain that to investors). To be clear what we mean, Investopedia offers a great definition…

Quote:

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The current ratio is a liquidity ratio that measures a company's ability to pay short-term and long-term obligations. To gauge this ability, the current ratio considers the current total assets of a company (both liquid and illiquid) relative to that company’s current total liabilities.

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Doing the math…for 2016 the current assets divided by current liabilities means that Elite’s Current Ratio is 3.6. For context, anything over 1.0 is considered good. And, for additional context, Elite’s Current Ratio is better than AstraZeneca, Allergan, & Teva Pharma. PERIOD

So, as Elite prepares to report its most recent quarterly results, we should expect the financial condition of the company will continue to reflect increasing YOY revenues and likely an increasing current ratio. As a business, Elite is on solid ground and they are doing what good businesses do – make money and drive toward strategic results. All the noise about its p/s is just that – noise that is subjectively disconnected from the business fundamentals.

Now, does Nasrat know the FDA?  Results are going to be the only evidence.  Being strung along for years, as many have already been, just got old.