Last Updated: July 27, 2010 - 10:13am EST
NEW YORK--Ludlow Capital issues research opinion on Avitar, Inc. (OTC:AVTI), a holding company focused on investments in joint venture projects, with a valuation price target of $0.01 to $0.015 per share.
Overview
On June 29, 2010, the Company announced that it had entered a joint venture agreement with Johnnie's Famous Shoes, Inc. (www.johnnyfamousshoes.com) of New York for the purpose of producing and distributing its summer run of high end, luxury, Men's footwear. The Company is expected to not only back the summer production run, but will also be involved in the management of this project, and share in the profits as well. Upon successful completion, Avitar will partner on future production runs with Johnny Famous Shoes as new product lines roll-out.
Production and Distribution
What could set this company off is any announcement of distribution for this new summer product line out to the stores. Johnnie's Shoes offers a nice selection of retail products and has shown strong initial sales growth in recent months. According to reports, the Company may have already begun production of this new line under the joint-venture, which moves them even closer to having products out in the stores in the very near-future. Thus, the market is currently anticipating an announcement regarding distribution of their first shipments out to Broadway stores in New York City.
Valuation Target
On July 22, 2010, Ludlow Capital was able to confirm directly with Mr. Cory Gelmon, the CEO of Avitar, Inc, that the shares structure for the company is currently around 620 million shares outstanding, with 800 million shares authorized.
To be conservative in structuring a valuation formula for this company lets take into consideration a share structure at maximum dilution of 800 million shares outstanding. There is no indication that the company has issued anywhere near this level, but to get a clearer and more reasonable idea of price valuation we are taking that maximum possibility into effect to render a more conservative and realistic target.
Based on solid initial growth for Johnnie's retail consumer-line, the prospects of having their first partnership products out in retail outlets in the near-future, and Avitar's management and profit sharing on this and possible future ventures, we feel it wouldn't be out of the realm to justify a fair-market value for this company in the $8 to $10 million range. Based on maximum shares authorized of 800 million, that would equate to a price valuation target of around $0.01 to $0.015 per share.
Risks
The company is currently traded on the Pink Sheet exchange, and thus has limited public information available for review. Investors are highly encourage to consult with a financial advisors before making and and all investment decisions regarding these kinds of securities.
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