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How much of this $12 million will actually be delivered?
xG has a long history of announcing multi-million dollar contracts that never quite come to fruition. The PRs are all to get people to buy the stock. That's where the real money is.
That "net income" was only because they used an accounting trick called "gain on bargain purchase". It isn't real money. It's merely the difference between what they paid for an asset and what somebody says that asset is worth. Without this accounting trick they're clearly operating in the red. And look at the three-month numbers -- they're back in the red without the big GOBP. They've always operated at a net loss, which explains why they continue to issue new shares. (Notice today's S-1?)
They make their money selling stock. Their hardware/software/IP business is just incidental.
It's entirely possible Aegis had shorted the stock during one or more of the recent pumps, and was merely covering by buying up that offering. No pressure to turn a profit on shares they bought for $2.00, because they already made their profit.
It looks like people reacted to the announcement that more shares are going to be issued, which usually tanks the share price. Such an announcement also usually marks the end of the pump & dump.
When the shares are issued, I expect them to be priced at a discount and the share price will take a dump. After that, the price will continue to fall a bit and stabilize and volume will dry up. Then there will be some PR to kick off another pump & dump. The price & volume will spike and then fall, and then there will be another announcement that more shares are going to be issued.
If you time your buys/sells right and ride the pump & dump, you can make serious money. If you're holding when the new shares are announced/priced you can lose.
They have less than 10 million shares outstanding right now and 100 million authorized, so they can keep this up for a long time as long as they stay listed. If they fall below $1/share and get a delist warning, they can reverse split to get back above $1 and stay listed, like they've done twice in the past two years.
Lather. Rinse. Repeat.
Dilution is what they do. Lather, rinse, repeat.
Throw in a reverse split when they fall below $1 or when they run short of approved but unregistered shares.
At the last 10-Q they had 22.4 million shares outstanding, so after the reverse split they have 2.2 million outstanding, If this offering is priced yesterday's close ($3.62) it will result in 3 million new shares, more than doubling the outstanding. I'm guessing it will be priced significantly lower than $3.62 so that whoever was shorting into yesterday's rally can buy it up to cover their short and still turn a hefty profit.
Some things never change.
How much will this $450,000 revenue cost?
For the last couple years IMT posted net losses despite millions in revenue (which explains why xG was able to buy them for $3 million).
You can't sustain a business if you keep posting losses. As far as I can tell, xG has never posted a net profit for the year. A little revenue here, a little revenue there (and big PR every time they do get a little revenue), but net losses in the end. The only thing keeping the lights on is selling stock. A deficit of $200 million so far, and they just registered another $22 million worth of shares.
Insiders dumped their positions!
Yesterday's form 4's indicate that Coleman and Woodyatt sold everything they had. (Well, Woodyatt did hold on to 34 shares, so he's still got almost $13 in the game.) They must know something big is coming if they're getting out completely.
Condolences to anybody who is still holding this pig.
The recent S-1 says the reverse split must be done by January 3 and they must be above $1 for 10 days by January 17. It also says IMT has cashed out only a little more than $1 million of the $2.5 million they need to realize by Dec. 31.
So, IMT needs to liquidate $1.5 million more stock to finalize that deal and xG needs to raise $5.3 million cash to keep the Vislink deal moving forward. (Not to mention the additional $10.7 million they'd need to close that deal.)
Vislink is never going to happen. And I wonder what's going to happen with the IMT deal. Since April 12 they've only realized about 40% of the cash proceeds, and they have a Dec. 31 deadline looming.
The only way this goes up more than a couple cents is with another reverse split. A reverse split between 1:3 and 1:20 anytime before May 15 2017 was approved last week and will probably be announced after close Friday and go effective Monday.
Is this one last dump of shares before delisting?
And 5 million MORE shares?!?!?!
To be GIVEN to the employees per the incentive plan?
While they're talking about acquiring another company for $16 million???
Amazing.
Absolutely staggering dilution!
Two years ago, on Nov. 3, 2014, they had 25,014,103 shares outstanding and the price closed at $1.64/share. Market cap $41.0 million.
Two days ago, on Nov. 14, 2016, they had 22,370,968 shares outstanding and the price closed at $0.33/share. Market cap $7.4 million.
Note that in the intervening two years they did two reverse splits -- a 1:10 in July 2015 and a 1:12 in June 2016.
In two years the outstanding share count (adjusted for splits) exploded by a factor of more than 107 times!!! And the market cap fell by 82%!!! And they're way past the second grace period on their second delisting warning, and their only hope to get back into compliance to stay listed is another reverse split. And they keep postponing (six times now) the special shareholder meeting to vote on a reverse split because apparently they aren't getting enough yes votes for it to be approved.
Could this be the end? Their only real source of money is from selling stock. No reverse split means no Nasdaq. No Nasdaq means the OTC, and I doubt there's enough liquidity there to move enough stock to keep the lights on, much less raise $16 million for the Vislink deal.
How many more postponements of the shareholder meeting can they get away with before Nasdaq says "Enough!" and boots them?
Another Delay!! (The sixth now.)
The special shareholder meeting to vote on yet another reverse split (their fifth RS in four years) originally scheduled for Sept. 22 was delayed to Oct. 3, then Oct. 7, then Oct. 21, then Nov. 8, then to Nov. 16, now to Nov. 23.
Apparently they still don't have enough yes proxies to approve another reverse split, and they know if they don't do another reverse split they're finished.
Where is the money coming from for Vislink?
Delaying the inevitable.
The special shareholder meeting to vote on yet another reverse split (their fifth RS in four years) originally scheduled for Sept. 22 was delayed to Oct. 3, then Oct. 7, then Oct 21, then Nov. 8, and now to Nov. 16. That's five (5 -- count 'em!) delays of this shareholder meeting. And they're already a month and a half past the second 180-day grace period on their SECOND delisting warning.
And at the same time they announce this FIFTH delay, they also convert a bunch more series D shares into common shares so IMT can continue to convert them to cash to close the deal.
Pretty funny. Delisting hanging over their heads. Still need to issue more shares so IMT gets the remaining cash promised for the sale to xG. All these delays of the shareholder meeting tell me they aren't getting enough "yes" proxies to do another RS. And without another RS they don't stay listed. And if they don't stay listed IMT doesn't get their cash. And if IMT doesn't get their cash, will that deal fall through?
And a couple weeks ago they announce another $16 million deal where they need to come up with $5 million cash? Where's that money going to come from?
Deck chairs on the Titanic.
Crank Up The Printing Presses!
"The Company is required to raise at least one-third of the Purchase Price and place it in a restricted account to be used for closing of the Transaction within twenty (20) days of the receipt of pro-forma financials (the “Financing Condition”)."
That's 1/3 of $16 million, or $5.3 million. At today's prices, that's 12.4 million new shares. O/S at the last 10-Q was 17.1 million. Soon it will be almost 30 million, and significantly more when they have to cough up the remaining $10.6 million! All this while they're still converting Series D shares to common shares to pay off the IMT deal.
That $3M award was to SwRI. xG only gets a part of it. I seem to recall something similar about a $497 million contract two years ago. What happened to that? How much did xG get there? I don't seem to find anything on the balance sheets.
And what is the margin on this $700k worth of orders? Again, IMT is a money loser. I suspect xG bought IMT merely so they could book revenue for the PR value and hope nobody looks at the bottom line.
Where is xG going to get the $16 million to pay for this Vislink acquisition?
Wow. If you think dilution last year was bad...
xG exploded the share count last year by a factor of FORTY TIMES just to keep the lights on and purchase IMT for $3 million. (5,128,883 shares outstanding on 8/15/15, 1:12 reverse split on 6/20/16, 17,128,866 shares outstanding on 8/18/16). The share price also plummeted during that time due to the massive dilution.
Now they plan to acquire another company for $16 million???
xG makes their money by selling stock. IMT is a money loser. Filings for several years before the acquisition by xG show millions in net losses despite millions in sales. xG's only option for raising money for this Vislink deal will be to print more shares. Better hope their printing presses are water cooled!
Another delay of the shareholder meeting!
It's pretty obvious they haven't been able to collect enough yes votes to authorize another reverse split, so they keep postponing the shareholder meeting "to give the shareholders more time".
How long will Nasdaq put up with this sh**?
It will stay where it is as long as IMT keeps dumping shares. And they still have to dump a lot of shares to make that magic $2.5 million by Dec. 31.
LOL! It's always shorty's fault, isn't it?
xG will delay the shareholder meeting a couple more times and register more shares while we wait. Nasdaq will get tired of the games and finally delist them. Come Dec. 31, IMT will note that they weren't able to convert shares into the $2.5 million required per the purchase agreement, will point out that there isn't enough liquidity on the OTC to do so even if xG were to register more shares, and will pull out of the deal. Mid-January xG will issue a PR announcing xG and IMT are parting ways, and somehow they will put a positive spin on it (much like when Palmi Sigmarsson shorted >$2 million while on the board of directors or when the Treco deal collapsed -- always a positive!).
The hurricane is just a convenient excuse.
On Aug. 9 they announced the shareholder meeting.
On Aug. 19 they scheduled it for Sep. 22.
On Sep. 21 they delayed it to Oct. 3. (give shareholders more time)
On Sep. 30 they delayed it to Oct. 7. (give shareholders more time)
On Oct. 6 they delayed it to Oct. 21. (hurricane and more time)
The first date was already a full month and a half after they first announced it. Oct. 7 is two months. And now they need two more weeks? Yeah, right.
They know they're done on Nasdaq and they're dragging their feet.
That's the third delay of the shareholder meeting. They're drawing things out as long as possible because they know the Nasdaq game is over. Wanna bet we see more shares registered while we wait for the meeting?
Google edgar sec filings xgti
Schmitt's acquisitions during 2016 calendar year:
Jan. 06: 229,378 shares "2015 Employee Stock Purchase Plan"
Apr. 19: 991,667 shares "2015 Employee Stock Purchase Plan"
Jul. 20: 67,614 shares "2015 Employee Stock Purchase Plan"
Aug. 26: 103,444 shares "2015 Employee Incentive Compensation Plan"
Oct. 3: 296,984 shares "2016 Employee Stock Purchase Plan"
I don't see any purchases on the open market there. They're all through payroll deductions from Schmitt's rather healthy salary (and at a discount), or they're gifts outright.
Do the insiders ever buy?
Almost all the form 4's ever filed by these guys carry footnotes saying "per employee incentive plan" or "as compensation for serving as a member of the board of directors". Has any insider ever actually bought xG stock? At least at market price?
I note Coleman's form 4 today shows he adopted a 10b5-1 plan on 9/23, acquired 42931 shares on 9/30 per the employee stock purchase plan, and then on 10/3 sold 42931 shares per the 10b5-1 plan he adopted on 9/23. But then, he was given another 21702 shares per the incentive plan. Shows confidence, huh?
And I note that Woodyatt dumped almost his entire position yesterday, and he did so pretty close to the high of the day. He knows what's coming.
More dilution. Sheesh. These guys have balls.
1.6 million shares at $0.28. They already blew up the outstanding share count by a factor of 20 between last year's reverse split and this year's reverse split (probably just the first one this year, too). They have another reverse split (their fifth in less than 4 years) pending a vote, which in turn is pending a meeting that is currently adjourned to Oct 3.
After falling below $1 a second time because of all the dilution and getting a second delist notice, and after running out a whole year of grace period they appeal the delisting. And they dilute some more.
Brass ones. Big brass ones. Huge shiny brass ones. I'm in awe.
Why is this still trading?
The delist warning and extension gave them until Sept 26 to trade above $1 for 10 consecutive trading days. They didn't make it.
So why hasn't this been delisted?
It sure looks like they're delaying the inevitable as much as possible.
Feb. 9, 2015: First delist warning (under $1)
Jul. 17, 2015: Reverse split 1:10 (back above $1)
Aug. 5, 2015: Notified back in compliance
Sep. 28, 2015: Second delist warning (under $1 again)
Mar. 29, 2016: 180-day extension granted
Jun. 20, 2016: Reverse split 1:12 (back above $1)
Jul. 5, 2016: Back under $1 (didn't make 10 days to void delisting)
Aug. 9, 2016: SH meeting announced for Sept (*) to vote on yet another reverse split
Aug. 19, 2016: SH meeting scheduled for Sept 22.
Sep. 22, 2016: SH meeting adjourned to Oct. 3 "to allow additional time for the stockholders to vote"
Seriously? Six weeks since they first announced the special shareholder meeting and they still need to give the stockholders more time to vote?
Given that this is their second delist warning, and Sept. 26 is the end of the 180-day extension (second 180-day grace period), AND since receiving that first delist warning they diluted the bejeezus out of the share holders (OS went up by like a factor of 20x!!!), what are the chances that Nasdaq will grant them another extension to stay listed?
And if they do go to the OTC, is there enough liquidity there for IMT to convert enough shares to cash to pay for the IMT deal? Recall xG paid $2.5 million of the $3 million purchase price with shares. If IMT doesn't convert that to cash by Dec. 31, xG has to cough up more shares or otherwise raise additional funds. Will the IMT deal fall through in the end just like about every other deal they've ever made? Will XGTI be delisted from Nasdaq? Will xG list on another exchange? Or go private? Or will xG simply go "poof" and everybody will wander off to some other "business venture"? Enquiring minds want to know!
To be bought out they would need to have something people want. xMax has been a joke from day one, and IMT is a money loser (look at their balance sheets from the last few years). Nobody wants xG's products.
And now they're pitching to the "house of worship market"??? LOL!! Sounds like a huge market just waiting to be tapped </sarcasm>. Are we going to start seeing drones buzzing around the arena while Benny Hinn does his faith healing shtick?
CFO just dumped half his position.
Obviously he knows what's coming.
Those Are NOT Buys.
Check out the transaction codes and footnotes. Those are all free shares being given to them as part of the employee incentive program or as compensation for serving on the board of directors. Virtually all of the insider transactions in the past couple years have been free shares given as incentive or compensation. These guys are smart enough not to throw their own money down this hole.
Note Belinda Marino's form 4. She SOLD the shares 5 days after she was given them. In fact, she always sells the shares she's given. Look at her past form 4's. She knows they'll be worthless very soon.
That was some power hour. Up a whole penny for a couple hours. To the moon, huh?
It's hilarious people still see big things coming, when the writing has been on the wall for years. If XGTI closes below $1 next Friday, say goodbye to Nasdaq.
The clock is ticking.
If XGTI doesn't get above $1 by a week from today, it can't make 10 trading days above $1 before the Sept. 26 delisting deadline. And the special shareholder meeting to vote on another reverse split isn't until Sept. 22. Looks like they're in kind of a pickle.
Is this the end of xG on Nasdaq?
Even if that company is a money loser? One money losing company buying another money losing company?
According to Vitec PR's, in 2013 IMT broke even on GBP14 million revenue, and in 2014 IMT posted a loss of GBP1.3 million on GBP7.9 million revenue. That may have factored in to Vitec's decision to sell IMT.
And look at xG's 8-K/A filed 4/13/2016. In 2015 IMT posted a loss of $3.7 million on $7.2 million revenue. That may have factored into Skyview's decision to sell IMT a mere 14 months after buying it from Vitec.
This doesn't look too good. Everybody's raving about the revenue IMT is bringing to the table. But they don't say anything about the net loss. Does xG really believe they'll be able to turn IMT around?
Amazing how they keep the suckers on the hook. "Something BIG is coming!!!" Yeah, right.
"Something BIG" is always coming, but it never gets here. There were similar rumors and a rally leading up to the last earnings & conference call, but it turned out to be a bust. And there were similar rumors and a rally leading up to this latest earnings and conference call, and it turned out to be a bust too.
Now we're supposed to believe "something BIG" is still coming?
These rumors and rallies are all about boosting the share price so IMT can realize more cash as they convert their series D to common shares and dump them on the market. IMT needs to realize $2.5 million cash proceeds before Dec. 31 from the shares xG used to buy them, or xG needs to give them more shares.
I think you're right. I think it's the conversion of more series D to common shares so IMT can sell them on the open market for cash. The recent 10-Q said that as of August 15 they had converted 625,002 shares of common stock, and this S-3 is 833,336 more shares.
The IMT deal was $500,000 cash and enough stock to net IMT an additional $2.5 million cash. How much of that $2.5 million has IMT realized as cash so far? I think we'll see more of these pump & dumps and S-3's over the next couple months. The agreement says that if they don't hit $2.5 million by December 31 xG will have to issue them more shares.
It seems like xG pays salaries and legal with shares, too:
"During the six months ended June 30, 2016, the Company issued a total of 818,942 shares of common stock having a fair value to employees, directors, consultants and general counsel in lieu of paying $1,020,000 worth of services."
"From July 1, 2016 to August 15, 2016, the Company issued a total of 829,743 shares of common stock having a fair value of $493,000 to employees, directors, consultants and general counsel in lieu of paying cash for their services."
The company has been doing a lot of cash raises the past year. What are they doing with all that cash?
The Gall. The Unmitigated Gall.
Incredible. During the conference call Schmitt talks about the secondaries, and says the follow-on raise "grossed about five million, netted us about 4.4 million which we expect will see us through well into next year"
And then DURING the freaking conference call (probably as he was saying that) they file an S-3 for another $358k worth of new shares!!
It's absolutely mind blowing that they can keep getting away with this. Same scam over and over again. Same freaking page out of the penny stock scam playbook. And *still* people fall for it. No doubt they'll do yet another secondary before the reverse split in September, and then at least one more before the end of the year. And people will STILL keep buying.
No, I'm not a victim. I shorted this in 2013 and netted a couple thousand, and have been watching the train wreck ever since. I'm just constantly amazed that people can be stupid enough to fall for such an obvious scam. Sheesh. Ten minutes with Google tells you all you need to know.
The 8-K yesterday only said that the 10-Q had been filed last week.
The huge spike is nothing more than the typical pump & dump right before an earnings conference call (today at 4:00pm EDT). If you can get out at a profit, you might want to take the gift. It's not going to last long.