SwingTrade Member Forum

[FrankLind]

MTSL.

I recently set up a call with the MTSL CEO and CFO in Israel.
It wasn’t an easy call because their English wasn’t great but more importantly they were very careful and tight-lipped about future prospects, however, I did get some useful information.

Earn-outs will be capitalized on balance sheet not subtracted from EPS. Basic structure is 45% of Vexigo’s EBITDA contribution will be paid as an earn-out. If Vexigo performs above expectation, there will be an expense on the income statement. If below, it will be a “negative expense”
For better understanding this area the CEO recommended looking at the public company Matomy. I googled this and noticed one of the co-founders of Matomy is now at Vexigo https://il.linkedin.com/in/adiorzel
CEO was asked to come to MTSL. He wanted the challenge of turning around the company. Obviously feels he can with big upside to his equity position. He was the co-founder of MIND C.T.I (MNDO).
Vexigo is more technologically advanced than competitors (don’t really understand this)
Asked about expectations for Vexigo growth - said will not talk about future prospects.
Visualizr product is new and is not generating much revenue yet.
Bought Vexigo because they were looking for a high growth company in a high growth market.
Did not give q4 numbers because when they announced acquisition, q1 were the most up to date numbers and at time of first looking at it, q4 numbers were not available.
Vexigo’s preferential tax treatment has not been changed after acquisition - although this might be re-examined in the future.
NOLs from Mer-Telemanagement cannot be used by Vexigo.
No IR plans until market see Vexigo results.
A few synergies because both software companies + can merge offices in the US. Generally two separate companies.