What's left of "good ole" XGTI?
The $4M senior convertible loan will add at least 5M shares to OS if they would recover (best case). Otherwise some VWAP and what not anti-dilution will take into effect.
5/29 $4M at 6% interest, Maturity Date 5/29/2019, starting payback 9/29/18.
Minimum buyback is after 180 days is 115% premium: $4.6M
In case company does more financing, make whole death spiral will be ignited - conversion price lowered of course.
OS ~18M?
+++
So how much equity is left for common? Using 1Q18 numbers:
Cash $0.46M
Current Assets $24.17M
Total Assets $33.42M
Total Liab $18.56M
Equity $14.85M or 82.5c
Net Equity $5.61M or 31c (Current Assets - Total Liabilities)
Applying best case: $4M cash and just $4.6M liabilities.
Cash $4.46M
Current Assets $28.17M
Total Assets $37.42M
Total Liab $23.16M
Equity $14.26M or 79.2c
Net Equity $5.01M or 27.8c (Current Assets - Total Liabilities)
++++
They burned this equity quite well during last cycles, was $27.47M 1Q17.
Net change in Cash is around $2.4M - $4.4M per quarter, so if company doesn't manage to get their burn below $2M in 2Q18 (now) and become positive in 4Q18, they need another financing around 4Q18, which will trigger this financing anti-dilutive measurements.
They require $15M revenue per quarter to break even as stated by ex CEO, but last 5 quarters just reached $9.34M - $14.11M, $11.512M average. So avg deficit was $3.488M per quarter.
+++
Conclusion IMHO: A lotto ticket, esp w/ $1 SP violation now. If SP dives to net equity value of that 27.8c I may buy some.
I am also not sure whether the only class of products they sell - the wireless video transceiver thing, is such a novel thing anymore. Consider HEVC video compression codec to be ordinary by now and wireless links also no rocket science. Meaning: Competitors are there as well.
What else worth mentioning do they have to sell producing revenues? I don't know.
Their MIC engagement can only be seen as a negative here, all burning costs, no income and giving company a bad aftertaste.
GLTA (no position here ofc)
