The Holiday Season sucks for this space, from Thanksgiving to New Years. However, with these recent US shooting, we can expect federal school safety grants forthcoming with a new US Congress, but availability of funds will be months away. And it looks like Xtract 1 is desperately in need of a massive cash infusion (aka big dilution) to keep afloat by end of Q2. before ehading into Q3.
Based on their sales announcements, and cash burn, they need at least another 12-month runway to breakeven. If I am not mistaken, the average quarterly revenue of $900K includes Xtract's revenue from government contracts, which tap out at $1M. That will run dry unless they secure another AI contract. Hope those are being worked on....
So let's talk STOCK delusion for CASH infusion.... 163.18M Shares outstanding. A 10% Dilusion would add in 16.3M more shares at $0.60CAD/share (and 16M more warrants)... that $9.0M CAD in Cash (less broker fees) upon closing...which should be enough for 12 month run-up to breakeven. But why? Why doesn't OVG let it go bankrupt and pick up working product on the cheap? Just a simple question, after we see Q1 results on or around December 15, and see how Q2 results lay out.
Remember, last year PAT began looking for fund in Dec 2021, and landed $6M around March 17, 2022. If this same timeline plays out on this "anticipated fund raise", by March 15, the Q2 MD&A will be out, and additional investment or let it go bankrupt can be decided. Again, just my own thoughts on how possible ways this can play out in next 4 month (December - March).
Here are my estimates for Q1, which should be public by December 15, 2022 on Sedar. I expect to see the following in the MD&A for Q1, FY23 based on averages from earlier MD&S and sales announcementsduring Q1. (Again, this is purely my own estimates in revenue, cashburn and remaining cash in bank.)
MY ESTIMATESL Q1, FY23 / Aug 1 - Oct 31, 2022
- Cash In Bank end of FY22 $6.28M
- Average Quarterly Revenue $900K
- Average Quarterly Burnrate. ($3.15M)
- Cash In Bank end Q1/FY23. $4.03M. (OCTOBER 31, 2022)--> upcoming Dec 15 Q1/MD&A
And based on Q2 ending January 31, 2023, with the economy slowdown and companies tightening their belts,, here's my estimates for Q2, FY2023, based on prior MD&As and current Q2 sales announcements.
MY ESTIMATES Q2, FY23 / Nov 1 - Jan 31, 2023 (Based on current sales announcements)
- Cash In Bank end of Q1/FY23 $4.03M
- Average Quarterly Revenue $900K + $190K New Sales** = $1.09M
- Average Quarterly Burnrate ($3.15M)
- Cash In Bank end Q2/FY23. $1.97M (JANUARY 31, 2023) - March 15 Q2/MD&A
**Estimated Q2 New Sales Add Up
- 8 schools -> 8 entrances -> 8 XtractOne Platforms ==> Revenue $40,000. ($5K per, plus annual SaaS)
- 1 Stadium - 10 entrances --/ 30 XtractOne Platforms ==> Revenue $190,000 ($5K per, plus annual SaaS)
- TOTAL. $190,000...only recognized once fully deployed
Looking forward to see the Q1 Results in 15 Business Days.