Xtract One Technologies Inc. T.XTRA

Getting to Breakeven With Current $8.3mm Cash?

[bobbythebaker]

At the end of July 2023, the company shows $8.3mm cash.  I think one of the slides showed that cash burn decreased for the 4th straight quarter down to $2.9mm or so?  And Karen seemed to indicate this trajectory is going to continue.  What if that meant going down quarterly to $2.5mm, $2mm, $1.5mm, $1mm, $0.5mm, $0mm?  That would only burn $7.5mm cash, so no future funding needed.

Peter suggested the company is going to expereince a similar % gain (357%) in annual bookings next year, which tells me we are going from $15mm yesterday to around $75mm a year from today.  At that point, I'm thinking markets will care less about whether the company is burning $0mm or $2mm a quarter (and any tiny amount of funding like that will be easy to come by) as the company starts to get valued by rampant bookings growth and the metrics XTRA told us they will be providing in the quarters ahead:  number of units installed and profit margins per unit. 

I know Peter said expenses are going to start rising. I believe he said a staff increase of 20% next year, and doubling of manufacturing capacity (then doubling it again the next year).  But I also believe Karen also said increased sales would offset those cost increases.

They mentioned current breakdown is 70% subscriptions, 30% outright sales.  I guess that sort of mix will allow XTRA to harvest enough profit on outright sales to get the subscription base built and churning its own income.

This all a long way of saying anyone shorting or holding back on the idea that that XTRA will need to go to the well on funding may find themselves left behind here.  XTRA seems to have changed its tune on financing growth from third parties and instead plans on fueling it within its own business model.

[Nightstocker]

Agreed, Bobby. These financials are an inflection point which provides a roadmap to Xtract hitting that magical break-even mark, where revenue and expenses balance out. Break-even rings the dinner bell for institutional investment, more so than any juicy contract or partnership. It shows a company's fiscal responsibility, and security for investor client dollars. By Q2 next year, we could

[kidl2]

Nightstocker: “Institutional Investment” … XTRA is miles away from attracting “conventional” Institutional Investors such as banks, insurance companies, pension funds etc with “conventional” being the operative term. XTRA at this stage doesn’t need this group. What XTRA needs is the unconventional / less conventional investor groups and high value individuals. There is an abundance of them out

[Nightstocker]

Sorry kidl2, totally disagree. Institutional investors have all sorts of categories of risk for their clients, and if Xtract balances its books , nabs DHS cert and announces a few more big contracts, institutional investors will definitely be including Xtract in a higher risk portfolio.