Xtract One Technologies Inc. T.XTRA

Is my investement thesis broken ?

[FrozenInOntario]

The main reason I invested : Weapon detection demand is increasing, their technology (Smart Gateway) appears solid, they posted a couple of excellent quarters indicating some high growth,  they had a major strategic investment from MSG and their main competitor was in shaky grounds.   And Evans approach seemed like a winner to me, stressing the added value brought by Xtract system to their clients.

On the flip side, valuation of Xtra was quite expensive with a market cap factoring torrid growth.
So, should I sell after this quarter results as growth appeared to have stalled ?

Well,  Smart Gateway is not way better than Evolv, at least not enough to justify paying a huge premium for Xtract shares..    And EVOLV, despite their legal problem, still have the $$$ to muscle their way with their marketing budget versus Xtract and its limited liquidity.  So, even with a better project, I do not expect Xtract to grow exponentially with Smart Gateway.

So, I should sell given current valuation even tough setbacks are normal for microcap.

However. One Gateway is a game changer or so it appears.   We will not see sales before the 3^rd/4^th quarter.    Is it normal ?  Well, as the product still need to be certified : yes.   So, logically, I can buy management explanations and forecast.   My only concern would be their cash situation.   I was expecting the .75 warrants to be exercised in March.   They might have to sweeten that issue price.  But we are not in bad cash situation for the moment looking at the current balance sheet.
So, I am not selling.  I might add a few warrants along the way.   Will reassess the situation later on.

GLTA

[Engadged]

I'm pretty much in the same boat on thesis. What "broke" for me is the fact that now all of a sudden PE (and his minion here) are literally telling us Smart Gateway is irrelevant and it's all about a product that isn't even selling yet. I'm sorry but Start Gateway is supposed to be the "game changer" to begin with!  

[Engadged]

By the way. How much runway do you think they have with the available cash? Thanks

[FrozenInOntario]

Runway with the available cash ?  The had 6 million in cash this quarter and they burn 2 M/quarter.    So till the end of the year.    I was counting on the .75 warrants expiring in March but logically, they will not be exercise unless we get a nice bump on the share price prior to March.  So we might get a small raise prior to June when they release their 3rd quarter

[Golden100]

Exactly. A prudent thing to do is wait to see where this unfolds in the next few months. To come to the conclusions this is dead in  the water because of a soft quarter is ludicrous.     

[Engadged]

Thanks.  Yeah, based on everything PE is saying and after thinking about it over the weekend, I'm giving them until next fall to prove to me that sales aren't leveling off.  Because after this point, they'll be out of excuses and soon after - money

[Golden100]

Wow talk about a 360. The stock rebounds a bit today and all of a sudden the bullies are starting to back down. This is far from over. Don't let anyone talk you out of your shares. 

[Revenant]

That seems about right, Frozen. It would be unwise to unload at this stage, IMO. SP drops alway level off and crawl back up...even if next quarter could see it drop further. I suppose it all depends on what price you bought them for. Not sure about Xtra shares exacting a cost "premium". They are nearly 10% less than Evolv. The concern most of us have here, is that Evans will

[Revenant]

Sorry, 90% less expensive than Evolv.

[Revenant]

Uggghhh! Sorry, brain isn't working- Xtract is one tenth the price of Evolv!!! 

[Engadged]

He was talking ratio of market cap to stock price 

[FrozenInOntario]

Hey Rev, Not too sure how you compare EVLV and Xtract.   EVLV did 25 M last quarter, say 100 M USD on a annual basis versus their market cap of 700 M USD compared to Xtract with say 20 M Sales/year and a market cap of 130 M post earning.,   Factor in the cash on hand and I would say the Xtract is valued more dearly than EVLV. Not too sure also I agree that Evans is

[Pliskenlives]

@frozen There are fundamental ways you can compare Evolv and Xtract.. first and foremost.. advertising and marketing.. it does not matter how much capital a company has the.. principle still remains .. you have to do it at what ever scale you can afford .. but you have to do it.. Evolv simply understood that from the beginning, and they learned the nuances of it as well.. and focused on it

[TedOrlowski]

Plisken.    Well said and 100% evans has lost all credibility and is sinking this stock

[FrozenInOntario]

Hey Plisk, Not to sure I follow you, EVOLV went public in 2021  with a blank check company with 170 M USD in cash.  They still have 50 M or about in cash.   So I sure hope that for the 120 M they have a lot of nice and shiny things. You have a point : Xtract was broke before Evans took over and right now, does not have a lot of cash on the balance sheet.  While it it is

[Golden100]

I can accept your analogy although I may not totally agree with everything you said. Nonetheless well thought out and worthy of a thumbs up. 

[Baxbax]

Valid points and more or less sums up my thinking too. The set back on earnings was indeed set back regarding those warrants we need at some nearish future. Ofc market surprising events are more than welcome now to cover, while waiting for oneG impact. The magnitude of the impact is really difficult to estimate. Are customers going all in and so. I hope to see more evidence about the supposed

[Revenant]

Sorry, was talking strictly SP.

[IanGan]

I hold a significant amount of Xtract shares. Probably more shares than I should but have held and added over the past 5 years. The total lack of new sales in this past quarter is more than just a little frustrating. We were told Smart Gateway was a game changer because it could detect knives while the competition did a poor job at it. We should have been able to close a lot of deals on that alone

[Pliskenlives]

@Ian 100% correct.. the decision Evans was making just didn't make any sense..  I mean the shareholders were begging him to go into other markets.. and advertise...BEGGING.. but no.. it's sports Arenas .. it's like look.. this guy is not CEO material.. product development maybe.. but.. Chief Executive Officer?? no.. no freakin way..

[Revenant]

Well said, Ian Gan. Yes. Smart Gateway and its ability to detect knives was the tech advance that differentiated us from Evolv. Sometimes you forget all the missed opportunities this company has had. Marketed properly, with comparative fact sheets in contrast with Evolv, that would have been a huge opportunity to really make a splash. But Evans opted for the "let the quality speak for

[Revenant]

I guess this is another incarnation of the same paid basher, Golden?

[Golden100]

Funny listening to these armchair CEOs. You're a joke. You have absolutely no knowledge of the challenges or workings of this company. You only speculate and draw conclusions based on anger and frustration. You have no qualifications to back up your assumptions or should I say manipulative comments. Nobody on this board has anymore of a clue than anyone else. Place your bets folks. Will you

[Engadged]

Hey Goldie, You also have no knowledge so who's to say your assumptions (that so far have failed every time) are any better?  Or perhaps you know exactly what's going on because you work for PE? Narcissism is off the charts here

[Golden100]

  I just said nobody has anymore of a clue about the inner workings of this company including me  But if I am going to listen to anyone it will be from the company and not from a bunch of know nothing bullies on a bullboard.  

[Golden100]

Also quit trying to peg me as someone working for this company. That's just dumb. I am a long term investors working for me. Grow up. 

[Revenant]

So it's dumb to call you an employee, but brilliant to say everyone on this board is a single, paid basher? Oh, wait, we are armchair quarterbacks now, not a paid basher puppet master... Make up your mind. And I was logged off, so I saw this foolishness and couldn't resist...

[Golden100]

There you go again. Putting words in my mouth. At no time did I say everyone on this board is a paid basher.  Now thats just dumb. You see now that's what a paid basher does. Make up lies and try to discredit anyone that questions their deceptive tactics. And don't pretend your not listening to what I have to say. You are constantly lurking in the background looking for ways to spew

[Revenant]

Give yourself some credit, golden, you came up with that emotional, contradictory word salad all by yourself. Stick with one narrative, lose the histrionic crybaby attitude, and maybe you'd get a shred of credibility on this board.

[Revenant]

Wait, let me guess... "no, YOU are"...

[Golden100]

Please put me on ignore.

[TedOrlowski]

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