The deal is nuts based on what has been released to market and the fact is that when a coy does an announcement like this, there is always clarity about contribution to underlying revenue and a way to calculate ROI in the market release, which was heavily lacking here.. barely a mention of synergies that would directly result and how this fits into a globally focussed strategy. It looks like for a period of time this is an immediate cash drain with some pretty low ball revenue targets in a period where the coy will need all its funds to focus on the main game which is getting its tech to market and commercialising it. $10M bucks in the bank goes pretty quick in these scenarios no matter who you partner with.. why put yourself in a position of an immediate $2M cash outflow plus another $500k outbound injection into this thing then another $500k in 12 mths time if they dont take the shares (the shares i won't even comment on as thats already been said), being a net outflow of $3M in 12 mths for a potential net revenue targeted at $1.5M. Again, there needs to be real clarity in next weeks Quarterly for this deal to make sense, let alone the points about management effectively outsourcing their own performance targets.
XPE Price at posting:
4.2¢ Sentiment: Buy Disclosure: Held
