Ability Inc (NASDAQ:ABIL) announced about a week ago that its directors and founders had struck a deal for a line of credit repayment as well as equity conversion.
The deal which was announced on December 28 last year revealed that Alexander Aurovsky and Anatoly Hurgin entered the agreement with the firm. The two are Ability founders as well as directors and the outstanding credit line involved as part of the deal is roughly $1.5 million. The amount was secured through Messrs funds. The two directors will receive payment which will then be converted into equity.
An Israeli commercial bank provided the outstanding $1.5 million line of credit. Hurgin and Aurovsky will transfer the amount that will be used to repay the credit facility as part of the deal. Ability will, in return, issue a private equity placement to the two founders, thus the equity conversion.
Hurgin and Aurovsky will receive 226,426 ordinary shares and a purchasing option for 226,426 ordinary shares. This means that the total will amount to 452,852 ordinary shares which will be issued at $3.25 per share. This conversion price was the same closing price of the stock during the recently concluded public offering.
The warrants allow the two founders to sell the ordinary shares at a $3.25 per share. The offer may, however, be adjusted based on various circumstances and it has a five-year expiry from the issuance date. The deal is expected to come to a close on January 3.
Ability’s stock performance
Ability’s stock closed 2018 on a positive note after a 14.12% gain on Friday which was the last trading session in 2018. The stock closed the session at $2.02 and its trading volume for the session was 9920131 shares which were higher than the 867.13k average volume.
The stock price at the time of this press was $ 1.95 while 52-week high is 14.55 and its 52-week low is 1.54. This means that the stock price is currently underperforming since it is very close to the 52-week low. Its market capitalization currently stands at $10.62 million. It has not been an impressive 12 months as far as Ability’s performance is concerned.
The stock’s monthly volatility level is 11.97% while weekly volatility is 21.01%. As far as the earnings expectations are concerned, analysts anticipate a -13.10% earnings growth for 2019. Ability reported a $-2.43 earnings per share for the past 12 months. The price current price consensus estimate from Wall Street analysts is $1.3.
Despite the company’s poor performance in 2018, it has an impressive 544.5% Return on Investment (ROI). A high ROI is a good thing because it means the firm is good at generating profits. The stock seems to have kicked off this week on a positive start. For example, it registered a 2.63% gain in the latest trading session on Wednesday. However, there is no guarantee that it will continue to perform positively. Its performance depends on a variety of factors including management, productivity, and other external factors.
Ability is a global company that deals with field-proven systems for satellite and an off-air interception. It also deals with geo-location. A team of communication and military experts founded the company in 1994. The company’s products are so far only sold to authorized government agencies.
The company’s systems are rolled out for anti-terror, anti-crime, border security, target tracking, reconnaissance, intelligence gathering, airport security, and surveillance. The above list makes the systems particularly appealing to a wide variety of government organizations. They include defense ministries, homeland security organizations, military forces, anti-terror ministries, border control, and national agencies among others.