XTClave and XTAtlas both have large global addressable markets which gives the company blue sky potential upon becoming successfully commercialised. Each XTClave machine is expected to cost between US$2-3m and could be producing up to US$20m in revenues per machine per year when at full production. There are already about 15 potential customers that are in the sales pipeline of XTClave that are going through various stages of testing.
XTAtlas is a unique piece of drone software that is made possible by rolling together 3 pieces of technology. It has also already received its first international sales. Like all software, its important to start receiving sales because that proves that there is real market demand for the problem its solving.
XTEK have been generating some significant revenues driven primarily by the supply and maintenance of drones to the ADF. The drones that XTEK supplies are called AE Aerovironment WASPS. XTEK have the only repair facility for AE Aerivornment WASPS outside of the U.S. Because of that they are likely to continue maintaining these drones, which in turn could mean more contracted revenue in the future.
The acquisition of HighCom was highly complimentary and also came at an attractive price of being a 2.6x EV/EBITDA multiple. HighCom can also serve as a launchpad of the commercialisation of XTClave into the lucrative U.S. body armour market.
Key risks include, but are not limited to, the risk that XTClave is not able to be commercialised to its full potential, and the possibility that Xtek are unable to maintain its profitability in future years ahead as it has done for the previous 3 financial years.
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