If you base the CR datesolely on the amount of cash WBT has,...

If you base the CR datesolely on the amount of cash WBT has, then I think a late Q2 or early Q3 datemakes sense. This is because the cash and cash equivalents at the start ofthis current quarter are $3,376,000 and the expected outflowsare $1,269,000. That means at the end of this quarter they are expected to have$2,107,000. I think a reasonable assumption is that the actual outflows forthis and the next quarter will be around $1.2-1.5 million which leads to theneed for a CR date around late Q2 or early Q3. I think Q3 and Q4 will have larger expenses than Q1 and Q2.

Some possible things thatmight delay the need for a CR are:

1. R&D rebates

Theyhave mentioned before thatfor payments to CEA-Leti for R&D collaboration, 60% of the cost is rebatedthe following year under French government tax concessions.

Forthe quarter ended 31 December, outflows included$2,353,000 inresearch and development expenses which is more than twice the amount for thewhole twelve months ended June 30, 2018 (which was $1,079,476). Ibelieve that these expenses were larger due to payments that were required tobe made to Leti after the renegotiation ofthe contract.  As of 30 June 2018, theGroup had the following contracted future payments to Leti. $666,772 within oneyear and $2,156,344 in greater than one year. I expect that most of thesepayments have now been made which means that the R&D costs for futurequarters should be a lot smaller and that there should also be a significantamount returned to WBT from R&D rebates.

2. Options

Theestimate for a CR based solely on the amount cash they have is around late Q2 or early Q3. This is fairly close to the date on which alarge amount of options expire.

Ifthe market cap of Weebit increases, there are the below options which could be exercised (numbers arebefore consolidation).

-Expiry: 1 August 2019

-Exercise price $0.0625

-Number of shares under option: 50,000,000

-Total cost to exercise options: $3,125,000

 

-Expiry: 30 June 2020

-Exercise price: $0.03

-Number of shares under option: 49,427,400

-Total cost to exercise options: $1,482,822

 

-Expiry: 1 October 2027

-Exercise price: $0.01755

-Number of shares under option: 38,000,000

-Total cost to exercise options: $666,900

3. NRE

Although Coby’s comments to Trojanmonkey, IMO don’t make it seem like collaborationagreements are imminent. It is possible that one or a few couldbe made before it comes to the point when WBT needs to do a CR. 

Coby’scomments

“Wehave many discussions going on with strategic partners and someare in more advanced stages than others. We still don’t know if/what wewill be able to announce in the near future, as there are many parametersinfluencing this which are not under our control.“

 

Somepossible reasons for an earlier CR date like late Q2 to early Q3:

 1 Larger thanexpected expenses.

For 2019 they are working on:

-Quarter 1. Process optimisation - baseline improvement to achieve robusttechnology parameters

-Quarter 4. 28nm/300nm integration - state of the art embedded readiness

2Seeds continue selling and share price remains low which causes the options to end up expiring before they canbe exercised.

Itseems likely to me that the seed shareholders will continue selling. 

In Coby’s comments to Trojanmonkey,it was mentioned that WBT are attempting to find a way to alleviate the sellingpressure from the seed holders 

Coby'scomments:

"Wehave been very active in finding new investors to take up the stock that iscoming onto the market. [...] We are currently undertaking numerousinitiatives to cover for any additional selling down, including speaking withlocal institutional investors and family offices, as well as offshore investorsand potential strategic investors. While we have no way of knowing whetheradditional stock will come onto the market post the escrow date, we are puttingin place a number of strategies to be ready for this. I trustthis has provided you with some comfort knowing that this issue is beingdiscussed and dealt with at the board level. "

Unfortunately, the seed shareholders have plenty more shares to sell (I believe around 6,800,000 post-consolidation or 170,000,000 pre-consolidation), so it's likely the selling pressure will still be there for a while. The shares coming out of escrow at the end of this month will also probably add to this selling pressure.

Below are the shares we know the seed shareholders have sold from change in substantial holding announcements (assuming 5c as the buy price) All below numbers are in pre-consolidation values

04/03/19 Ariel Malik 16,621,100 – avg price 0.02408 - $400,236.09 – shares owned 107,610,182 to 90,989,082– voting power 6.76% to 5.72% - cgt loss $430,818.91

22/01/19 – Ariel Malik 18,662,516- avg price 0.0288 - $537,480.46 - shares owned 126,272,698 to 107,610,182 - voting power 8.2% to 6.76% - cgt loss $395,645.34

26/10/18 - Ariel Malik 15,318,896- avg price 0.0384 - $588,245.61 - shares owned 141,591,594 to 126,272,698 - voting power 9.9% to 8.2% - cgt loss $177,699.19

27/02/19 - Amiram Bornstein (Notice of ceasing to be a substantial holder) 14,121,100- avg price 0.02944 - $415,725.18 – shares owned 93,373,302 to 79,252,202– voting power 5.87% to less than 5% - cgt loss $290,329.82

09/01/19 – Amiram Bornstein 16,759,804- avg price 0.0255 - $427,375.00 - shares owned 110,133,106 to 93,373,302 - voting power 6.98% to 5.87% - cgt loss $410,615.20

05/12/18 – Amiram Bornstein 14,877,893- avg price 0.0293 - $435,922.26 - shares owned 125,010,999 to 110,133,106 - voting power 8.1% to 6.98% - cgt loss $307,972.39

23/10/18 – Amiram Bornstein 16,580,595- avg price 0.0383 - $635,036.79 - shares owned 141,591,594 to 125,010,999 - voting power 9.9% to 8.1% - cgt loss $193,992.96

Ariel Malik - total $ amount $1,125,726.07 - total cgt loss $1,004,163.44

Amiram Bornstein - total $ amount $1,525,962.16- total cgt loss $1,202,910.37

3. Cooperation agreement with a key industry player doesn't happen

It's a bit disappointing that this hasn't happened yet given that it was planned for Q4 2018.

I think with WBT's tech, management, connections and now a clean share register this should happen before a CR is needed, but it is possible it doesn't.