Inventergy Global Inc (NASDAQ:INVT)
Inventergy Global Inc (NASDAQ:INVT) has completed the restructuring of its debt, marking yet another a milestone that CEO, Joe Beyers, says allows them to focus on new opportunities for growth. The signing of a restructuring agreement with a senior lender is part of an ongoing transformation that the company is using as it continues to explore ways of trimming losses from operations.
Debt Restructuring Milestone
The restructuring also allows the intellectual property company to reduce its operating expenses by $1.3 million. Inventergy Global Inc (NASDAQ:INVT) has since assigned 740 telecommunications patents to INVT SPE LLC as part of the debt restructuring agreement.
“We are excited by the prospect of sharing in future net monetization revenues from the patents held by INVT SPE LLC. This revenue share, our significantly reduced cash burn rate, and the opportunities for our Inventergy Innovations business will enable us to increase value for our stockholders,” said Mr. Beyers
Giving INVT SPE LLC rights to 740 patents, however, raises serious concerns about the long-term prospects for Inventergy Global. The fact that the lender has the sole discretion to make decisions on how the patent are used means the company won’t be in control of ensuring maximum value is generated from the patents. The company also won’t have a say on the lender’s choice of licensing or selling the patents.
Tanking Revenues Widening Net loss
Inventergy Global Inc (NASDAQ:INVT) is in dire need of new avenues of revenue having seen its 2016 full year revenues tank to $1.77 million from highs of $4.9 million in 2015. While collateralizing over 750 patents was inevitable if the company was to restructure its debt, this also renders it powerless in its bid to shore up the current revenue base even with a cash-sharing agreement.
Inventergy Global Inc (NASDAQ:INVT)’s operating expenses are still quite high at $7.99 million even after dropping by 22% last year from $10.2 million in 2015. It now awaits to be seen how the company plans to increase value to shareholders after the spinning off of 740 valuable telecommunications patents.
The Silicon Valley, CA-based intellectual property company has no option other than moving with speed to license its current patented technologies if it is to shore up earnings. Relying on INVT SPE LLC to generate shareholder value may not be enough given the current debt burden and net losses that run into millions of dollars.
Inventergy Global Inc (NASDAQ:INVT) stock came to life in Friday’s trading session, rallying by 38.30% to end the day at $0.260 a share. The stock is currently trading in a tight range between $0.19 and $0.28 a share with a 52-week high of $0.28 a share and a low of $0.19 a share.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.