YFI.V - The question.


Edgewater Wireless (YFI.V) specializes in high-density WiFi applications. YFI.V's technology mitigates WiFi interference by enabling multiple, concurrent channels of transmit and receive from a single WiFi standards. The company manufactures its own chip set, radio and software.

We initiated coverage on March 2018 with notes in August 2018 and March 2019. Below is an update since:

Mar. 14 - Selected by Global Invacom for Bx-WiFi Partnership. To further development of Broadcast WiFi (“Bx-WiFi”), a technology that enables live, high quality and large-scale event video streaming over a Wi-Fi network.

The breakthrough technology enables simultaneous streaming of uninterrupted audio or video content from multiple sources to thousands of smartphone or tablet devices, all connected to a hotspot in the same venue, such as a concert, conference or sporting fixture.

Mar. 26 - Reports Third Quarter Fiscal 2019 Financial Results. Q3 2019 revenues of $0.18M and backlog ($0.88M) represent an increase in customer diversity including deepened relationships in the Cable Broadband Industry. Net loss totaled $0.81M compared to $0.92M YoY.

Apr. 2 - Appoints New Board Member. Richard Nottenburg, Ph.D - Chairman of Q-Sensi Corp., and also presently serves on the boards of directors of Verint Systems, Inc. (Nasdaq: VRNT) and Sequans Communications SA (NYSE: SQNS).

Apr. 26 - Reports 2018 AGM Results.

May 10 - Announces Private Placement Financing. Non-brokered private placement for up to $1,5M at $0.10 (Warrant 0.20 cents).

May 22 - Launches revolutionary residential Wi-Fi application in collaboration with CableLabs. Targets latency sensitive video and gaming applications in the $12.9B residential Wi-Fi market. Dual Channel Wi-Fi enables one or more downlink-only data channels in addition to a standard bi-directional channel. Dual Channel Wi-Fi unlocks unused spectrum to dramatically improve user experience.

June 14 - Announces Proposed Warrant Extension. Extend the term of 2,28M outstanding share purchase warrants set to expire on June 30, 2019 by two years to June 30, 2021. Each Warrant entitles the holder to purchase one common share in the capital of the Company at a price of $0.375.

June 26 - Closes First Tranche of Private Placement. 11M units at a price of $0.10 per Unit to raise aggregate gross proceeds of $1,100,000, completing parts one and two of the first tranche. Warrant at 0.20 cents. Four members of the board of directors and management participated.

Anticipate closing the second and final tranche on or before July 5th.

July 19 - Edgewater Wireless to Host Webinar With Special Guest. Luther Smith, Director at CableLabs in attendance.

July 24 - WBA Presents an Interview With Edgewater Wireless.

July 29 - Cancels Final Tranche of Private Placement.

July 30 - Attend CableLabs Summer Conference 2019. To demonstrate Wi-Fi Spectrum Slicing, powered by MCSR™, and the emerging Dual Channel Wi-Fi™ application to CableLabs members and technology industry decision-makers .

Aug. 7 - Unveils Revolutionary Dual Channel Wi-Fi™ Code to Opensource. Unveiled Dual Channel Wi-Fi™ software at OpenWrt.

Aug. 22 - Issues Letter to Shareholders - Outlined Enterprise initiatives (i.e. Kroger and Mediacom) as well as, Consumer residential market opportunity with CableLabs. In the Consumer Market- We are now ahead of numerous suppliers in North America and Worldwide with our differentiated offer. In the supply market, there are less than ten significant terminal equipment players – companies like Arris, Technicolor, Hitron, Cisco, Belkin, etc., who are supplied by an even smaller number of silicon (chip) vendors such as Qualcomm, Broadcom, Intel, and others.

Securing licenses to use our patented Wi-Fi Spectrum Slicing approach is one of our milestones and -- depending on negotiations and volumes – could mean earning a royalty for each device/module sold, an upfront fee for past R&D and annual support fees.

Aug. 29 - Reports Fiscal 2019 Financial Results. FY 2019 revenues of $0.42M. Q4 2019 revenues were impacted by a post-packaging yield issue on silicon, which resulted in a supply line disruption. Open orders are held for $0.83M of goods and services to be delivered. Net loss totaled $2,8M for the year compared to $3,8M a year earlier due to operational efficiencies and cost controls

“Fiscal Year 2019 marked a significant transition for the company as we began to establish revenue growth with early Enterprise adopters; while establishing the company as a leader in the next generation of Residential (home) Wi-Fi solutions,” said Andrew Skafel, CEO.

Sept. 5 - Expands into Licensing of Breakthrough IP - Formally launching its Licensing program including access to its breakthrough IP and expertise. Licensing Wi-Fi Spectrum Slicing to established chip vendors with massive residential market share.

YFI.V's patented approach and expertise will enable silicon manufacturers to implement Wi-Fi Spectrum Slicing on their platforms, dramatically reducing time to market for the next phase of residential Wi-Fi innovation - high-density capacity.

Sept. 30 - Attend WBA Wireless Global Congress in Frankfurt

YFI.V's valuation moved on a downtrend until late July and has been volatile since ranging from $0.075 to $0.145 cents. Overall, key highlights were reported improved earnings for FY 2019, a new Entreprise partnership (Global Invacom), a new Board Member, a new initiative with CableLabs (Dual Channel Wi-fi) targeting the residential market, as well as, an official expansion of its Licensing Program. YFI.V also raised $1.1M - off its $1.5M target - at $0.10 with warrant $0.20 cents. A lower amount than its previous round in 2018 ($1.8M at $0.16 - warrant $0.24 cents) but with better terms.

Of note, among the many achievements, the new board member is also listed as an Executive Partner at a Private Equity: OceanSound Partners.

Also, aside from election results, key takeaways from the AGM release included a "path forward" of three items.

-Applications to drive adoption of MCSR™ chipsets

-Residential opportunities

-Design-ins for MCSR™ chipsets and silicon solutions.

While Dual Chanel Wi-fi has received significant media coverage, the Design-ins item should also be highlighted. In a letter to shareholders (Aug. 22):

In the Consumer Market- We are now ahead of numerous suppliers in North America and Worldwide with our differentiated offer. In the supply market, there are less than ten significant terminal equipment players – companies like Arris, Technicolor, Hitron, Cisco, Belkin, etc., who are supplied by an even smaller number of silicon (chip) vendors such as Qualcomm, Broadcom, Intel, and others.

Securing licenses to use our patented Wi-Fi Spectrum Slicing approach is one of our milestones and -- depending on negotiations and volumes – could mean earning a royalty for each device/module sold, an upfront fee for past R&D and annual support fees.

The recent release (Licensing Program Launch - Sept 5) certainly moved the market. The downward trend since appears correlated to TSX.V index along with the fact that the company Q1 results (filed September 30th without a press release) were not in line with expectations. The MD&A states:

- Q1 2020 revenues of $0, represents a significant decrease over the same quarter a year earlier.

-A post-packaging silicon chip yield issue and resulting supply line disruption impacted revenue for the quarter. We have implemented and are testing process improvements and anticipate resuming limited shipping in 8 to 10 weeks, prior to a full production solution being developed to fulfil both todays orders and anticipated growth. Both are subject to new capital investment.

-The updated chip design and full production solution is in process. We anticipate, subject to funding, that these new chips could be delivered in 6 to 9 months and permit a resumption in the ramping of our product revenue. We continue to hold open orders for $839,873 of goods and services to be delivered. These are open orders with no fixed terms for delivery or associated financial penalties.

The eight to ten week period mentioned in Q1 2020 (ended July 31) was also reported in Q4 2019. Assuming a Q1 2020 start date, this period should be ending soon but will likely impact Q2 2020. Within this context, the Licensing Program launch make sense and its success will be instrumental.

Will YFI.V capitalize on the improved visibility from its Dual Channel Wi-Fi initiative through its Licensing Program? Indeed, that's the question.

DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The content of rally is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions - rally cannot take responsibility for your investment decisions.


77 views