The volatile share of Ability (Nasdaq: ABIL; TASE: ABIL) has done it again. Its price skyrocketed 96.8% on Nasdaq yesterday. In contrast to the previous jumps in its share price several months ago, the explanation this time is a report that the company has acquired full control of its activity.
Ability's share price is down 14% on the TASE today, after soaring 96.5% yesterday. Last June, with no apparent reason, Ability's share price rose from $2 to $12 on Nasdaq, then went right back down. The share closed at $2.80 on Tuesday and yesterday at $5.55, reflecting an $18 million market cap. The company's share has lost 95% of its value since being listed on the TASE in early 2016.
Ability, managed by co-founder and CEO Anatoly Hurgin, provides intelligence technologies to government and military agencies. The company reported yesterday that it had signed an agreement to acquire the company which provides its principal cellular interception system, Ultimate Interception (ULIN). This technology, which facilitates interception of communications and remote eavesdropping, is designed for government agencies. In the past three years, Ability has paid 50% of its revenue from this technology to the company it has now acquired; from now on, it will fully recognize revenue from the technology.
Ability will buy all of the company's shares with its own shares. It will issue 355,000 new shares, with a value of $1 million at the time of the report (before yesterday's surge); when the deal is completed, the sellers will hold 9.7% of Ability's share capital. At the same time, Ability will give the sellers three warrants, each for 100,000 shares, with a $3.81 strike price, which is lower than the current price. The maturity date for the first warrant is one year and 30 days after the deal is completed, the next is one year after that, and the third is one year after that.
In addition to the shares and options, Ability estimates the annual operating expenses of the acquired activity at $750,000.
Published by Globes, Israel business news - en.globes.co.il - on November 22, 2018
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