Current Report Filing (8-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 9, 2015

XTERA COMMUNICATIONS, INC.

(Exact name of Registrant as Specified in Its Charter)

Delaware	001-37617	38-3394611
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

500 West Bethany Drive, Suite 100 Allen, TX		75013
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (972) 649-5000

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On December 9, 2015, Xtera Communications, Inc. ("the Company") issued a press release announcing its financial results for its fourth quarter and fiscal year ended September 30, 2015. A copy of the Company’s press release is furnished hereto as Exhibit 99.1.

The information in this Current Report under Item 2.02 and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any filing pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by the specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits:

Exhibit Number		Description
Exhibit 99.1		Press Release dated December 9, 2015, issued by Xtera Communications, Inc, reporting its results of operations for its fourth quarter and fiscal year ended September 30, 2015.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Xtera Communications, Inc.

Date: December 9, 2015	By:	/s/ Paul J. Colan
		Paul J. Colan
		Executive Vice President and Chief Financial Officer

FOR IMMEDIATE RELEASE

Exhibit 99.1

Xtera Announces Fiscal Fourth Quarter and Full Year 2015 Financial Results

DALLAS, TEXAS, USA – (December 9, 2015) – Xtera Communications, Inc. (NASDAQ: XCOM), a provider of high-capacity optical transport solutions, today announced financial results for its fiscal fourth quarter and full year ended September 30, 2015. Revenue for the fourth quarter of fiscal 2015 was $15.0 million, an increase of 132% compared to $6.5 million for the fourth quarter of 2014.

“2015 was a year of significant progress for Xtera as we more than doubled our revenue, successfully demonstrated in a real world network the industry’s highest capacity/longest reach solution at 64 Tbit/s per fiber pair with reach of over 1,500 km, began commercial sales of our Submarine repeater, and strengthened our balance sheet with our IPO last month,” said Jon Hopper, Xtera president and CEO.

The company's net loss for the fiscal fourth quarter of 2015 was $6.6 million, or $5.49 per basic and fully diluted share, compared to a net loss of $15.0 million, or $10.12 per basic and fully diluted share, for the fourth quarter of 2014. Basic and fully diluted net loss per share for the fiscal fourth quarter ended September 30, 2015 and 2014 reflect 1.9 million and 1.8 million common shares outstanding, respectively, and do not include shares issued in conjunction with the company’s initial public offering and the conversion of preferred shares into common shares in November 2015.

Conference Call

In conjunction with this announcement, Xtera will host a conference call to discuss its results at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) on Wednesday, December 9, 2015. Interested parties can listen to a live webcast of the conference call by visiting the Investor Relations section of Xtera’s website at http://ir.xtera.com. Dial in information for the conference call is available by registering at http://dpregister.com/10076293. The conference call and webcast will include forward-looking information. A replay of the conference call will also be available on the Investor Relations section of Xtera’s website at http://ir.xtera.com following the completion of the call.

Continued

About Xtera Communications, Inc.

Xtera Communications, Inc. (NASDAQ: XCOM) is a leading provider of high-capacity, cost-effective optical transport solutions, supporting the high growth in global demand for bandwidth. Xtera sells solutions to telecommunications service providers, content service providers, enterprises and government entities worldwide. Xtera’s proprietary Wise Raman^TM optical amplification technology leads to capacity and reach performance advantages over competitive products. Xtera’s solutions enable cost-effective capacity to meet customers’ bandwidth requirements of today and to support their increasing bandwidth demand fueled by the development of data centers and related cloud-based services.

For more information, visit www.xtera.com, contact info@xtera.com or connect via LinkedIn, Twitter, Facebook and YouTube.

Xtera Communications, Inc.
Condensed Consolidated Statement of Operations
(In thousands, except per share data)
(Unaudited)

	Three Months Ended						Fiscal Year Ended
	September 30,			September 30,			September 30,			September 30,
	2015			2014			2015			2014
Revenue:
Products	$	13,710		$	5,235		$	53,557		$	19,838
Services		1,309			1,242			5,114			5,160
Total revenue		15,019			6,477			58,671			24,998
Cost of revenue
Products		13,671			5,364			46,615			14,242
Services		460			597			2,187			2,323
Total cost of revenue		14,131			5,961			48,802			16,565
Gross profit		888			516			9,869			8,433
Operating expenses
Sales and marketing		1,248			1,089			4,463			5,059
Research and development		2,964			2,825			11,162			11,140
General and administrative		2,007			1,337			6,494			5,903
Goodwill impairment charge		-			9,019			-			9,019
Total operating expenses		6,219			14,270			22,119			31,121
Operating loss		(5,331	)		(13,754	)		(12,250	)		(22,688	)
Other income(expense)		(1,210	)		(1,211	)		(4,329	)		(3,303	)
Loss before income taxes		(6,541	)		(14,965	)		(16,579	)		(25,991	)
Income tax provision		(15	)		(31	)		(53	)		(119	)
Net loss	$	(6,556	)	$	(14,996	)	$	(16,632	)	$	(26,110	)
Preferred dividend		(3,674	)		(3,374	)		(13,684	)		(13,384	)
Net loss available to common stockholders	$	(10,230	)	$	(18,370	)	$	(30,316	)	$	(39,494	)
Loss per common share - basic and diluted	$	(5.49	)	$	(10.12	)	$	(16.59	)	$	(21.77	)
Weighted average shares - basic and diluted		1,864,242			1,814,630			1,827,722			1,814,526

Continued

Xtera Communications, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except par values)
(Unaudited)

	September 30,			September 30,
Assets	2015			2014
Current assets
Cash and cash equivalents	$	1,753		$	1,920
Restricted cash		1,120			1,155
Accounts receivable, net		6,580			7,588
Unbilled receivables		6,119			1,080
Inventories, net		10,540			9,374
Deferred cost		780			595
Prepaid expenses and other current assets		1,185			527
Total current assets		28,077			22,239
Property and equipment, net		3,399			3,463
Restricted cash		152			495
Intangible assets, net		7,554			8,632
Other assets		90			81
Total assets	$	39,272		$	34,910
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	13,589		$	3,307
Accrued compensation and employee benefits		760			784
Deferred revenue		1,058			2,995
Warranty reserve		1,735			978
Notes payable, related party		-			20,934
Current portion of long-term debt		10,707			12,548
Other accrued liabilities		4,966			5,428
Total current liabilities		32,815			46,974
Long-term debt less current portion		2,133			6,129
Other long-term liabilities		631			10
Total liabilities		35,579			53,113
Commitments and contingencies
Stockholders' equity (deficit)
Series A-3 convertible preferred stock, $.001 par value 40,500,000 shares authorized 2015 and 2014: 39,663,482 issued and outstanding		40			40
Series B-3 convertible preferred stock, $.001 par value 39,500,000 shares authorized 2015 and 2014: 38,589,303 issued and outstanding		39			39
Series C-3 convertible preferred stock, $.001 par value 25,000,000 shares authorized 2015 and 2014: 19,081,778 issued and outstanding		19			19
Series D-3 convertible preferred stock, $.001 par value 60,000,000 shares authorized 2015 and 2014: 52,509,212 issued and outstanding		53			53
Series E-3 convertible preferred stock, $.001 par value 120,000,000 shares authorized 2015: 114,679,639 issued and outstanding 2014: 0 issued and outstanding		115			-
Common Stock, $.001 par value 395,000,000 shares authorized 2015: 1,936,056 issued and outstanding 2014: 1,814,630 issued and outstanding		2			2
Additional paid in capital		388,047			350,098
Accumulated deficit		(384,685	)		(368,053	)
Accumulated other comprehensive income(loss), net		63			(401	)
Total stockholders' equity		3,693			(18,203	)
Total liabilities and stockholders' equity	$	39,272		$	34,910

Continued

Xtera Communications, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
	Fiscal Year Ended
	September 30,			September 30,
	2015			2014
Operating activities:
Net loss	$	(16,632	)	$	(26,110	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization		2,687			2,543
Goodwill impairment charge		-			9,019
Provision for inventory obsolescence		1,679			1,100
Provision for bad debts		-			(286	)
Warranty provision		1,062			312
Share-based compensation		38			35
Interest expense		218			253
(Gain) loss on disposition of assets		-			(1,055	)
(Gain) loss on disposition of property and equipment		(9	)		19
Changes in operating assets and liabilities:
Accounts receivable		849			854
Unbilled accounts receivable		(5,039	)		1,914
Inventories		(2,845	)		3,519
Deferred costs		(185	)		314
Prepaid expenses and other assets		(693	)		97
Accounts payable		10,359			(5,945	)
Other accrued liabilities		3,473			2,466
Deferred revenue		(1,917	)		1,673
Net cash used in operating activities		(6,955	)		(9,278	)
Investing activities:
Changes in restricted cash		377			544
Proceeds from disposition of assets		-			1,350
Proceeds from disposition of property and equipment		-			-
Purchases of property and equipment		(1,160	)		(609	)
Net cash provided (used) in investing activities		(783	)		1,285
Financing activities:
Repayments of debt		(35,292	)		(19,736	)
Proceeds from debt		37,535			21,756
Proceeds from issuance of bridge loan		4,800			950
Proceeds from issuance of bridge loan, related party		-			4,150
Payment of capital lease obligations		(18	)		-
Proceeds from issuance of common stock		31			-
Proceeds from stock option exercises		1			-
Net cash provided by financing activities		7,057			7,120
Effect of exchange rate on cash		514			304
Net decrease in cash and cash equivalents		(167	)		(569	)
Cash and cash equivalents at beginning of year		1,920			2,489
Cash and cash equivalents at end of year	$	1,753		$	1,920
Supplemental disclosure of cash flow information
Cash paid for interest	$	1,285		$	1,480
Cash paid for income taxes	$	39		$	24
Noncash investing and financing activities
Issuance of warrants	$	264		$	-
Debt conversion to preferred shares	$	37,730		$	-