Volume and price action has been picking up once again for InterCloud Systems Inc (OTCMKTS:ICLD), a stock which saw a mammoth run on the chart earlier this spring, when it traded up from .01 to .0869 for a 769% swing.
It has been a few weeks since we last touched upon ICLD, which provides cloud and managed services, professional consulting services and voice, as well as data and optical solutions. At that point, not much had happened since the month prior to that, when the company announced new contracts expected to be worth over two million dollars.
However, InterCloud Systems Inc (OTCMKTS:ICLD) recently announced a couple of new updates, the first of which being the sale of a majority interest in its AW Solutions, Inc. subsidiary. AW Solutions provided DAS and WiFi engineering services. Under the terms of this asset sale, InterCloud will receive a $2.0 million convertible note in the new company, an additional working capital adjustment in 60 days and a potential earnout after six months. In addition, InterCloud will retain a 19.9% ownership interest in the new company.
Mark Munro, CEO of InterCloud stated, “The sale of this business asset is a continued attempt to realign InterCloud’s business units around profitable higher margin work. The AW Solutions sale has given InterCloud the opportunity to continue to improve our P&L and balance sheet. InterCloud is exploring the sale of other non-core assets as well. This reorganization is providing us the changes necessary to attract conventional asset based lending solutions in order to fuel growth in our core areas.” (Source: OTC Disclosure & News Service)
Also occurring recently was ICLD’s filing of a lawsuit against Grant Thornton in New York Supreme Court for breach of contract as well as fraudulent inducement in connection with their engagement as the auditors of the Company in 2015.
Mark Munro, CEO of InterCloud stated, “It is the Company’s position that Grant Thornton breached its obligations to the Company and the result thereof was a domino effect which included the delisting of InterCloud from the NASDAQ. The Company and its shareholders have been damaged by Grant Thornton’s conduct and redress is being sought accordingly.” (Source: OTC Disclosure & News Service)
The company hasn’t made it clear whether uplisting back to the NASDAQ is an immediate priority, or the steps it would take to do so. ICLD is certainly in an attractive space. The cloud computing industry is a behemoth which, depending on who you ask, is on track to be anywhere from a 120 to 240 billion dollar business in 2017. Taking the growth rate trends into account, and barring any mass technological changes or breakthroughs, and one could reasonably assume that cloud computing could be a half trillion dollar market inside of the next decade.
The company has also reported reductions in long-term debt and operating expenses along with positive year-over-year revenue growth, which doesn’t even include the million dollar contracts we mentioned previously.
All in all, we continue to believe that ICLD has an interesting story to follow, and as we do so, you can follow right along with us. How you can do that is really easy. Stay locked to Street Register for updates, and we’ll be sure to deliver important developments on ICLD should anything come along. In the meantime, if you’ve yet to sign up for our 100% free newsletter, we would highly suggest that you do so now! Just enter your active email address into the box below and submit!
Disclosure: No one at Street Register has been compensated in any way for the publishing of this article, nor do we hold any position in ICLD stock, short or long.