Ecoark Holdings Inc (OTCMKTS:EARK) Consolidating Before Heading Higher

In our first piece about Ecoark Holdings, Inc. (OTCMKTS: EARK), we noted that the company made several corporate changes to be able to be listed in the NASDAQ Exchange, and it was growing through acquisitions. We considered that these two facts were two very good catalysts, and following the stock news closely may pay off. Hence, this new update, wherein we will assess a new acquisition, and the announcement of the filing of the 10-QT in preparation for NASDAQ uplisting, Have a look at the recent price action, and note the large volume registered recently. It seems that some investors are accumulating stock at the $4 level.SourceRecent DevelopmentsThe most important news regarding what we consider the most relevant catalyst, the NASDAQ uplifting, was put out on May 10, 2017; the filing of the Form 10-QT with the SEC in preparation for uplisting to the NASDAQ Capital Market. This type of SEC Form is nothing else than another version of the traditional 10-Q that companies issue when there is a change of fiscal year end (check it here). It is called a transition report. The market knows it, thus the jump in volume and share price returned some profits to the email subscribers, but it was not dramatic. At the end of the day, the fact that the stock will be traded in NASDAQ was already known. This is only a new step:SourceJay Puchir, CEO of Ecoark, said recently:

“We have made significant progress spanning all areas of the organization and believe the enhancements to our Board of Directors, management team, capital structure and growth opportunities for our overall business, have us well positioned to achieve a NASDAQ uplisting in the near future.” Source

On May 23, 2017, the company put out this press release, wherein it announced the “offering of2,500,000 shares of common stock, at a price per share of $4.00, issued with warrants to purchase 1,875,000 shares of common stock". Dilution risk? Not at this point in time because the warrant's exercise price is $5.50 per share, and the share price in the market is $4.60. Thus, warrant holders will prefer to go to the open market to buy shares at $4.60, instead of doing it at $5.50 by exercising the warrants. If the share price goes to $7, shareholders may get diluted, but we don't think many will complain.Right after the offering, on May 24, 2017, the company released another reason to believe that the company's growth does not stop here. The company completed the acquisition of 440labs, a cloud and mobile software developer, that will collaborate with the company subsidiary Zest Labs. The acquisition will add to the company "the development and runtime operations expertise to help expand the depth and breadth of Zest Fresh deployments". We believe that the integration of 440labs will be easy as both companies have been collaborating for quite some time.

"After years of collaboration, the acquisition of 440labs was an easy decision for our team as we continue to develop the Zest Fresh solution" Source

Additionally, the company seems to be making efforts to merge both teams, as it was said that the CEO of 440labs, Scott Durgin, will be the new CTO of Zest Labs.Financial Condition and ConclusionWe did not note in our last article that the company is in a good financial shape. We took the time to look at the company balance sheet, wherein we appreciated the approximately $8.6 million in cash on hand, approximately $20.2 million in total assets, and the fact that the the amount of liabilities is only $5.4 million. Additionally, the long term debt is very small; approximately $0.6 million. The fact that the company will be able to trade on the NASDAQ will increase the amount of market participants due to the company's strong financial condition.Overall, there are many thing to like with EARK. First, the acquisition of new businesses is increasing both the top and bottom lines. Additionally, the company is financing the transactions with capital increases and the long term debt is close to zero. Thus, the financial risk is very little. Finally, the company could be graduating to NASDAQ soon, which will further boost liquidity and its share price. To sum up, there is a lot to like here. We will be updating our subscribers as soon as we know more. For the latest updates on EARK, sign up below!Disclosure: We have no position in EARK and have not been compensated for this article.