InterCloud Systems Inc (OTCMKTS:ICLD) Could Be About To Reverse

InterCloud Systems Inc (OTCMKTS:ICLD) has had a rough 2016. The company opened the year hovering around $1 a share, and between January and June dipped and spiked back above the dollar threshold three times. The latter half of the year has seen nothing but depreciation, however, and the company currently goes for just $0.05 a share – a 95% decline across the five-month period.Recent action suggests the company may be bottoming out, however, with a number of recent developments hitting press, and a sharp increase in volume against the trailing three-month average.What's next? Let's take a look.For those not familiar with the company, here's a quick introduction. Taken directly from its self billed bio, InterCloud provides end-to-end IT and network solutions to the telecommunications service provider and corporate enterprise markets through cloud platforms and professional services in the United States and internationally. Now, we're of the view that this technology related bios can be pretty tough to interpret sometimes, so we'll just sum it up as follows: it's essentially a hosting company, that also provides data management and software as a service through the cloud that underpins its hosting technology. If a company wants to shift its data from a physical, on site, server, to the cloud, it can do so through InterCloud. If it wants cloud to analyze the data that runs to and from this server, and optimize it or package it in any way, it can do so through InterCloud. It's software as a service systems basically allow companies to sign up, and offer access to various applications (Microsoft Exchange, Sharepoint etc.) via the cloud, without having to buy its own license and distribute it through its own network.So, with that cleared up, what's happened lately to suggest a turnaround?The company released its latest financials early November, and the numbers look good. Revenue for the nine months ended September 30, 2016 increased by 8% to $59.8 million, compared to $55.4 million for 2015. Net loss hit $(15.7) million for the nine months ended September 30, 2016 compared to $(27.7) million for the same period in 2015. The topline is increasing, and the bottom line is tightening towards the black.Since then, we've also seen two major contract awards, which look set to keep the above mentioned numbers moving on the path towards profitability. The first is a $2.0 million in professional service contracts to support next generation Wi-Fi and DAS network deployments from new and existing clients. It's a backlog based contract, and it shows that the forecast backlog is still serviceable. That's a major point in our books. The second relates to $1.0 million in new contracts for professional and managed services in connection with next generation network services for new and existing customers.So business generation looks good, top and bottom line are moving the right way – what about balance sheet?Well, this is where investors might have some concerns, but again, we don't think they warrant a shift in sentiment. Short and long debt totals out at around $30 million, and there are about $8 million of further liabilities on the books. Cash at September 30 came in at $2.6 million, but receivables of a little over $18 million boosts this number a bit. Plus, the company sold $1 million of these receivables for $950K earlier this month, so add that to cash and we're looking at around $3.5 million cash on hand.Chances are we're going to see some dilution, primarily because this sort of operation can be infrastructure heavy, and to meet demand InterCloud is going to need to step up its operational framework. That said, if the company can maintain topline growth and continue to offset debt, we think there's a good chance of a medium term recovery in its market capitalization.We will be updating our subscribers as soon as we know more. For the latest updates on ICLD, sign up below!Disclosure: We have no position in ICLD and have not been compensated for this article.