InterCloud Systems (OTCMKTS:ICLD) has taken some bold steps in order to refocus and restructure the company. First off, ICLD just transitioned from the NASDAQ to the OTC-QX exchange and embarked on a game-changing plan to reduce costs, as well as restructure the Company and significantly reduce the debt on its balance sheet. In that regard, ICLD announced that it has eliminated more than $14.1 million of debt from its balance sheet, as well as all derivative liabilities associated with that debt. Will these steps propel the stock from its present price of $0.10 and back to last years levels of over $2? If you read the roadmap that follows, I think you'll see which direction the stock is headed.
Mark Munro, Chairman and CEO of InterCloud, stated, “We have undertaken measures to reduce our operating expenditures, restructure our debt, and divest ourselves of non-core assets. Just this week we eliminated over $14.1 Million in debt from our balance sheet, as well as cash interest payments and derivative liabilities associated with that debt. In order to further these debt restructuring efforts, the Board of Directors determined that it would be more prudent to continue our public listing on the OTC-QX rather than on NASDAQ, in order to take advantage of increased flexibility in effectuating the aforementioned restructuring, as well as postpone the shareholder approved reverse-split. We believe that this is the start of our efforts to substantially de-leverage the Company and become cash flow positive as we grow our industry disruptive Software Defined Networking and Network Function Virtualization services and solutions.”
First a little background on ICLD. They are a global single-source provider of value-added services for both corporate enterprises and service providers. They offer cloud and managed services, professional consulting services and voice, data and optical solutions. InterCloud's cloud solutions offer enterprise and service-provider customers the opportunity to adopt an operational expense model by outsourcing cloud deployment and management to InterCloud rather than the capital expense model that has dominated in recent decades in IT infrastructure management. Their customers include such giants as Juniper Networks, Microsoft, Ciena, Avaya, Cisco, Citrix and Amazon Web Services.In November 2015, ICLD announced it ranked number 38 on Deloitte’s Technology Fast 500™, a ranking of the 500 fastest growing technology, media, telecommunications, life sciences and energy tech companies in North America. InterCloud grew 2,611% during this period.
Mark Munro, Chairman and CEO of InterCloud, stated, "I recently discussed during our third quarter earnings conference call the revenues and profit growth our Company has achieved year over year. We will continue to grow as we develop leading edge cloud technology products and managed services."Mark Munro added, "as the technology landscape migrates towards Software Defined Networks (SDN) and Network Function Virtualization (NFV), InterCloud’s proprietary NFVgrid, designed to manage virtual network functions powerful analytics will become an industry staple. InterCloud’s DPoD, a hyper-converged private/hybrid cloud solution leverages Juniper Networks Contrail Networking to allow us to build an open solution with scale, security and performance our customers expect."
On August 4, 2016, ICLD announced that it was recently awarded over $6.0 million in new contracts and purchase orders for professional services, network services and maintenance for new and existing customers. A majority of the work is expected to begin immediately.
Mark Munro, CEO of InterCloud Systems stated: "InterCloud continues to grow revenue and build a backlog. We are confident our recent rapid growth around SDN and virtual network function validation services will continue to offer InterCloud exciting new opportunities. While we grow our revenues, we are also exploring means to enhance shareholder value through the divestment of non-critical assets as well as the restructuring of balance sheet liabilities."
On September 8, 2016, ICLD announced that it was recently awarded over $2.6 million in new contracts for professional services for new and existing customers. A majority of the work is expected to begin immediately.
Mark Munro, CEO of InterCloud Systems stated on that date: "We announced last week that we have undertaken measures to reduce our operating expenditures, restructure our debt, and divest ourselves of non-core assets. Notwithstanding these cost cutting measures, we continue to drive revenue from legacy IT services as well as new cloud services. InterCloud continues to build revenue from a significant pipeline of potential new business. We are receiving new contracts from some of the world’s largest service providers and enterprise customers and providing solutions as they transition from legacy IT hardware to virtualized networking services. We believe that our cost cutting measures and continued debt reduction will enable the Company to achieve positive and sustainable net income in the near future."
It's great that ICLD has experienced such phenomenal growth but it needs to watch its finances a little more carefully. That's the predominant reason the stock has traded down, but now we the financial restructuring in place. After eliminating over $14.1 Million in debt from its balance sheet, as well as the cash interest payments and derivative liabilities associated with the debt, ICLD is poised to move higher in our opinion.Currently trading with a meager market cap of $4.1 million, ICLD is an exciting story among small caps considering they're pulling in more revenues from a single contract than its current market cap. Management knows where the stock is headed as there have been significant insider purchases. On September 6, 2016, CEO and Chairman Mark Munro and Director Mark Durfee reported that they both purchased 89,286 and 100,000 shares of the stock on September 1st and September 2nd, respectively. 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.
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