Telco Cuba Inc (OTCMKTS:QBAN), the telecommunications company, put out an update very recently that made the share price run up the charts. More than 150 million shares exchanged hands and the share price went from $0.001 to touch $0.008 in just one day. Given the astonishing returns obtained and the incredible company expectations that we heard, we decided to research a little bit about QBAN. Have a look at the share price action before we get any further.
BusinessOn July 28, 2017, the company put out its most recent quarterly report. The document reads that "Telco Cuba, Inc. offers telecommunication services and equipment, including mobile phones, mobile voice service, and VoIP service.". The brand names being used are “Amgentech”, and “Telco Cuba”. The most significant is that the company operates solely at the moment in The United States of America, but it is positioning itself to enter into the telecommunications market in Cuba, once it will be able to do so. Who is the client? The company targets the Cuban American demographic in the United States with the brand “Telco Cuba” with the following list of advantages.- Plans to offer low cost international rates- International calls at similar or lower rates than competitive landline rates- Direct text messaging and calling to the country of CubaAccording to the company, currently there is no provider of these services targeting the Cuban American demographic. Additionally, it has obtained a license with the FCC "allowing it to directly peer with telephone providers outside of the United States".The new UpdateThe company put out an update, in which it was announced that the company's partner, MicroTech, had been awarded a spot on the $50 Billion 15-year Enterprise Infrastructure Solutions (EIS) Multi-Agency Contract. In our opinion, this fact made the share price rebound recently. Have a look at the share price rebound in the month of August.
In the same press release, we could read that Telco Cuba signed a teaming agreement with MicroTech during the month of November 2015. Under that agreement, QBAN is a sub-contractor of MicroTech. This explains that the good news from MicroTech affects QBAN's share price. This is what the CEO of QBAN, William Sanchez, said:
"Telco Cuba congratulates MicroTech on a job well done. As an initial RFP team member, the potential upside for Telco Cuba is tremendous. With the teaming agreement having run its course, we await further advisement from MicroTech on what the next steps are to continue our relationship with them." Source
Additionally, it was noted that Telco Cuba, Inc. will start the process of changing its name to "Amgentech Holdings, Inc". The change will take some time as FINRA needs to approve the change, but it is a good step, as it is necessary to better handle the finances of the company under current OFAC regulations. Additionally, it was explained that Telco Cuba, Inc. will become a subsidiary of Amgentech Holdings, Inc. and"QBAN" will continue to be the ticker.Financial SituationWe could have a look at the financial situation of the company in the last quarterly report. The amount of total assets is equal to $81,420. It has some cash and a lot of prepaid expenses. Conversely, the total amount of account payables is $166,482 and the company has sold a good amount of notes payable and convertible debentures. The most interesting was hidden in another part of the report. We could see that the public float is quite reduced, which can explain part of the volatility that we have seen in the market:
- Number of Shares Outstanding: 226,871,231
- Number of Shares Authorized: 2,000,000,000
- Public Float: approximately 195,588,041
Attorney LetterOn August 2, 2017, Attorney John T. Root, Jr. put out a letter stating that the company was in compliance with the regulations. The following text is, in our opinion, the most significant part of the letter:
"This information, as filed with OTC, constitutes, in my opinion, adequate current public information concerning the Company’s securities and is available within the meaning of Rule 144(c)(2) under the Securities Act." Source
In addition, in the same letter, we got some information about the company's CEO, which we believe, is interesting:
"Mr. Sanchez has vast experience in the telecom business and IT, both in the United States and in Central and South America. He has shown progressively greater responsibility during his tenure in the industry. The experience of Mr. Sanchez makes him uniquely qualified and experienced in all aspects of the Company and allows him to prepare the financials under his authority as an officer of the company." Source
Stakes in the companyOn July 28, 2017, EMA Financial, LLC, noted that it owned convertible securities that would permit it to acquire 9.9% of the total outstanding shares:
"the Note is convertible is limited, pursuant to the terms of such instruments, to that number of shares of Common Stock which would result in the Reporting Persons having beneficial ownership of 9.9% of the total issued and outstanding shares of Common Stock " Source
We could also read that the CEO owns a large amount of shares of the company. This is very significant, as his interests are completely aligned with shareholders.ConclusionThere are many things to like in Telco Cuba Inc. First of all, the company's partner MicroTech is pursuing big contracts with the help of QBAN and it seems that the collaboration is turning into a great success. A spot on the $50 Billion 15-year Enterprise Infrastructure Solutions (EIS) Multi-Agency Contract is very good proof of it. Additionally, the fact that the CEO is among the largest shareholders is very good news. He truly believes in the company. Finally, it is significantly good that the company is in compliance with the regulations and it is filling its quarterly releases on time. To sum up, the company is making all the right moves and the recent selloff can be seen as a dip buying opportunity.We will be updating our subscribers as soon as we know more. For the latest updates on QBAN, sign up below!Image courtesy of Nick Kenrick via FlickrDisclosure: We have no position in QBAN and have not been compensated for this article.
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