Ubiquitech Software Corp (OTCMKTS:UBQU) Gets A Closer Look

On our previous article, which you can read here, Ubiquitech Software Corp (OTCMKTS:UBQU) communicated that the company was changing its name to Endo BioSciences Inc. With that in mind, we wanted to further investigate what has been happening with this company since the share price went in period of three months from $0.01 to $0.02. Take a look at it:

Source

Will the business model be the same?

According to the business communication that we received, the company will continue to own HempLife Today ("HempLife"), which is its main subsidiary. The business model will continue to be the same. If you do not want to read the entire press release, here is the portion of the text that states it:

"While the Company will continue its primary focus on HempLife Today™ and the continuing growth of the Hemp CBD (Cannabidiol) industry, with this new name the company has more options in the future as more is learned about the medical value of cannabis and its many applications."

So, what is making the share price move?

The company may have released several business communications that made the share price react. We investigated further and we found the following.

Firstly, on March 24, 2017, HempLife announced the development of a new IVR, an Interactive Voice Response, which will provide 24 hour toll-free customer support phone system to the customers of the company. According to the company, this system was developed in order to provide its customers an easier way to understand the products. In addition, the new IVR system will offer the customers the possibility of talking to a product specialist directly.

James Ballas, the CEO of the company, commented the following about the new IVR:

"With the volume of customers we are currently getting, and the volume we are going to increase to, it was time for us to create this new phone system,Customer service is the cornerstone of our success, along with our superior products, and we want our customers to have a number they can call 24 hours a day to get the information they need so that we are always serving our customers' needs. This is just one more area where we continue to excel, and this new system will increase our sales and add to our bottom line." Source

In addition, Luke Dreyer, head of operations, added some comments as well:

"With our new IVR system our customers will have all of the necessary information about our company and products at their fingertips 24 hours a day, This will take pressure off of our live representatives and give them more time to spend with each customer, creating a better customer satisfaction and sales opportunity." Source

The press released noted that the new system was expected to be working by Friday, March 31st. So, it should be in place already. It was noted that customers could have access to this service by calling at 1.800.655.9547.

In addition, on March 23, 2017, Ubiquitech Software released its 2017 revenue guidance in a communication that you can find here. According to that document, the company anticipated that its revenue could increase over 55% in the next year. These results are based on the strong internal first quarter numbers that Ubiquitech is experiencing. That may also be the reason to explain the uptrend that we have seen in the stock chart recently.

We believe that these results are extraordinary. Also, we agree with the opinion of the CEO, James Ballas, who made the following comments about the progress of the company:

"We are very pleased with the progress we have made and we will continue to do everything within our power to keep our company relevant and growing. With the quality of our products, our marketing, customer support and satisfaction, and our dynamic thinking, we will continue this growth through 2017 and into 2018, which we are already planning big things for, and this is the thinking that will take our revenues to even higher gains as we continue. It's a very exciting industry and we don't plan to stop until the CannazALL brand is a household word." Source

Why is the share price so low?

Balance sheet and shares

We investigated why the company shares are trading with such a low price. We checked the last annual report released by the company, which we could find here. The company balance sheet showed the following amount of assets as of November 30, 2015 (the most important lines):

• Cash: $105,817
• Inventory: $212,836
• Total Current Assets: $318,653
• Goodwill: $320,835
• Total Assets: $723,128

The most important liabilities included follows:

• Long-term debt: $672,266
• Total liabilities: $713,274

The rest is shareholders equity, which is divided mainly in common stock, preferred stock, and accumulated deficit.

Only by looking at the amount of goodwill that the balance sheet shows, we may say that the company acquired other businesses in the past and the management expects them to deliver future cash flows. Maybe, the share price is so low, because the investors doubt that the company could obtain much more revenues from these previous acquisitions. In addition, investors need to know that the amount of liabilities is also quite large and shareholders may also be discounting the risk that this amount of leverage involves. You know how it works with highly leveraged companies; you sometimes make tons of money and sometimes you may lose all your investment.

We could not find a lot of information about the type of securities that the company issued. Thus, we could not assess properly the potential dilution of the shares. For this reason, we encourage investors to contact their financial advisor or subscribe our newsletter in order to obtain more information in real time about this company and its capital raising operations.

Conclusion

Ubiquitech and its main subsidiary, HempLife, is delivering news that investors seem to appreciate since the share price has been on an uptrend. If the company is able to keep delivering good results and follows its revenue guidance, we do not see why the share price should stop climbing. However, investors need to keep in mind that an investment in this company involves risks and this post should be the beginning of their investment research. For more information, remember that we will be updating our subscribers as soon as we know more. For the latest updates on UBQU, sign up below!

Disclosure: We have no position in UBQU and have not been compensated for this article.