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US Highland, Inc. (OTCMKTS:UHLN) Improving Fundamentals Warrants A Higher Share Price

US Highland, Inc. (OTCMKTS:UHLN) Improving Fundamentals Warrants A Higher Share Price
Written by
Jarrod Wesson
Published on
March 23, 2018
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A reversal in the share price may be building around US Highland, Inc. (OTCMKTS:UHLN) after the company agreed to acquire TRU-Food Provision Co. and brought its financials up to date with the SEC. With trading volumes showing signs of increasing, the big question now is whether the stock has what it takes to bounce back from the current lows. We believe that the stock is due for a bounce-back consequent to improving fundamentals. 1 year chart for UHLNThe stock is currently trading at the $0.0015 handle and needs to close above the $0.0020 mark to affirm the emerging bullish trend. On the downside, a close below the $0.0010 mark would be a very bearish sign. However, we believe that downward moves are not likely, as the shares are trading near 52-week lows and the buying pressure seems very significant.Before we look at the fundamentals likely to push the stock up the charts, let us have a look at what UHLN does in pursuit of growth and shareholder value. Website of Us Highlands Inc - US Highland, Inc. Common Stock OTCMKTS: UHLNUS Highlands, founded in 2009, is headquartered in Atlanta. The company is a franchise development company running and representing franchises in the U.S. and abroad. UHLN looks for brands exhibiting growth potential and operating in niche markets that are still in need of development.The company’s financials are currentUHLN has been on our radar since February when we received the company's financial accounts and the stop sign was lifted. Additionally, we appreciate that UHLN had plans to acquire other businesses. Taking into account the usual reaction of the market when mergers are reported, we believe that UHLN was a great pick. On the top of it, the optimism was also high at the company as shown in the following words of the CEO, Everett Dickson:

“I am extremely pleased that we have finally completed the protracted process of bringing the filings current. We can finally move towards definitive agreements for the financing and the acquisition. These tools will completely revive the company,” said Everett Dickson, CEO, UHLN.

The acquisition of TRU-Food Provision Co.The market was finally in a position to affirm the good direction of UHLN after the agreement with TRU-Food Provision also from Atlanta. The new corporate move is brilliant, as it places the company in the $750 billion U.S. restaurant industry. The new brand was presented with the following words:

"The brand is known as the place where you should “Be TRU to YOU”. TRU-Food offers a diversity of menu items, from flatbread sandwiches, bowls, wraps, salads, and fresh proteins such as chicken, turkey, steak and falafel. All entrees are available in pre-prepared “meal plans”, for take-out, as well." Source

With this new merger, UHLN is not only adding new assets, but also diversifying its revenue streams, improving profitability and increasing shareholder value. In our opinion, the market has not yet recognized the move and is waiting to receive the next annual report. We will need to stay tuned since this new document will show the new assets acquired, which could make the market react.What to expect in the following monthsAccording to the documents provided by UHLN and TRU-Food Provision, on March 9, 2018, they signed a stock purchase agreement, which contains the terms of the acquisition. Without discussing every detail included in that merger, readers need to know that the acquisition should close on April 30, 2018. Here, we have another opportunity. Listen carefully. In our opinion, the market is buying shares of this name, because they are expecting a rebound in April when the acquisition is official. We believe that our readers could profit from this transaction too.Why would the share price rebound?The expected intrinsic valuation of each share is expected to increase, as the transaction should enhance shareholder value. Think about it. After the transaction is official, UHLN will receive new assets, and, most importantly, a new business model. The company will get bigger and the market is expected to celebrate it, but only when the deal closes successfully. With this in mind, we will stay tuned to this name.ConclusionCurrently trading with a market cap of $0.5 million, UHLN is an interesting story among small caps. With the assets/liability ratio under one, the new transaction could not only mean millions for the company, but also an opportunity to recapitalize its balance sheet.To sum up, the moment is now for UHLN. We will follow the company's announcements in the next weeks. We encourage readers to do the same.Disclosure: We have no position in UHLN and have not been compensated for this article.Image courtesy of George Carter via Flickr.

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