The share price of Ambicom Holdings Inc (OTCMKTS:ABHI) jumped in July on large volume after two of its affiliates put out a collaboration agreement. In this piece, we will provide details about this news as well as the financial shape of ABHI. Before you read anything, have a look at the share price action.SourceBusinessAmbicom Holdings Inc. (OTC PINK: ABHI) offers cloud-based active optimization services for PCs and servers, which also invests in various technologies that they believe to play a major role in future. With the help of management, AmbiCom turns various concepts into end products. The firm was founded in 2008 and is based in Nevada. It usually invests in technologies with a high profit margin to ensure maximum returns for the shareholders. The firm is in the middle of a lawsuit against the firm PC Drivers for non payment and damages caused by it. In the following video, the directors of the company hold a conversation with a journalist. It contains a lot of inside knowledge, so we included it in this piece.https://youtu.be/nHzeIXeGptcSourceThe company has two affiliates; Bravatek Solutions, Inc., which is a security-platform company that offers software and we have largely discussed it in several articles; and Voosh LLC, which provides cloud based optimization software. This is key to understand what happened recently with the share price.Recent DevelopmentsOn March 9, 2017, AmbiCom Holdings Inc. announced that a lawsuit was filed against PC Drivers for a nonpayment of $200,000. The lawsuit is related to the optimization software program. The second claim, however, seeks $10 million for the damages caused by PC Drivers. The press report mentioned the alleged violation of PC Drivers of a separate contract between AmbiCom and PC Drivers, limiting the use of AmbiComs optimization intellectual property to the consumer marketplace by PC Drivers.On June 6, 2017, the firm announced that it has issued around 28 letters seeking ‘clarification of process’ about its patent number 8,438,378 B2. The patent number 8,438,378 B2 is a Veloxum Performance Tuning Software that optimizes the performance of the PC with the help of user-specific operating environment. The following solution will speed up the systems and improve the IT performance of a firm simultaneously. As a result, a firm can enjoy significant cost savings with Veloxum. The firm issued a letter that seeks the process clarification from 28 firms. Alain Lewand, CEO of Ambicom Holdings, Inc., explained:
"These companies are marketing products that claim to improve the performance and capacity of Personal Computers. After discussions with the board of directors of Ambicom, it was decided to contact each company to ensure they are not infringing on our patented technology," Source
On July 21, 2017, AmbiCom Holdings Inc. announced that it started the process of SEC 10 filings. The CEO of the firm, Alain Lewand, stated the following:
"We are moving in the right direction in bringing AmbiCom back to a formidable company with lofty goals ahead and bringing back value to all our shareholders and investors." Source
The firm also announced that it started the necessary accounting required to comply with the SEC form 10 filings. The firm also aims to move its current financial year into last quarter of 2017. What did make the share price move?On July 26, 2017, Bravatek Solutions, Inc. and Voosh LLC put out an arrangement, whereby Bravatek will promote, sell and distribute Voosh LLC's field-proven software. It is a great deal. Dr. Thomas A. Cellucci, Bravatek's CEO, explained:
"We are pleased to formalize this special business relationship with Voosh, who has earned a well-deserved reputation in the optimization of computer system performance, via on premises or cloud-based deployments." Source
Mr. Kevin Cornell, Chairman & CEO of Voosh LLC, celebrated the news with the following words:
"We are pleased that we're joining the Bravatek team. Their marketing prowess, accomplished Board and management team, coupled with their in-depth knowledge of the public markets, will assist us in driving our sales growth. Together, we should make an unbeatable team!" Source
Very low float The recent volatility in the market may be partially explained by the fact that the float is quite small. Have a look at the following table:Shares Outstanding1.05 billionFloat37.73 millionSource: Yahoo FinanceOnly 3.7% of the total outstanding shares is owned by the public. This means that when there is a market participant who wants to buy or sell a big stake, he/she can move the share price quite a bit. The violent move on July 26, 2017 can be partially explained by this fact.Financial SituationThe last financial statements that the market got to know were for the year 2015. We believe that the balance sheet reported at that time may help us understand the situation of the company. Have a look at the assets owned by the firm (last three 10-Ks):Cash And Cash Equivalents (All numbers in thousands)53.452523.54596.871Short Term Investments---Net Receivables1.8510.49191.835Inventory25.52964.1289.732Other Current Assets136.2029.839167.274Total Current Assets217.034597.9891,045.712Long Term Investments---Property Plant and Equipment154.99897.56315.201Goodwill---Intangible Assets4,644.9065,082.375-Accumulated Amortization---Other Assets20.69520.69520.695Deferred Long Term Asset Charges---Total Assets5,037.6335,798.6221,081.608SourceNow, have a look at the liabilities of the company. Don't forget to note that the net asset value was positive at that time, and the long term debt was not very significant:Accounts Payable (All numbers in thousands)458.134143.10562.81Short/Current Long Term Debt847.51315.735-Other Current Liabilities312.6911.98381.98Total Current Liabilities1,618.338160.82444.79Long Term Debt454.23258.978-Other Liabilities---Deferred Long Term Liability Charges---Minority Interest---Negative Goodwill---Total Liabilities2,072.57219.798444.79SourceConclusionThe agreement between Bravatek Solutions, Inc. and Voosh LLC affected the share price of ABHI. We believe that the collaboration agreement will help the operations of the three companies, thus we believe that the market responded correctly in pushing up the share price. In addition, we believe that the small float helped increase the volatility of the price. Finally, in our opinion, the fact that the company will be releasing its annual report for the year 2016 is positive. We had a look at the balance sheet in 2016, and saw that the company's financial figures were not bad. If the company releases new financial statements showing that it is in better shape, the share price may creep up. To sum up, be alert on this company's announcements.We will be updating our subscribers as soon as we know more. For the latest updates on ABHI and BVTK, sign up below!Image courtesy of Mobileapp Daily via FlickrDisclosure: We have no position in ABHI or BVTK and have not been compensated for this article.
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