Here's Where We Are Looking Now For InterCloud Systems Inc (OTCMKTS:ICLD)

InterCloud Systems Inc (OTCMKTS:ICLD) gained close to 80% on its market capitalization last week and has gone from an under the radar technology microcap to the talk of the town amongst traders at this end of the space.Our regular readers, however, were well aware of this one long before last week's run.InterCloud is a company that we have covered on numerous occasions over the last six months, with the most recent coverage coming as part of this piece. At the end of said piece, we concluded with the following:

"What we’ve got here is a company that is currently valued as the latter, but which has transitioned to the former. Markets are yet to recognize this transition, and in this lag in response lies the opportunity."

When we refer to "the latter" in this conclusion, we are referencing what we deemed at the time as being a seemingly outdated view of InterCloud and its operations; one that priced in historic trends towards questionable capital structure and regular infusions of toxic debt."The former," on the other hand, is how we refer to the company in its current form – a restructured technology play that, as per management's efforts over the last six months, has streamlined its operations in an attempt to become a smaller, but far more attractive (from a shareholder perspective) entity.We knew it could only be a matter of time before wider markets latched onto the disparity between perceived and actual valuation and, in turn, before InterCloud underwent some degree of reevaluation to accommodate this realization. Last week's move went some way towards doing just that, but we still think there's plenty of upside run room left in this one for the remainder of 2017.Ultimately, our thesis remains unchanged and remarkably simple.Management, led by CEO Mark Munro, is on a mission to unload a whole host of noncore assets and use the capital picked up on the back of this unloading to pay off senior debt. With said senior debt having weighed incredibly heavily on the company's market valuation to date, it's lifting should translate into a parallel appreciation in capitalization.In other words, a removal of a downside pressure should translate to some upside gain.Sticking with this thesis, the more pressure relieved, the higher the company should run.At last count, there remains a little under $6 million senior debt still on the balance sheet. While we haven't got word of any fresh asset sales subsequent to our previous coverage, we have seen news of some new contracts, each valued to the tune of multimillion dollars, and serving to demonstrate that non-core offloading shouldn't have too much of an impact on InterCloud's ability to generate topline revenues.Further, and just as importantly, both of the fresh contract announcements relate to an area of the company's operations called its NFVgrid platform – one totaling $2 million as per this release and a second totaling $1.5 million as per this release.The important thing about the NFVgrid platform is that it lends itself to cash flow positivity – it's relatively low input from an initial capital outlay perspective and, once in place, it's easily scalable. For a company that is looking to shrink itself in an attempt to achieve cash flow positivity and, ultimately, to generate a return for shareholders, a focus on this sort of scalable technology makes perfect sense and is something that we are going to be watching closely for from InterCloud throughout the remainder of the year and beyond. In short, if management is able to build a decent portion of its business around this platform, there's a solid chance of profitability at some point during 2018.There is still some way to go, and anybody not already in the stock needs to take this into consideration before picking up exposure. While management is seeking to offload assets, some of its technology is capital-intensive, and there's always the potential for a dilutive offering necessitated by the requirement to grow to meet demand.With that said, we don't see this as prohibitive to an exposure near term, and while we may see a short-term correction on the recent run, we expect the stock to quickly recover from any correction as newer participants load up at a discount on the dip.New to this one? Catch up on the whole story here.We will be updating our subscribers as soon as we know more. For the latest updates on ICLD, sign up below!Image courtesy of Chris Potter via FlickrDisclosure: We have no position in ICLD and have not been compensated for this article.