Today, we are bringing a new business profile that has recently surprised us.
It is called Tactical Services Inc (OTCMKTS:LUADD), which provides advertising services.
The share price has gone from $0.6 to $0.9 in a short period of time.
Furthermore, the trading volume of the company increased in October hitting more than 600,000 shares and showing a lot of market interest in this name.
Have a look at the share price action before we provide more details about the stock:
LUADD focuses on providing streaming televised advertisements for customers lining up on the outside of nightclubs. We believe that it is quite an innovative business idea. Read the following from the company materials:
“The idea is to showcase that particular nightclub’s scene, special events, deals on drink specials and advertisements from local businesses and other companies. We plan on providing the TV at no cost to the club and generate revenue through the sale of advertisements from local restaurants, cigarette companies, alcohol companies, clothing companies and for sports and entertainment events.” Source
How is the company researching the market?
The company is creating a map of night clubs’ locations and local businesses that may benefit from the company’s services. The company expects to collect information regarding the demographic of the clubs and check for frequent clubs. The idea seems to be aimed at identifying when, where, and for how long lines of customers are created.
The company expects to hire third parties to perform this tasks.
What’s the equipment that is necessary?
The necessary equipment for providing the services includes televisions of different sizes. The company noted that the price varies between $1,000 to $6,000; depending on the manufacturer and TV size.
Which are the contracts to be signed?
The company signs contracts with nightclubs and then tries to find advertisements from businesses close to the club. Local restaurants, cigarette companies, alcohol companies, clothing companies, hour stores, late night eateries or taxi companies will pay for the advertisement services.
As the stock price seemed to commence an upward trend in October/November, we will assess the announcements made in these months.
On September 28, 2017, the company released its annual report, wherein we could find the company’s plans. A lot of information regarding the business plan could be found there. The market did not really react to the announcement, thus we believe that nothing new was released.
On October 16, 2017, a new quarterly release for the period ended July 31, 2017 was noted. We believe that market participants could find something valuable this time.
Read the following:
“Our Board of Directors has begun to analyze strategic alternatives available to our Company to continue as a going concern. Such alternatives include raising additional debt or equity financing or consummating a merger or acquisition with a partner that may involve a change in our business plan.” Source
What does it mean?
It seems that the company will be looking to merge with another business structure. We appreciate this fact. A merger would bring new assets, new know-how, a new business model, and many new contacts. Thus, we encourage readers to follow from now on the new announcements, as a transaction could make the share price move quite a bit.
On October 25, 2017, the company released a new Asset Acquisition Agreement with Thomas Li and Nathan Xian. The company looks to be entering the Drone industry. Read the following:
“TACC purchased those assets owned by Inventors relating to Inventor’s development, sales, marketing and distribution of Unmanned Ariel Vehicles (“UAV” or “Drones”) including but not limited to patents, trademarks, know-how, trade secrets” Source
How was this paid?
The company paid with shares and it seems that a change of control has occurred. According to the filing, the two individuals are expected to own approximately 73% of total outstanding shares. The transaction has not closed yet and there are several pending conditions. But, we believe that if this reverse merger finally works out, the share price could increase.
There is more. This is one of the conditions included in the filing:
“Further, the Agreement contains a post-closing condition such that the Company’s majority shareholder shall, within 5 days of the Closing Date of the Agreement, cause the cancellation of 50,000,000 shares of its restricted common stock currently beneficially owned by him and such stock shall be returned to the Company’s treasury.” Source
Hence, after the transaction closes, the amount of shares will be reduced. Usually, the share price increases when a transaction like this occurs.
To sum up, be very alert on the next weeks, as there are very big catalysts on this name.
LUADD seems like an interesting name to follow closely. There are several things to assess. First of all, the amount of assets that the new merger will bring is a key feature to assess.
Furthermore, we will need to check the state of the balance sheet once the transaction is consummated.
Additionally, the new management in place will need to be announced. It is key that we assess their business profiles. The work that they have done in the past will tell a lot about the plans of the company. If the market likes it, the share price could be pushed up.
Finally, the business plans of the new management will also determine the next share price movements.
To sum up, in the near future, the share price may move quite a bit. Only market participants properly informed will be able to take profits.
We will be updating our subscribers as soon as we know more. For the latest updates on LUADD, sign up below!
Image courtesy of KMR Photography via Flickr
Disclosure: We have no position in LUADD and have not been compensated for this article.