TEXTMUNICATION HLD COM NPV (OTCMKTS:TXHD) is a sub-penny micro-cap bottle rocket over the past couple days. TXHD has started to garner huge attention after the company’s minority-owned Aspire Consulting Group LLC was notified on March 1, 2017 it has been awarded a significant 10-year government contract to apparently take part in the process of transitioning from ObamaCare to TrumpCare.
From what we could dig up, the company owns 49% of all outstanding membership units (a way of expressing ownership interest in an LLC) of Aspire. So, this is no joke in terms of exposure. Aspire is a verified Service Disabled Veteran-Owned Small Business (“SDVOSB”). This certification opens opportunities as both a prime contractor and subcontractor within the government sector.
TEXTMUNICATION HLD COM NPV (OTCMKTS:TXHD) bills itself as a company that provides mobile marketing solutions, rewards, and loyalty services in the United States, Canada, and Mexico.
The company operates an online mobile marketing platform that provides mobile coupons, mobile voting/polls, multimedia messaging, text messaging, Web widgets/online forms, and loyalty and rewards programs; and SMS reminders related to various appointments, anniversaries, b-days, oil changes, tune ups, and other events, as well as offers APIs that integrates with various systems or applications.
It serves quick service restaurants; gyms, and health and fitness facilities; casinos, golf courses, bowling centers, and comedy clubs; and retail stores, as well as bars, salons, and medical professionals.
The company is based in Pleasant Hill, California.
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According to the release, “the Strategic Partners Acquisition Readiness Contract (SPARC) is a cost-effective, innovative solution for procuring information technology (IT) professional services from a pool of Centers for Medicare & Medicaid Services (CMS) experienced partners. SPARC is a $25B 10-year multiple award performance-based contract. It is available to all components within CMS and all Health and Human Services (HHS) Operating Divisions to procure IT System development services – from end to end.”
After a protest was filed, the Government Accountability Office (GAO) added Aspire’s team to the list of awardees. CMS covers 100 million people through Medicare, Medicaid, the Children’s Health Insurance Program (CHIP) and the Health Insurance Marketplace. Awardees will be the primary groups driving any IT efforts at CMS related to ‘repeal and replace’ efforts and the future of TrumpCare.
In other words, TXHD owns a 49% interest in Aspire, and Aspire has some real success ahead. However, what we do not know is the terms of the agreement between the two companies as far as how profits earned by Aspire might ever truly impact TXHD. One assumes that TXHD has a growth asset in its stable, and the market is agreeing with that idea right now.
For example, the chart shows nearly 760% piled on for shareholders of the name during the past week. TXHD has evidenced sudden upward volatility on many prior occasions, so this move is not an alien in the chart file. In addition, the name has seen a huge influx of trading attention, which has driven volume numbers over 500% above the stock’s typical levels as this news is played over the tape.
However, that interest was created through a share exchange with Aspire, whereby the company gave the LLC 66,667 shares of their newly-created Series B Convertible Preferred Stock in return for the membership units. Those shares carry distributions such that it is not at all clear – in any straightforward way — what actual value, on balance, ever truly lands in the hands of TXHD from Aspire’s gains.
At this point, Aspire is waiting on several other large federal and state contracts as both a prime and subcontractor. Once award notifications are made, public announcements will be made. If it lands more contract exposure, we can probably expect more squeezing action in TXHD.
TXHD is leaning into the wind on the balance sheet side, with an empty wallet and about $439K in total current IOU’s. But that’s still good enough for a market cap of $16.5M (which is about $16M more than it was yesterday morning). TXHD is making money, pulling in trailing 12-month revenues of $402K, and that’s coming on some growth, as it happens, with y/y quarterly revenues growing at 61.8%. We will update the story again soon as further details emerge. For continuing coverage on shares of $TXHD stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!