TEXTMUNICATION HLD COM NPV (OTCMKTS:TXHD) is a micro-cap name on the move with a clear narrative in play. The key theme to arise in recent weeks stems from the company’s minority ownership of Aspire Consulting Group LLC, who was notified on March 1, 2017 that it has been awarded a significant 10-year government contract to apparently take part in the process of transitioning from ObamaCare to TrumpCare. That story has been pushed by some investor awareness activity on the stock as well. But this is a genuinely interesting name and deserves some attention.
Traders will note 37% tacked on to share pricing for the company in the past week, but this action is running counter to the larger trend in the name. Market participants may want to pay attention to this stock. TXHD has a history of dramatic rallies. Furthermore, the name has seen interest climb, with an increase in recent trading volume of a bit less than 500% above the average volume levels in play in this stock over the longer term.
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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As the reader may be aware, and as we have previously covered, on January 5, 2016, Textmunication Holdings, Inc. entered into a Share Exchange Agreement with Aspire Consulting Group, LLC. Aspire is a verified Service Disabled Veteran-Owned Small Business (SDVOSB). 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.
According to the recent release, “Aspire is headquartered in the business hub of Washington, D.C. and provides IT consulting and solution-based services to commercial, state, and federal agencies. Aspire is connected to the government procurement community and has advisors who have served in state government cabinet positions and Fortune 500 companies. This network, along with the SDVOSB certification, positions Aspire as a sought after partner for government contracts.”
However, there is some tricky accounting involved in this relationship. For example, 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.
The company also has sales registering from its core business in text communications. But, at present, the potential buzz from the company’s Aspire investment is likely to fuel more interest. The top line is growing at over 60% according to recent reports, which shouldn’t be overlooked. That said, as we will see in a second on the financials side, that growth has so far added up to no cash on hand and a clear risk of future dilution. But, this is a clear momentum play right now, and may have another big leg if the chips fall in the right order.
At this time, carrying a capital value in the market of $882k, TXHD has virtually no cash on the books, which compares with about $439K in total current liabilities. TXHD is pulling in trailing 12-month revenues of $402K. In addition, the company is seeing major top line growth, with y/y quarterly revenues growing at 61.8%. We will update the story again soon as developments transpire. 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!