mCloud Technologies Corp. (TSXV:MCLD) (OTCQB:MCLDF), a leading provider of asset management solutions that combines IoT, cloud computing, artificial intelligence, and analytics, announced Monday that it plans to consolidate its shares in preparation for uplisting to the Toronto Stock Exchange (TSX) and NASDAQ.
The company will consolidate all of its issued and outstanding common shares on the basis of one new common share for every 10 common shares, which is subject to TSX Venture approval. Following the consolidation, mCloud will have approximately 15.7 million common shares issued and outstanding.
“With our recent record financial results, the accretive acquisition of Autopro, and the successful execution of our expansion strategy, we have timed the share consolidation to continue to raise investor interest in mCloud,” said mCloud CEO Russ McMeekin. “In addition, we are in the process of filing a Form F-1 Registration Statement with the SEC, which will enable us to apply to be listed on the NASDAQ.”
McMeekin added that the company also plans to apply to uplist from the TSXV to the TSX, which will be subject to certain conditions.
mCloud Poised for Growth in 2020
mCloud’s share consolidation news comes just weeks after the company released very positive third-quarter financial results, which revealed $4.1 million CAD in organic revenue growth. The company’s year-to-date revenue came in at $14.4 million CAD, which represents annualized organic growth of over 160%.
Indeed, mCloud Technologies had a busy year, and now, thanks to its strong business performance, the company is on track to exceed 40,000 connected assets by the end of the year. MCLD’s AssetCare platform is now the primary driver for the company’s growth through the rapid addition of new customers, connected assets, and recurring revenues.
mCloud expects its revenue to double in 2020 and reach somewhere between $70 million CAD and $80 million CAD, with at least 50% of that revenue coming from high-margin AssetCare contracts. The company also expects to have at least 70,000 connected assets in the next fiscal year, as well.
The company’s record financial results caught the eye of Paradigm Capital analyst Kevin Krishnaratne, who stuck by his “buy” recommendation and offered the company an increased 12-month price target of $0.80 per share.
Although the company’s $9.2 million top line was below the analyst’s estimates, he found mCloud’s 2020 outlook to be very encouraging.
“We think mCloud is well-aligned with global energy management trends that are driving businesses to adopt technologies to lower electricity costs, extend the life of energy equipment, maximize energy production, and increase the intelligence of legacy energy systems,” wrote Krishnaratne. “mCloud’s competitive data and analytics edge, coupled with management’s energy industry experience, should help it add new clients to an already impressive base, while we see pricing power and new asset connections leading to outsized revenue growth versus other SaaS peers.”
Krishnaratne lowered his estimates for fiscal 2019 but has raised his expectations for the company in 2020. He expects mCloud will generate $70 million in revenue with an adjusted EBITDA of $11.7 million CAD.
By 2:45 pm EST, mCloud was down 2.22% on the TSXV at $0.44 CAD and down 3.33% on the OTC. Still, the company is up 50% so far this year on the OTC and up 46.67% on the TSXV.
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