Universal mCloud Receives C$13 Million in Secured Debt Financing

Universal mCloud

Leading asset management provider Universal mCloud Corp. (TSXV:MCLD) (OTCQB:MCLDF) announced last week that it has entered into a credit facility with Integrated Private Debt Fund VI LP for $13 million CAD.

According to the company, proceeds of the loan will be used to fund the repayment of outstanding notes related to its recent acquisition of Autopro Automation Consultants Inc., as well as for working capital purposes. 

What’s more, Universal mCloud will be settling a debt owed to GBCC Corporation, its advisor on the Chinese market expansion opportunities, in the amount of $60,000 CAD through the issuance of common shares.

The private loan has a seven-year term at a low-interest rate of 6.85% per annum and mCloud intends to make blended monthly payments of principal, based on a twelve-month amortization schedule, and interest. 

This news comes just one week after Universal mCloud announced the full repayment of a $2 million USD loan from Flow Capital Corp., which allows the company to focus on executing its growth strategy of connecting assets across all lines of business.

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Universal mCloud’s Upcoming Q2 2019 Financial Results

Universal mCloud is also gearing up for its second quarter 2019 financial results conference call, which is scheduled for this Thursday, August 15, 2019. Investors will no doubt be tuning in at 5:30 pm EST to hear the details, which are expected to be positive thanks to the company’s ongoing growth.

In the first quarter, Universal mCloud completed a number of strategic acquisitions and has continued to do so into the second quarter. mCloud also saw a significant revenue increase in Q1 2019, up 500% from Q1 2018 at $2.2 million CAD.

Some of the highlights from the company’s second quarter include the acquisition of Fulcrum Automation Technologies and Autopro Automation Consultants, raising $23.4 million in financing, completing its first AssetCare deliveries to six oil and gas facilities, repaying its $2 million loan, and now, receiving a $13 million loan.

The acquisition of Autopro is expected to generate $35 million CAD in revenue and $5.5 million CAD in EBITDA on a trailing twelve-month basis and the application of AssetCare at the six Alberta-based oil and gas facilities is projected to bring in $1 million CAD in annual recurring revenues.

Universal mCloud Has Plenty of Room for Growth

Despite completing seven strategic acquisitions and increasing its revenue, Universal mCloud’s share price has only increased by 33.33% or $0.10 CAD since the beginning of 2019. Now sitting at $0.40 CAD, the company’s stock remains well below the price target of $1.20 CAD given by Echelon Wealth Partners analyst in April.

Of course, the company’s upcoming financial results could change that. 

What’s more, MCLD has plenty of room for growth within its three target industries. In Western Canada alone, the company now has access to more than 700 midstream oil and gas facilities. Moving forward, Universal mCloud has its eye on 14,000 oil and gas facilities around the world. 

Investors will likely want to jump on the upcoming call on August 15, 2019, to gain more insight into the company’s second-quarter financial results. The call will include prepared remarks from the company’s Chief Executive Officer Russ McMeekin and Chief Financial Officer, Chantal Schutz, as well as a Q&A. 

Universal mCloud’s share price was up 1.27% by noon on Monday at $0.40 CAD on the CSE and up 1.61% to $0.30 USD on the OTC.

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