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TXHD Last Trade .0008. Ludlow Research Price Target .02. A potential 35 bagger. Read:

Last Updated: May 16, 2017
Ludlow Research Reaffirms $0.02 Target on TXHD as Revenues Jump Sharply
(NEW YORK) – Ludlow Research reaffirmed its opinion on Textmunication Holdings, Inc. (OTC: TXHD), an online mobile marketing platform service provider, with a valuation target of $0.02 based on rapid growth of SMS capacity, and projected sharp growth in revenues in the coming quarters.
Report Highlights
- Q1 Revenues +259% over 2016 - Retires 1.7 Billion Common Shares - New GEN 3 Platform Now Online - Platform potential Acquisition Target - SMS Capacity increases 1 Billion Per Month - Platform to Compete with Twilio - Aspire Medicaid IT Contract - Eliminating Toxic Debt
In the report, Ludlow Research made note of TXHD growing revenues, projected growth of SMS volume on their mobile marketing platform, and Aspire IT Government contract for Medicaid and Medicare programs.
Expanding SMS Capacity
The Company recently announced that in order to keep up with the demand Textmunication was scaling its SMS software platform with the addition of two new Scalability Engineers from one of Silicon Valley’s leading technology firms. The Company is in the final process of implementing a robust and scalable platform capable of sending more than 40 million SMS per day, or up to 1 billion SMS per month. This could potentially position TXHD as an emerging competitor to the sector leader in SMS market, Twilio, Inc. (NYSE:TWLO).
Beats Twilio on Short-Code Capacity
Textmiunication new GEN 3 platform will be one of the most robust platforms in the industry - and ranked as a 'Top Tier' SMS provider as far as volume, speed and capability. On the short-code, which is SMS texts with five digits (like 87365), Textmunication is set to become an industry leader, and could draw in a large wave of new tech investors into their stock.
Twilio current short-code capacity is around 100 SMS per second, where as Textmunication's new Gen 3 Platform will be able to achieve 450 SMS per second once fully rolled-out. This technology alone will put TXHD on the radar within the SMS industry, but also benefit their partnerships/alliances off this new scalable SMS platform.
As of late May 2017, the Company new GEN 3 SMS Platform is now live and going online, and more updates on this roll-out could be expected going into the summer months.
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Revenue Potential
On pricing schedule each customer could be different based on needs, and customized contracts, but in general TXHD pricing on this new platform could be in the range of $0.01 to $0.05 per SMS, give or take.
Add in that this new GEN 3 Platform capacity could be up to 40 million SMS per day, or 1 billion SMS per month, and you can quickly see the dramatic revenue potential about to unfold here with TXHD.
Example: If TXHD were to send 1 billion SMS per month (full capacity) at say $0.02 per SMS that would equate to around $20 million in monthly revenue for the company.
If you take in a more realistic use of just 20% of total capacity, and at a $0.02 per SMS formula, that still comes out to around $4 million in monthly revenues.
This increase in revenue potential with the GEN 3 Platform could quickly move the company away from the need for toxic funding, and set the stage for a sharp increase in the stock as this overhang is removed.
Acquisition Target
Textmunication new GEN 3 SMS Platform has real stand alone value, and could become a potential acquisition target for any larger company looking to bring in an already operational, and scalable SMS platform into their business.
The question investors need to ask is what would the value be for an SMS platform that has a higher short code capacity then Twilio, and increased scalability be worth in the open market.
Scalability Engineers
On March 10, 2017, the Company announced the addition of Rajeev Varshneya, a former team member at Phillips NV, as Technical Advisor to assit with this capacity upgrade. Mr. Varshneya roles at Phillips included CEO of Phillips Software Center, VP of Product Strategy, Engineering and Operations and SVP of Technology, Product Development and Strategy. He has also led numerous technology start-ups and is actively involved in government contracting with leading Systems Integrators.
In his role as Technology Advisor, Mr. Varshneya will design a technology roadmap setting Textmunication on a course to be a leading SMS solutions provider. He will bring in his network of technology architects and developers to assist in Textmunication’s technology growth, M&A and market leadership.
Recent Earnings
For the three months ending March 31, 2017, the Company reported revenues increase 259% to $228,750, as compared to $88,410 in the same quarter in 2016. For the same three-month period, the Company reported that Gross Profits rose 220% to $155,341, compared to $70,734 in the same three-month period in 2016. This gross profit represents gross margins of around 67% of total revenues produced.
The rise in Textmunication's revenue is attributable to an increased client base, new exclusive partnerships and a recently launched SMS White Label program to the fitness and salon verticals. Several new sales initiatives are planned for the remainder of 2017 allowing current and new customers access to Textmunication's GEN 3 software platform scheduled for a late Q2 release. The new platform can send more than 1B texts per month offering clients more functionality and flexibility. It will provide faster API development and open doors to new verticals. The GEN 3 platform will be one of the most scalable SMS platforms in the industry.
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Aspire Government IT Contracts
The Company recently increased its ownership stake to 49% of Aspire Consulting Group LLC, a verified Service Disabled Veteran-Owned Small Business (SDVOSB).
Aspire is headquartered in the business hub of Washington, D.C. and provides IT consulting and solutionbased 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.
On March 1, 2017, that it was awarded a 10-year government contract as part of a teammate on the CMS SPARC Indefinite Delivery/Indefinite Quantity (IDIQ) contracting vehicle, with a ceiling on the IDIQ at $25 billion, and shared with multiple companies.
The Prime requested Aspire join the team based on its healthcare past performance and powerful SDVOSB certification. Aspire successfully performed on a 2016 Cloud and Big Data healthcare project gaining critical past performance marks.
The remaining teammates come from Fortune 500 companies, and other well-known Federal System Integrators. Strategic teaming is key to winning the numerous task orders delivered under this long-term IDIQ vehicle. The SPARC agreement offers substantial revenue opportunity for Aspire, and once task orders within the IDIQ are won announcements and revenue guidance will be made in public releases.
Task order revenues vary in size, but most are substantial and are multi-year arrangements split amongst the teammates. There are strict SDVOSB work share mandates required by the U.S. government. The Veterans Benefit Act of 2003 requires each government agency to set aside at least 3% of contracts for SDVOSBs. On the state level, the percentages vary, but in most cases are higher. Aspire is competing for state contracts where the SDVOSB requirement is a minimum 7% of total revenue.
The SPARC agreement also provides Aspire the necessary past performance credentials to compete longterm and be successful with future contracting proposals. Aspire's SDVOSB certification is one of the most coveted in government contracting. The CMS SPARC contract is one of the largest IDIQs in government and carries substantial past performance metrics.
Aspire just submitted a proposal for the Veterans Affairs (VA) VECTOR SDVOSB contract. This is a $25 billion IDIQ centered on Management, Analysis, Training, Outreach, Supply Chain and Human Resource staffing. Aspire's team on VECTOR now awaits the award of this contract. Two other contracts are pending, with one for system modernization of a state's Motor Vehicle Administration (MVA) infrastructure, and other as a subcontractor on a key federal agency.
Aspire has teaming agreements with Northrop Grumman - the #2 federal systems integrator, Tech Mahindra one of the largest business transformation firms in the world and a Direct hiring agreement with Phase One Consulting Group on its Department of Transportation (DOT) and Commodity Futures Trading Commission (CFTC) programs. The SDVOSB certification helps these companies hit specific government goals as it relates to veteran-owned business credits.
Textmunication acquired a minority-stake in Aspire gaining government contracting access. The partnership also allows Aspire's management team to open new SMS verticals in the government sector.
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Share Structure
As of May 2017, the Company had just below 1 billion common shares issued and outstanding. The Company made a strategic move recently by issuing 2 billion shares to the company CEO, but just recently reduced those shares by 1.7 billion into a class of preferred shares. This reduction has greatly reduced the shares issued and outstanding in TXHD.
Conclusion
Based on TXHD current and projected growth in revenues, increasing SMS capacity to become a major player in SMS marketing industry, pending Government health IT contracts through their Aspire division, market valuation compared to leader within sector, and reduction of shares outstanding Ludlow Research has reaffirmed its ‘speculative’ valuation target of $10 to $20 million, or $0.01 to $0.02 per share based on current share structure.
About Textmunication Holdings, Inc.
Textmunication Holdings, Inc. is developer in the mobile marketing and loyalty industry, providing cutting-edge mobile marketing solutions, rewards and loyalty to our clients. With a powerful yet intuitive suite of services, clients are able to reach more customers faster and reward them for repeat business through SMS technology. We help clients reach their marketing and revenue goals by educating clients with the most effective tools in mobile marketing, rewards, paperless redemption and loyalty. www.textmunication.com
Follow the Company on Twitter for updates: http://twitter.com/Textmunication
About Ludlow Research
Ludlow Research is a New York based equity research firm that focuses on providing research coverage and investor awareness services to emerging small-cap companies. For over 14 years we have worked to provide our readers with a simple way of evaluating the current and potential value of small-cap companies, while garnering these clients greater market awareness to new investors. For more information on us please visit www.ludlowresearch.com
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Disclaimer:
This is NOT a solicitation to Buy or Sell any security, but rather is for informational purposes only. Content contained herein includes facts, views, opinions and recommendations of individuals and organizations deemed of interest. Ludlow Capital, Inc ("Ludlow") does not guarantee the accuracy, completeness or timeliness of, or otherwise endorse these views, opinions or recommendations, or give investment advice. Ludlow, its affiliates, or directors, may or may not hold a position in the above security from time to time, and investors are encourage to consider this as a possible conflict of interest when reviewing this information. In Compliance with SEC Rule 17B Ludlow was compensated three million restricted common shares for ongoing media consulting services, and thus should be considered a possible conflict of interest when reviewing this report and information. Ludlow, or its affiliates, may hold a position in above securities from time to time, and thus should be considered a possible conflict of interest when reviewing this report and information. These investments may involve a high degree of risk, thus investors are highly encouraged to consult with a financial advisor before any and all investments.
Safe Harbor Statements:
This website includes statements that may constitute forward-looking statements made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Although the Company believes that the expectations reflected in such forwardlooking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected.
Forward-Looking Statements This news release contains certain statements that may be deemed "forward-looking" statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Forward looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made. Except as required by law, the Company undertakes no obligation to update these forward-looking statements in the event that management’s beliefs, estimates or opinions, or other factors, should change.
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