High Wire Networks Inc (HWNI)

[kai-zen]

Background on recent purchase ADEX, AW solutions and Tropical ...from ICLDs most recent 10-k

Here you go:

https://backend.otcmarkets.com/otcapi/company/sec-filings/11929210/content/html

Overview of the three businesses we have bought from ICLD:

ADEX Corporation. ADEX Corporation (“ADEX”) is an Atlanta-based provider of engineering and installation services and staffing solutions and other services to the telecommunications industry. ADEX’s managed solutions diversifies our ability to service our customers domestically and internationally throughout the project lifecycle.

AW Solutions, Inc . AW Solutions, Inc. and AW Solutions Puerto Rico, LLC (collectively, “AW Solutions”), are professional, multi-service line, telecommunications infrastructure companies that provide outsourced services to the wireless and wireline industry. AW Solution’s services include network systems design, architectural and engineering services, program management and other technical services. Through Logical Link, an Outside Plant (OSP) engineering company, AW Solutions provides in-field design and drafting of wireline, fiber and DAS deployments. Logical Link also performs construction and installation through subcontractors.

Tropical Communications, Inc. Tropical Communications, Inc. (“Tropical”) is a Miami-based provider of structured cabling and DAS systems for commercial and governmental entities in the Southeast.

What we get from ADEX and why ICLD purchased then in the first place:

The shortage of skilled labor in the telecommunications industry and the difficulties in recruiting and retaining skilled personnel can frequently limit the ability of specialty contractors to bid for and complete certain contracts. In September 2012, we acquired ADEX, an IT and telecommunications staffing firm. Through ADEX, we manage a database of more than 70,000 IT and telecom personnel, which we use to locate and deploy skilled workers for projects. We believe our access to a skilled labor pool gives us a competitive edge over our competitors as we continue to expand.

Category:

Our three reportable segments are applications and infrastructure, professional services and managed services. Professional services is comprised of the ADEX entities, applications and infrastructure is comprised of TNS, Tropical, AW Solutions and RM Engineering

and Revenue per category

The table below summarizes the revenues for each of our reportable segments in the years ended December 31, 2016 and 2015.

Year ended December 31,
2016 2015
Revenue from:
Applications and infrastructure $ 22,173 $ 21,263
Professional services $ 36,937 $ 26,655
Managed services $ 18,890 $ 26,190

As a percentage of total revenue:
Applications and infrastructure 29 % 29 %
Professional services 47 % 36 %
Managed services 24 % 35 %

Cost of revenue, gross margin, gross profit % :

Year ended December 31,
2016 2015
Applications and infrastructure
Cost of revenue $ 18,541 $ 14,879
Gross margin $ 3,632 $ 6,384
Gross profit percentage 16 % 30 %

Professional services
Cost of revenue $ 26,463 $ 21,004
Gross margin $ 10,474 $ 5,651
Gross profit percentage 28 % 21%

iHub makes it a pain to format everything. For more detail use the link at the top and ctrl+F to search the 10-k for key terms.

Thanks,

KZ