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Tuesday, April 03, 2018 8:07:54 AM

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Despite the fact that the management keeps pleasing shareholders with new announcements that denote company growth, Andiamo Corp (OTCMKTS: ANDI) is languishing at three months lows. New letters of intent to acquire other telecommunications companies or the fact that new advisors are joining ANDI has not been enough for the market, which has recently reduced the market valuation of ANDI three times.

The recent trading volume of 200 million is indicating that a rebound may be in the works. However, taking into consideration the underlying long-term bearish run, it may be wise to take a back seat and wait for further confirmation on the direction of trade.

One month stock chart for Andiamo Corp OTCMKTS:ANDI
1-month chart for ANDI

From the chart above, it is clear that ANDI is trading in a dramatic downtrend. For the stock to be considered as a long-term play, its stock price should rebound back above the $0.01 mark, seen as a key psychological level.

On the downside, a close below the $0.07 mark would worry the long side. Those who entered the stock back in the highs of February could sell their stakes, which could lead to further stock declines. With the company releasing beneficial news, this case scenario is not, in our opinion, very likely.

We are revising the background of ANDI for those who don’t know this name. Andiamo Corporation, founded in 2000, is a Wyoming domiciled publicly traded company. ANDI and its subsidiary Utopya cast themselves as an emerging technology company focused primarily on the development and distribution of mid-market smartphone devices equipped with a proprietary software ecosystem. The strategy of ANDI is acquiring stakes in complementary technology firms in order to bolster its intellectual property.

Recent Developments

We hardly understand why, at the end of February, the share price commenced a sharp decline. The news released around this time frame were beneficial. On February 27, 2018, ANDI released that it had secured the rights to a large inventory of over 140 mobile apps developed by Action App Corporation and All-Pro Apps Corporation; two subsidiaries of Andiamo Corp. With the company revitalizing these two subsidiaries and more inventories to include on the balance sheet, the reaction of the market should be the opposite.

The reaction of the management was obviously optimistic. Read the following words:

“We’re very pleased to have access to such a large inventory of promising mobile apps, especially given the fact that many of these apps already have an exceptional track record of success. With that being said, we are committed to ensuring that any products being marketed under the Utopya brand are worthy of the name, and that is why we are undertaking a thorough analysis of each app prior to making any determinations with respect to their availability on Utopya smartphone devices.” Mike Starkweather, CEO of Utopya.

There was more in March.

On March 1, 2018, the company noted acquisition conversations with a US-based Telecommunications company. While the talks were said to be in preliminary stages, we believe that a deal would be announced. Companies don’t appreciate releasing such type of conversations if it is not about a serious deal, as it can harm their market capitalization, so we believe that a deal could be signed soon. The management was again optimistic about the future growth of ANDI:

“We are very excited about these talks and the possibilities for rapid growth that they bring,” stated Mike Starkweather, President of Andiamo Corporation.

We did not have to wait a lot since on March 13, 2018, ANDI released a letter of intent to acquire a telecom holding company CLEC Holding, Inc. in an all-stock transaction. That’s not all. The most interesting is that CLEC Holding is also in talks to acquire several Competitive Local Exchange Carrier companies that are all revenue-producing and in growth mode. If CLEC is able to close those deals, the share price of ANDI could run. It is a new serious catalyst for ANDI.

The following information is also very significant for ANDI. CLEC will not only bring new deals but also $15 million in new financing:

“We are in talks with multiple acquisition targets, as well as funding sources. We will seek to secure up to $15 Million in funding directly to CLEC Holding, with no dilution to ANDI or its shareholders. We hope to announce our first acquisition in the next 10 days. The additional acquisitions are still in early-stage discussions but do seem very promising, and are aligned with our long-term vision for CLEC Holding, which is to acquire telecom and telecom-related companies when it is strategically viable to do so, in order to expand our network capabilities and grow.” stated Justin Su, President of CLEC Holding.

Finally, on March 27, 2018, we got to know that more people are interested in joining the company. The serial entrepreneur, venture capitalist, and tech trailblazer Ilja Laurs became a new advisor to the company. He brings expertise in developing mobile software technology in GetJar, one of the world’s largest mobile app stores and Nextury Ventures, a venture capital firm. Please remark that he was Chairman of both companies.

Mr. Laurs is a pioneer in mobile software technology and has a track record of building multiple nine-figure companies from scratch. He is the Founder and Executive Chairman of GetJar, one of the world’s largest mobile app stores, and Chairman of Nextury Ventures, a venture capital firm that invests in early-stage startups in multiple high-tech industries. Additionally, he comes with a lot of contacts in the media industry, as he is regularly quoted in the Wall Street Journal, Forbes, Bloomberg, CNN, BBC, and CNBC, among many other news sources.

Conclusion

With a market cap of $28 million, despite the market is not recognizing it, ANDI’s story is very popular among small-cap players. The total amount of assets is equal to $0.13 million, and there are only $0.037 million in total liabilities, so the balance sheet seems stable.

Regarding the income statement, the last report for the quarter ended January 31, 2018, shows that ANDI is already delivering revenues, but it lost $0.12 million. In our opinion, the growth is what counts here. If the company can prove that it is able to sign mergers and agreements, the previous income statements will not matter.

To sum up, be sure to have ANDI on your monitor list.

Disclosure: We have no position in ANDI and have not been compensated for this article.
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