GENERAL OVERVIEW OF CLWD:
FINANCIALS:
Over the last three years (2017-2019) CLWD’s 4th quarter financials were reflected in their 10K (full year ending report). A company of CLWD’s standing has a 90-day period after the end of the fiscal year to submit the 10K disclosure. Consequently, like the last three years have consistently presented the numbers should be released in early April.
REVENUES:
Over the first three quarters of 2020 CLWD has amassed revenues totaling $8,019,804 (1st Qtr--$3,204,407, 2nd Qtr--$2,412,221, 3rd Qtr--$2,403,176). In a PR released on June 16th 2020 CLWD management stated they anticipated revenues to exceed 14M for the year. Unfortunately, due to the effects of covid on the overall economy in 2020 it’s not likely they’ll hit their projection. What’s worth pointing out is the fact CLWD’s financials reflected an increase in revenue for each of the first three quarters of the 2020 fiscal year when compared to 2019 (1st Qtr up 21%, 2nd Qtr up 12% & 3rd Qtr up 16%). Which is very impressive and really constitutes the effectiveness of their product/services and I should add this is prior to AI being integrated with the proprietary SWARM software applications. What’s really noteworthy is when the country went into lockdown during the second quarter for several weeks. So many companies large and small reported lower revenues for the quarter when compared to the previous year. I’m sure the dominant player in the space (Trade Desk—price to sales ratio of 55) would have welcomed an increase of 12% for the 2nd quarter like (CLWD—price to sales ratio of 7) instead of their 13% decrease from the previous year’s quarter.
TECHNOLOGY:
SWARM is still in its infancy having been released a couple years ago. The uniqueness of the product centers around the incorporation of behavioral analytics with the results enabling them to attract more higher-margin enterprise clients over the course of that time. The effectiveness of the product showed as companies cut back spending over the course of 2020 and yet CLWD was still able to exceed revenues for the previous year and keep in mind this is prior to AI layers being added to the tech stack.
It’s very apparent the licensing agreements with Pattern89 & Wrench.AI allowing CLWD to integrate “Artificial Intelligence Technology” into their entire proprietary SWARM software application tech-stack has taken the company to that next level of recognition based on a product now that has no limitations as to how the service can benefit a company wanting to maximize the efficiency of their marketing/advertising dollars. The results they’ve made public displaying the effectiveness of their services through their aiAdvertising venture is starting to get a lot of attention and should open up some incredible avenues for them resulting in significant future growth.
What we’ve been able to glean so far from PR releases has confirmed the AI services have been available for at least six months--(”After six months, the client increased its commitment by 340%”). They’re still in the developmental stage of transitioning SWARM into a cloud hosted software platform--(“The company is developing SWARM into a cloud hosted software platform that will harness the power of artificial intelligence, machine learning, and predictive algorithms to eliminate the inefficiencies, waste and guesswork that is inherent and accepted in today’s data driven digital marketing campaigns"). When they accomplish this, I would anticipate a significant jump in revenue stream as they transition from their past cumbersome hourly/monthly charge model of fixed or variable implementation fees to a more streamline recurring self-service subscription revenue model the cloud hosted software platform would provide.
FUNDING:
Having a background in the software industry I can attest to the various degrees of difficulty which are encountered with various phases of development. Temporary hurdles have a tendency to present themselves and complicate the process. That’s why taking necessary steps in making sure they’re able to meet the financial demands as they transition moving forward by raising additional capital in a more non-toxic way is very important. The reality is, even though CLWD generates revenue, it still falls into the category like every other OTC company of not generating enough cash to make capital expenditures via profits to grow the company. The Direct Offering is an excellent avenue and accomplishment at this stage of the company’s development and as llcoolm11, Alfy1952, Rawsteel, Marinokv, Zuper8, Tincups & Hbhmb all pointed out, in a constructive fashion, is very favorable in many ways.
I can’t help but reflect back to a message one of the CLWD message board members posted a few months back regarding a response he received from the CLWD CFO—Mr. Greg Boden concerning the PR referencing the up-listing to the OTCQB. Essentially the response stated that when the company publicly announces the intent of accomplishing an objective the plan to get there is already in the process of being initiated. So, with that being said... I’m looking forward to the initiation of the orchestrated plan over the coming months (maybe the posting of a better-than-expected revenue number for a quarter? or the signing of a big client? Who knows?) that will be timed with the S-3 in mind creating upward pressure on the CLWD share price by potential and current investors in order to maximize the amount of working capital raised. 2021 is going to be a blast.
