History was made on Tuesday when the penny stock of AmbiCom Holdings, Inc. (OTCQB: ABHI) set a YTD record for volume traded, both in dollars and in shares. Without any news or updates from the supplier of cloud based optimization software for PCs and servers, shares of ABHI stock surpassed the 1,000,000 shares traded mark for the first time ever and managed to still close flat at 0.025, despite Kodiak Capital Group having their’s out for sale. With increased shares to be issued and revenues starting to come in the account, the prospects of returning to their 50Day and 200Day moving averages could spark some interest across the OTC Markets that’s worth downloading in advance.
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Having long been focusing on Wi-Fi and Bluetooth applications for the medical and healthcare industry, AmbiCom has been a development stage designer and developer of wireless products. Since the Company acquired Veloxum, the focus has shifted towards optimization of server infrastructure configuration settings using its patented Active Continuous Optimization which helps realize the full potential of both visualized and physical IT infrastructure.
To grow in the competitive environment of IT, it takes money which usually comes in the form of borrowings. Traders began to show their concern with this and ABHI shares soon after began to decline when, on April 24, AmbiCom and Kodiak Capital Group, LLC. The deals would allow for Kodiak to buy up to $1,000,000 worth of ABHI shares in amounts up to $25,000 per, solidified by the Company issuing 500,000 shares as a commitment fee along with a SPA to be able to borrow up to $500,000 from Kodiak.
The first note was a 15% Senior Secured Convertible Debenture in the principal amount of $115,000 with proceeds of $100,000 due on April 24, 2016. The “at any time at the option of Kodiak” conversion of the note was stated to be equal to the lesser of $0.10 or 65% of the lowest closing bid price for the 30 trading days immediately prior to conversion.
Another 1% Convertible Redeemable Note in the amount of $50,000 whereby a pre-existing obligation to an unrelated third-party in the amount of $50,000 was assigned to Kodiak was also issued. That note had terms of “the conversion price equal to 70% of the lowest closing bid price for the 30 trading days immediately prior to conversion. It all comes together with the S-1 filed in June for 1,500,000 shares of ABHI stock issuable to Kodiak Capital Group, yet, under the terms, the share price would have had to have been dropped drastically for those 65% and 70% of the lowest closing bid price to be favorable for the financiers.
Without knowing about the financing arrangement, a quick look at their YTD chart would be puzzling for some to see how, after trending between 0.07 and 0.219 during the first 5 months of 2015, shares of ABHI stock had been on a steep, low volume decline to as low as 0.015, down -93%, until last week. Since Labor Day, ABHI has slowly, but steadily, clawed its way back up to as high as 0.034 yesterday and could be in line for some even greater prints.
The pieces to the puzzle which fit into why ABHI shares started to fall make sense when the Kodiak deal is understood and the Company’s June 8 decision to increase the amount of authorized shares from 150,000,000 to 200,000,000 align. To make matters worse, less than two months later, CEO John Hwang signed off on another 14C filing, this time to increase the authorized from 200,000,000 to 500,000,000 – two increases in less than 3 months. The reaction to the two decisions and favorable conversion terms of the Kodiak deal reflects the move downward, yet positive news has since flowed from AmbiCom.
Just over a month ago, AmbiCom announced that revenue for the quarter ending July 31, 2015, Q4/FY2015, was $187,920, an amount that is equal to nearly 5X the $38,947 in revenues booked during the previous quarter and $10,168 more than those that were reported for the nine months ended April 30. More so, Kevin Cornell, President of Ambicom Holdings Inc, and co-founder of Veloxum, stated that “We are conservatively forecasting that we double that number in Q1/FY2016 which ends October 31, 2015.”
With growth now peaking its head out in advance of the 10-K filing, ABHI shares seem to have stabilized some after that bounce off their all-time low. Since the share amount, in total, the Kodiak got isn’t too significant, the one factor, the possibility of more debt financing deals to come, will likely keep traders from throwing more than a gambles worth at the ticker in hopes of a return to silver.
Find out more about ABHI shares here: $ABHI
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ABHI Stock Detailed Quote – Past 5 Days