Today we are issuing a research update on a company that has achieved impressive developmental and financial milestones. In just a matter of months, this company has improved its balance sheet, completed the early stages of testing, and has set itself up for a successful beta test phase and future commercial launch via a just announced $2M credit line.
Clearly, these moves reduce the risk in these shares and dramatically enhance the stock's value as the company progresses along the product developmental chain. It has a patent-pending, feature rich, innovative unified personal communications that is on the cusp of a commercial launch with the major potential market share success. Once the beta testing is completed and the platform is launched we believe that the stock could more than double from current levels.
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The ChitrChatr technology is based on VoIP (Voice over IP) and uses internet services and data transmission, rather than the public circuit-switched telephone networks (PSTN), cellular networks and satellite service. ChitrChatr subscribers can obtain telephone numbers from approximately 65 different countries, making the CUUCP an enviable universal communications solution.
CHICF Has Also Achieved Major Financial Milestones
In the fourth quarter of 2014, the Company executed two transactions which clearly improved the balance sheet. These deals included a small private placement and the settlement of $300,000 in debt. In both instances, the Company completed unit offerings that consisted of one share of stock and a one warrant. It should be noted that our estimated shares outstanding figure in the table above includes the shares issued in these offerings as well as the warrants. In our view, these transactions could prove to be critical as the Company reduced its debt and also paved the way for meaningful future fundraising without additional dilution via warrant exercise.
Separately, CHICF recently secured a line of credit for $2,000,000 to be used to complete the final development after testing and for marketing efforts of the widely anticipated market release of the platform. The line of credit will facilitate and streamline necessary actions for the completion of the final development phase and should serve as a major boost that ensures a successful future commercial release. Moreover, this access to capital dramatically reduces the Company's risk profile.
Shares Offer Big Upside and Good Value
In just a matter of months, CHICF has improved its balance sheet, completed the early stages of testing, and has set itself up for a successful beta test phase and future commercial launch via the just announced $2M credit line. Clearly, these moves reduce the risk in these shares and dramatically enhance the stock's value as CHICF progresses along the product developmental chain, prior to its commercial launch and potential market share success. Once the beta testing is completed and the CUUCP is launched we believe that the stock will be driven toward our $3.75 price target. We continue to rate these shares Speculative Buy.
RECENT TRADING HISTORY FOR CHICF
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SENIOR ANALYST: ROB GOLDMAN
Rob Goldman founded Goldman Small Cap Research in 2009 and has over 20 years of investment and company research experience as a senior research analyst and as a portfolio and mutual fund manager. During his tenure as a sell side analyst, Rob was a senior member of Piper Jaffray's Technology and Communications teams. Prior to joining Piper, Rob led Josephthal & Co.'s Washington-based Emerging Growth Research Group. In addition to his sell-side experience Rob served as Chief Investment Officer of a boutique investment management firm and Blue and White Investment Management, where he managed Small Cap Growth portfolios and The Blue and White Fund.
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