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Market Data: Yahoo Finance, Bloomberg, SEC Filings

Report Link: Updated Research Report (Dated 08/24/2018)

Symbol: TEUM
Analyst: John Nobile
Taglich Rating: Speculative Buy
Price Target: $4.00
Time Horizon: 12 Months
Rating Established: May 25, 2018
Price When Established: $2.36
Most Recent Report: August 24, 2018
Price When Issued: $2.52

What's New

Pareteum Enters into Definitive Agreement to Acquire iPass

On November 12, 2018, Pareteum Corporation (NASDAQ: TEUM) announced it entered into a definitive agreement under which Pareteum will acquire iPass in an all-stock transaction. iPass is a provider of global mobile connectivity, and location and performance data.

Under the terms of the agreement, Pareteum will commence an exchange offer to acquire all of the outstanding shares of iPass common stock, offering 1.17 shares of Pareteum common stock in exchange for each share of iPass common stock tendered. The exchange offer is subject to customary conditions, including the tender of at least a majority of the outstanding shares of iPass common stock and certain regulatory approvals, and is expected to close in the first quarter of calendar year 2019. No approval of the stockholders of Pareteum is required in connection with the proposed transaction.

Pareteum anticipates achieving more than $15 million in annual cost synergies with greater than $12 million of those expected to be realized in the first full quarter of combined operations. Pareteum currently estimates approximately $2 million of GAAP earnings accretion and $5.5 million of non-GAAP earnings accretion in the first full year after closing the transaction. In addition, the acquisition will add new offices and talent in Silicon Valley, California and Bangalore, India, expanding Pareteum's presence globally.

Pareteum Announces 3Q18 Results

On November 7, 2018, Pareteum Corporation (NASDAQ: TEUM) announced results for its third quarter ended September 30, 2018.

For 3Q18, Pareteum reported revenue more than doubled to $8 million. The company reported a net loss of $7 million or $(0.12) per share versus a net loss of $2.3 million or $(0.16) per share.

Taglich Brothers estimated 3Q18 revenue of $7 million and a net loss of $101,000 or $(0.00) per share.

Pareteum Expects at Least $8 Million in 3Q18 Revenue; Expands Executive Leadership

On October 5, 2018, Pareteum Corporation (NYSE American: TEUM) announced that it expects a minimum of $8 million in 3Q18 revenue for approximately 129% growth over the comparable quarter in 2017 and 33% sequential growth over 2Q18. Customer connections, a leading indicator of revenue, are expected to exceed 2.9 million as of September 30, 2018. Expected results reflect Pareteum only and do not include the acquisition of Artilium which was approved by the courts in London on September 28, 2018.

On October 4, 2018, Pareteum announced that Denis McCarthy has been promoted as the company's first president, and Amy Love has joined as chief marketing officer.

Formerly senior vice president of corporate development at Pareteum, McCarthy will lead Pareteum's growth strategies, and guide the company through the integration of newly-acquired Artilium. McCarthy will oversee finance, corporate development, human resources, marketing communications, and operations support. As chief marketing officer, Love will refine and elevate Pareteum's brand to showcase how the company is delivering for customers and the investment community.

McCarthy was previously senior vice president of finance and operations at Mosaic Networx Inc., which delivers cloud-based data and telephony services to enterprises. Prior, McCarthy was chief financial officer of AP Telecom, a global sales channel manager for Undersea Cable Installations, and chief financial officer and chief operations officer of Pac-West Telecomm, a provider of next generation VoIP solutions for enterprise and communications services providers. McCarthy began his career and spent nearly ten years in public accounting, providing assurance and advisory services in the high technology and software industry, including telecommunications and bio-tech companies both at Arthur Andersen and RSM. BS in Business Administration and MS in Administration from Bryant University.

Love joins Pareteum from the Georgia Institute of Technology Advanced Technology Development Center (ATDC) where she led statewide programs, helping technology startups launch and scale. Prior to ATDC, Love was head of marketing and communications for the South Carolina Department of Commerce and launched the state's lifestyle and business brand "SC is Just Right;" she later became the state's inaugural director of the Office of Innovation. Love worked in Europe for German telecommunications company Deutsche Telekom and its mobile line of business T-Mobile, and built corporate communications tools needed as the company expanded globally. BA in English from Furman University and a Master of Mass Communication, public relations emphasis, from the University of South Carolina. Love is a Liberty Fellow, part of the Aspen Global Leadership Network.

Pareteum Announces Shareholders Vote in Favor of Artilium Acquisition

On September 13, 2018, Pareteum Corporation (NYSE American: TEUM) announced shareholders voted 98% in favor of issuing shares to acquire Artilium. The transaction is expected to close by October 1, 2018.

The combined companies, on a pro forma basis, post-closing (assuming the businesses had been fully combined for the whole financial year ending 31 December 2018), is expected to generate revenue of approximately $49 million with approximately 4.2 million connections, and adjusted EBITDA of approximately $11.9 million.

Company Description

Pareteum Corporation, headquartered in New York, NY, is a cloud communications platform company. Cloud communications involves the integration of multiple communication methods and services that can be accessed over the Internet and are handled and hosted by a third-party (such as Pareteum) through the cloud.

Company Reports

Updated Research Report (Dated August 24, 2018)
Initial Research Report (Dated May 25, 2018)


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