LOI with Chinese Enterprise Giant’s Portfolio Company Catapults ITT Shares

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Wednesday, March 15, 2017

After holding a steady uptrend since last June, shares of Internet of Things Inc. (TSX-V:ITT) are putting on a performance Wednesday morning, gapping ahead 35 percent from a close at a dime per share on Tuesday to open at 13.5 cents per share. The stock price surged to a 52-week high at 16.5 cents before slipping back to 14 cents within the first hour of trading action.

One year ago, shares of ITT were trading at 6 cents each.

The catalyst today was news before the opening bell that the Toronto-based company – which operates in its eponymous industry – penned a letter of intent with New Hope Data Co. Ltd., an affiliate of, and investment for, New Hope Group. New Hope is a Chinese heavyweight, consistently ranked as one of the biggest privately-owned enterprises in the country with over 600 subsidiaries, 70,000 employees and annual revenue of roughly $15.5 billion.

The LOI, which still needs to be followed by a definitive agreement (anticipated in 30-60 days, according to ITT), lays out the framework for a joint venture between New Hope Data. Per the agreement, the JV will sell IoT (short for “Internet of Things”) solutions and services to New Hope’s massive network of factories and businesses.

Amongst other things, the LOI further contemplates that New Hope will initially invest $2 million into the JV and own a 49% stake in the venture, in addition to investing $300,000 in convertible debt in ITT. For making ITT priority and opening the sales channels to its hundreds of companies, New Hope will receive 28 million newly issued shares of ITT.

Bottom line here is that investors are cheering the potential for the JV to significantly improve the top and bottom line for Internet of Things, Inc., a company that in February said it was focusing on the “large and growing industrial IoT market opportunity in China.”

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