$WAVD ($IAIC - Can lightning strike twice?)

Research & Analysis
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$IAIC Was a dotcom winner but can it’s new management transformation take it for another run…?

Overview
I started following this ticker over the summer as an uplisting was on the horizon. Fast-forward to November 26th and this is now traded on the Nasdaq and new management is making aggressive moves.

This was a Y2K Play back in 97. It went to a pre-spit equivalent of $300. Still hardly any shares outstanding…

What It DO?
Information Analysis, Inc. provides information technology services. The firm engages in the business of modernizing client information systems, developing and maintaining information technology systems, and performing consulting services to government and commercial organizations. It specializes in legacy systems modernization, ebusiness solutions, enterprise portals, system migration and re-hosting services, and enterprise application integration. The company was founded by Sandor Rosenberg in 1979 and is headquartered in Fairfax, VA.

They mainly provide system modernization services that will help agencies and enterprises prevent cyberhacking (Modernizing legacy computer systems that operate on outdated languages such as COBOL).

They have been capturing the huge opportunity with state and local governments operating off of antiquated software that had proven to be extremely stressed during the COVID shutdowns. (this isn’t a COVID play) Existing & future Gov’t contracts are going to be an annuity payment…

The Numbers:

  • Market Cap: $38M
  • PPS: $2.75
  • Shares Outstanding: 13.5M
  • Current Float: 5.3M
  • 90-Day Avg. Vol: 16,356 (Includes OTC but now that this is on Nasdaq recent vol is 40k+)
  • Options IV: N/A

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There has been a clear transformation over the last few years as they look to leverage their foothold on government contracts as well as their recent acquisition of Gray Matters, Inc which is a player in crypto.

The CEO & there entire board floated its own offering…

The Play
This is a 3-12 month swing play as I see 2022 being a huge growth year. There is a low float, they just listed on the Nasdaq using only the ($3 price entry which is harder to accomplish for an uplist than the normal $5 min price requirement).

Short interest was essentially all but completely wiped out in November with only 100 shares short (LOL). Add the extra daily volume we are seeing and the SPY correction this is a nice entry sub $3s. (I’ve been accumulating under the $3s since early summer)

Catalysts?
Company is aggressively transforming with recent acquisition(s) and adding strong members to their team with proven track records:

Latest financial highlights from Q3 2021:
Information Analysis Releases Third Quarter 2021 Results Highlighted by Continued Growth in Higher Margin Professional Fee Business

Third Quarter 2021 Financial Highlights (all comparisons to prior year period unless otherwise noted)

  • Total revenues increased 9.6% to $4.3 million, compared with $3.9 million.
  • Professional fees increased 77.0% to $2.8 million up from $1.6 million.
  • Gross profit improved 59.3%, with gross margin expanding to 22.8%, compared with 15.7%; higher-margin professional fees accounted for 65.1% of revenues.
  • Net loss of $(95,527), compared with net income of $214,703.
  • Adjusted EBITDA1 of $126 thousand, compared with $225 thousand.

Nine Months 2021 Financial Highlights (all comparisons to prior year period unless otherwise noted)

  • Total revenues increased 15.2% to $12.5 million, compared with $10.8 million.
  • Professional fees increased 155% to $8.6 million up from $3.4 million
  • Gross profit expanded significantly, increasing to $3.0 million, or 23.7%, compared with $1.3 million, or 11.9%; higher-margin professional fees accounted for 68.8% of revenues.
  • Net income of $218,445, compared with net income of $53,744.
  • Adjusted EBITDA of $876 thousand, compared with $67 thousand.

Previous acquisitions in 2021:
Information Analysis Incorporated Announces Acquisition of Tellenger, Inc.

Information Analysis Begins Corporate Transformation - Enters Into Definitive Agreement to Acquire Gray Matters, a Zero Trust, Blockchain-Enabled Technology Platform

New Management:
Information Analysis Continues Building for Transformation

Information Analysis Appoints Tim Hannon Interim Chief Financial Officer

Information Analysis Appoints Technology Industry Leader Jamie Benoit Chairman and Chief Executive Officer

Gov’t Contracts:
Information Analysis Plays Critical Role in Modernization and Enhancement of SBA’s Largest Loan Program

Here’s a link to their investor presentation back in June 2021
Highlights:

  • IAIC is attacking a modernization market opportunity of $1 Trillion at an assumed cost of $5 per line of code
  • Information Analysis Incorporated (IAI) has a 40-year history delivering IT-related professional services to enterprises, including over 25 key government agencies as well as commercial customers
  • IAI has demonstrated a core competency in modernizing legacy computer systems that operate on outdated languages such as COBOL, with over 100 million lines of code updated to date
  • IAI intends to leverage this experience by expanding its solutions set and customer base, as exemplified through its recent acquisition of Tellenger, Inc. which added significant capabilities in cloud solutions and cybersecurity
  • Recent additions to senior management and the Board of Directors: Implementing an aggressive organic growth plan and a robust acquisition strategy

Forward looking:

  • Experts estimate there are approximately 220 billion lines of COBOL code that are in need of upgrade to more modern programming languages. This creates a modernization market opportunity of $1 Trillion at an assumed cost of $5 per line of code.

Holding shares @ $2.79 Holding 1,111 shares at $3.06

I’d love to see some options added on this…

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Only half way through the day, these look like big boy blocks…

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Alright alright so we ended the day on record volume… nbd… nothing to see here :crazy_face:

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Tomorrow should be interesting none the less. Wouldn’t be surprised if there was a pull back before more blocks change hands. This is tute buying imo.

$3.20 and below are good entries but would love some help on key support lines.

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Love seeing this hold and jump on such low volume. $3.20 and below entry would be ideal.

Grey Matters has been operating in stealth mode until now. Zero trust, SCM solutions for any business as a saas company with recurring revenue on high margins is their new direction. COBOL modernization is the back end revenue kicker that this has with govt contracts. Lots of moving pieces here. Stay tuned.

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So yeah… MANAGEMENT and the BOD backed a $10M PIPE today and we’re up 10% on the day. This is HUGE news imo because it’s the second time internal management and BOD backed financing. No financing costs because they did it all in house, no banks to tell them how to operate, let their vision fly.

What is their new direction? Well this is all about Gray Matters and blockchain supply chain management. This is something big brewing here because they’ve been operating in stealth mode up until now.

Information Analysis Announces $10,000,000 Equity Financing

Proceeds to Fund Acquisition of Gray Matters and Aggressive Growth of Blockchain-Based Secure Supply Chain Technology

Highlights:

  • Each unit gives a .20 Warrant @$4.50, which is locked up (non-exercisable) until January 2023, & good through Dec 2026
  • “The proceeds from this financing positions us to close on the acquisition of Gray Matters, Inc. just three months after I joined the Company and provide the additional working capital required to aggressively deploy our unique blockchain technology to the wider government and commercial markets”
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Ladies and gentlemen… I present to you

WAVEDANCER

Deal is now officially closed and we have a new ticker change (WAVD) upcoming

Up 5% AHs

Starting to finally learn wtf is going on from their stealth mode and here’s a few antidotes:

  • The only enterprise-grade blockchain software being operated for the US Govt
  • Compatible with any company’s existing systems and processes (literally)
  • Zero trust

Just a reminder that the float is pretty damn small, could run pretty quick

Still holding initial position of 1,000 shares and I will accumulate if I get any dips below 3.20-3.10 and anything below $3 I’d go significantly in.

Recently got 52 weeks highs so not sure of a higher support band has been established.

I would extremely appreciate any other thoughts or TA on this. I think this has huge fucking potential.

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Alright first and foremost nice work on the DD, i read through and did a but of background research on the company as this was completely new to me, I saw this earlier near the beginning of the month but unfortunately hadn’t had the time to sit down and give my 2c. I Like the space the company is looking to occupy and i think there is a significant opportunity for them to capitalize on this.
Here are y thoughts moving forward on this company, again i like the set up looking ahead especially with the very recent uptick in value on this stock going from $2.80-4.40 in a couple weeks, i think on paper they are making the correct moves, although i don’t understand the recent acquisition, directly to what they company currently does but i also don’t sit on those board meetings as well, overall i think this could be a great potential play but i do have some concerns as well.
The current stock price has recently shot up past what feel is currently a safe entry short term play as i feel buying near or at ATH isn’t the safest moves, going medium to long on this buying near current peak may not matter as much but to reduce risk i personally will wait for the next pullback should there be one of any significance.
Also taking a look at some of the numbers both which you have posted and what was on the company website, they seem to correlate with a company that is setting up for the future, but my main concern is this company is also amassing some debt in the process, with the acquisition and capital spent growing the company my fear would be the company would be outpaced by the spending and negatively affect the future growth of the company “essentially growing to big too fast” again this may be of no concern when the company begins to see a return on investment for all of this capital spent, if the stock continues to grow along with revenue and new sales this could be a excellent play moving forward.
As of now there are no options and i will be taking a position on shares should there be a pullback below 3.40

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This is only getting started… up 70% from my original investment.

A nice summary from someone “close”: Gray Matters was “purpose built” for one of the most critical agencies of the US Government. There is a reason you can’t get much, if any information on Gray Matters before the acquisition.
It hasn’t even started. The IP alone is worth 5x’s more than what Wave Dancer paid for the company.

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WaveDancers new slogan?

TRUST NOTHING. KNOW EVERYTHING.

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I got in and I am still currently holding a recent and continued run up I will begin to look for an exit next week hopefully above 5.50 as it has already ran a bit.
Nice work on the dd I bought it the day of me reading this around 3.90 and have seen a good return Thank you!

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Right on! Glad you made some quick profit. Ever since the $4s I was looking for a pullback into the low $3s to add on more but never saw an opportunity.

I’m still holding my full position and am really excited to see the $5s eaten up soon. 2022 is going to be a great year :cowboy_hat_face:

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Quick update: another healthy pullback from a more than solid run from the 3s a month ago.

Might not see low 4s again but an entry under $4.50 would be nice (my fantasy of loading more in the 3s seem to be a distant memory at this point)

Still holding full position and wouldn’t be surprised at a shot at the $10s in 2022 but no price targets here…

Just a ton of optimism with what management acquired in Gray Matters and is architecting around their zero trust and scm blockchain software.

Gray Matters was apparently purpose built for a specialized government agency product. Hard to find much as they’ve been operating in stealth mode until now.

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Investor Deck is out, I can’t wait to read this:

More updates to come!

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Some initial highlights from the deck:

  • Purpose built to solve a difficult global problem for the United States Government (cough Russian election hacks? cough - this isn’t true it was to solve for SCM issues)

  • Seek strategic acquisitions (an IoT fold-in is the next puzzle piece)

  • Flexible blockchain platform for use with any type of physical or digital asset

  • Presently deployed by the US Government to track sensitive equipment and other property

  • GovCloud approve by Q1 2022 (this is huge)

  • Multiyear plan to emerge as the market leader in blockchain and IoT

  • 22% CAGR

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This all some great stuff thanks a lot

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Thank you! Still working on my DD skills and appreciate any and all feedback.

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Quick update: With a broader market pullback, we’ll likely see some really good entry opportunities coming up. If you can get a fill below $3.50 and $3.20, those are awesome entry points IMO ($3.60 is more reasonable). I also expect a catalyst within the next 2-3 months as WAVD looks to acquire an IoT company, this is one of the big puzzle pieces to the plans in 2022. They going to build a behemoth of a company imo…

Fun Fact: WAVD was looking for a way to go public and IAIC just happen to be the company that fit perfectly. They specifically went this route as opposed to going the SPAC route… well… for obvious reasons… (cough SPACs Bubble cough)

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This is an AMAZING “fireside chat” with the CEO Jamie Benoit. The man is an absolute apex officer…

Get’s spicy around 6 minutes and 11 minutes in but suggest watching the whole thing. The video has a TON of bullish forward-looking comments throughout the whole video. I’m seriously considering doubling my initial investment with the market lulls right now…

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A summary of the video and why I’m more bullish than ever. (This was written in order of the video so if you need reference points on some of the Companies names below check my earlier posts in this thread breaking everyone down)

  • CEO, Jamie Benoit, is only bringing in management who are willing to put in their own money (no freebies, he wants people willing to work hard, no handouts) (BOD is stacked with top talent) (Jamie/Management has participated in EVERY round of fundraising) → “Everybody has to write a check if they want to work for me” (Management and directors own about 1/3 of the company)
  • IAIC was specifically sought out as the company to partner with to bring WAVD into the market (clean historical financials, already public, no messy SPACs needed)
  • SAAS product dual use for government and commercial to solve for complex supply chain issues (seriously, how many companies have you heard of having supply chain issues over the last two years?!!)
  • Tellenger gross margin expansion expected relative to sales (This was the acquisition prior to Jamie joining, in-line with IAIC’s old business model and will continue to operate on it’s own. will provide business with steady cash flow behind the scenes of WaveDancer)
  • Tellenger has a facilities clearance that allows the company to work with the Department of Defense, IAIC thus became eligible to bid on gov’t contracts, and now WaveDance holds this clearance $$$
  • Tellegner possesses CMMI level 3 - Allows for prime contract opportunities that only certain companies can bid on, WaveDancer now holds this as an ability to enter into higher margin work (“aperture widens”)
  • Grey Matters → “In 10 years from now, you won’t be able to operate a business without a blockchain” “We won’t remember what life was without it”
  • Blockchain enabling in every facet of life (buying a house, car, helping secure complex supply chain… etc)
  • Jamie is the largest stockholder in Gray Matters and personally put his own capital into the company
  • Gray Maters was created and funded to solve a problem led by a Government Agency (Government incubated blockchain technology, built from ground up, features added by request of Government customer, and is now today built into an out of the box solution, ready for the world (No other company in the world was created using this path, it was literally built for success)
  • This is Blockchain for two parties to do business together; was built to solve a very specific problem that can be applied to ALL businesses
  • This is now a reference account which will be a huge boost for proof of product
  • Highest priority is hiring salespeople, aggressively deploying capital around a robust salesforce
  • Example: Blockchain as a way of getting fidelity that every component in a product has met all specs and requirements - Thus de-risking anything in the supply chain that would compromise the quality of said product e.g. cars, jet airplanes, IBM does this, etc)
  • WaveDancer Directly competes with traditional database owners such as Oracle
  • Earnings guidance will be provided later in 2022 after interim CFO is replaced (allows for CFO to lead guidance
  • Acquisitions targets for SaaS with a commercial customer base and aligns in similar verticals
  • WaveDancer’s name, fun fact: Jamie grew up as a skateboarder and a shop near him was called WaveDancer, the ticker WAVD was a radio station out in Maryland beach towns. So this is an an ode to Maryland beach history if you will…
  • There is a desire to increase the float in the future as needs arise (there will be entry points during these times)
  • Upcoming K will be treated like an S-1, with a ton more information to be disclosed… (can’t wait!)
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WaveDancer Blockchain approved for use on Amazon Web Services (AWS) Marketplace for GovCloud

Move opens new customer channels and expands availability of Company’s unique Blockchain technology across US Government

WaveDancer said, “I’m ecstatic that just 60 days after partnering with Gray Matters, we are able to announce our blockchain enabled technology has made it through the rigorous AWS process and will now be available in the AWS GovCloud Marketplace. As part of our larger transformation, this move will enable government customers in need of cloud-based blockchain solutions to reach WaveDancer’s unique capabilities and will enhance the ability of our government partners to better solve complex global supply chain and logistics problems.”

This massive price movement is now shaking out the old investors and penny flippers… the beast is just. getting. started…

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