Eyes on The Go Inc (OTCMKTS:AXCG) Rises Ahead of Quarterly Results

0AXCG.pngEyes on The Go Inc (OTCMKTS:AXCG) hasn’t registered a red session since May 7. Although the volumes last week were nothing to shout about and although some of the sessions showed virtually no price movement, the ticker is definitely shuffling up at the moment.

Yesterday, for example, investors traded nearly 190 million shares which resulted in a dollar volume of just under $540 thousand. That is a respectable amount of money for a sub-penny ticker, but the price gains are even more impressive. AXCG managed to jump up by 40% and closed the session at $0.0031 per share. Clearly, a lot of eyes are now on the stock and people seem genuinely excited about the future. And why wouldn’t they be?

Between January 1 and April 15, the company made a total of six announcements and they spoke about increasing traffic on their website, about additional venues being added to it, and about bigger revenues. People were anticipating the report for the first quarter of 2014 and were, apparently, hoping to see some decent figures.

Well, the wait is now over. A couple of hours after yesterday’s closing bell, AXCG issued a press release saying that the results are in and that there’s been a 2,900% jump in revenues year over year. Early today, the 10-Q came out and it confirmed this. Here’s a summary of all the figures:

  • cash: $4,960
  • current assets: $64 thousand
  • current liabilities: $3 million
  • quarterly revenues: $91 thousand
  • quarterly net loss: $619 thousand

When you compare the results above with the ones reported at the end of Q1 of 2013, you’ll see that there is indeed a 2,900% jump in revenues. That’s quite an achievement and not a whole lot of companies are capable of doing it.

Despite this, there’s no getting away from the fact that the rest of the balance sheet is absolutely appalling. You would agree that with less than $5 thousand in the bank and with a working capital deficit of around $3 million, they won’t be setting the internet world on fire. What’s more, although the revenues have grown, so has the net loss and with profitability nowhere in sight, the long-term effects on the stock performance could be rather devastating. There is another, more sinister threat.

0AXCG_logo.pngIf you take a look through our previous article, you’ll see that about a month ago, we tried to warn investors about the fact that quite a lot of discounted stock is seeing the light of day as a conversion of debt. Now that we have the 2013 10-K and the Q1 report, we can tell you exactly how bad the dilution is. According to the filings, between August 2013 and March 2014, AXCG converted around $364 thousand worth of notes into more than 1 billion common shares. This brings the conversion rate to around $0.0002 per share. For the record, AXCG is currently traded at levels that are roughly 1,450% above this rate.

Will the people who got the ridiculously discounted stock cash in on the exciting profit opportunity? Or will they hold on to their shares in the hope of a bright future? We’ll leave it up to you to weigh the odds.

One thing is for sure though, the majority of investors seem to be quite disappointed about the dilution and about an hour after today’s opening bell, AXCG is hovering around $0.0027 (nearly 13% below yesterday’s close).

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