Axxes Pharma Inc (OTCMKTS:AXXE) Climbs Higher
On Monday the stock of Axxess Pharma Inc (OTCMKTS:AXXE) registered a massive gain of more than 45% closing the day at $0.0434 per share. Yesterday the ticker continued its triumphant march up the chart adding another 28.8% to its value and closing the session at $0.0559. It should be noted, however, that during both trading days AXXE showed signs that such prices might be quite unstable – on Monday the stock closed below its opening price while yesterday it reached an intraday high of $0.0765 but slid down afterwards.
Interest in the company also rose dramatically and yesterday’s traded volume doubled the one from Monday after investors exchanged more than 13.8 million shares. The monthly average for the stock is 8 times lower at 1.68 million shares.
Despite its gains though AXXE still have a long way to go if they want to recover their losses incurred since the start of the year. Compared to the high of approximately 22 cents from mid-January the company is currently sitting 74% lower. The depressing chart performance shouldn’t be that surprising when you take into account the myriad of red flags that surround the company. Let’s start with the last reported financials – the quarterly for the first three months of 2015 showed contained the following results:
• $23 thousand cash,
• $475 thousand total assets
• $4.8 million total current liabilities
• $20 thousand sales
• $747 thousand net loss
So, at the end of March AXXE had minimal cash reserves, massive working capital deficit of over $4.3 million and just $20 thousand in sales. The company has been talking about increasing their revenues especially during the second half of the year but for now their results remain rather underwhelming.
At the same time more than 200 email alerts have been sent since the start of 2015 with the sole purpose of creating as much artificial hype around the stock as possible. The latest round of emails came just a couple of days ago – on July 5, from the affiliates of Stellar Media Group LLC – Penny Picks, Prepump Stocks, Penny Stock Newsletters. The pumpers disclosed a compensation of $17,500 for their services. AXXE has been pumped by various paid newsletters almost incessantly for two years now.
With quite a lot of outstanding convertible debt at the end of the first quarter the pumping might not be coming to an end anytime soon. If you want to see just how many shares have been issued at discounted prices since the start of the year you can take a look at pages F-13 and F-14 from the quarterly report. For now let’s just focus on the shares issued to Ramos & Ramos Investments. On March 25 they received 4 million shares followed by another 6 million shares issued in April. These shares were priced at just $0.01 each while the current 52-week low of the stock is $0.0241. Keep in mind that AXXE increased their authorized shares from 100 million to 150 million back in May.
If AXXE’s revenues do indeed experience a dramatic growth and if the company manages to uplist to the OTCQB marketplace, in the latest PR the company states that it expects the uplsiting to take place within 3 weeks, the stock might be able to keep its gains. The negative impact of the underpriced shares and the corresponding dilution should not be underestimated though. As of March 31 AXXE had 67.1 million outstanding shares but the OTCMarkets profile page of the company shows that currently there are 88.4 million outstanding shares.
