Axxess Pharma Inc (OTCMKTS:AXXE) Pumped for the Umpteenth Time
As you can see from our database, Axxess Pharma Inc (OTCMKTS:AXXE) has seen a lot of promotional action over the last ten months. Somewhat predictably, the effects on the stock have been quite horrific – in August 2013, AXXE was hovering around the $0.80 mark, but right now, it’s under $0.40. At the moment, the ticker is under attack from the pumpers yet again and we decided to see if there’s anything to suggest that the current campaign will be any different from the previous ones.
SixFigureStockPicks and their affiliated newsletters are the ones who have been tasked with artificially inflating AXXE‘s price. The people who stand behind the outfits received $60 thousand for their efforts and they say that the ticker is ready for a breakout. They also claim that “its long term prospects are huge“.
AXXE‘s management team, in the meantime, is trying to prove them right. A series of press releases (which, by the way, are suspiciously well-timed with the pump emails) were issued and they informed us about the launch of some new products, about orders being received from the U.S. Military and about distribution agreements. All in all, it sounds like AXXE is actually making some progress.
Open the company’s latest report, however, and you’ll see that there’s quite a lot of issues as well. Here’s what AXXE recorded at the end of the first quarter:
- cash: $62 thousand
- current assets: $85 thousand
- current liabilities: $529 thousand
- quarterly revenues: $4,994
- quarterly net loss: $189 thousand
It’s pretty clear that, while the press releases sound good, AXXE is still a long way from showing us some solid operations. If the wind is fair, they might be able to succeed some day, but at the moment, estimating their chances is extremely difficult.
And that brings us on to an interesting question: “Why would someone be willing to pay $60 thousand in order to boost the share price right now?“.
The third party financing the pump is called Ramos & Ramos LLC and a similarly-named entity, Ramos & Ramos Investments Inc., can be found in AXXE‘s filings. Apparently, Ramos & Ramos Investments have loaned some money to the company in the past and the statement tells us that the current portion of the debt ($183 thousand) can be converted into common shares at an undisclosed rate.
Many questions pop up: “Have they converted the debt?“, “Why didn’t AXXE disclose the conversion rate?“, “Will Ramos & Ramos hold on to their holdings in the event of a conversion or are they willing to part with them?“, etc.
Unfortunately, we’ll probably never know the answers. One thing that we do know for a fact is that investing in promoted penny stocks is extremely risky and that doing your due diligence is absolutely essential.
AXXE wasn’t the only pumped stock to start the week with an interesting session. Eco-Shift Power Corp (OTCBB:ECOP) is currently the target of a hard mailer promotion and yesterday, it managed to climb by around 2.4%. Terra Tech Corp. (OTCMKTS:TRTC), on the other hand, doesn’t need an orchestrated promotion. Yesterday, it bounced and gained as much as 32% while racking up a dollar volume in excess of $2.8 million.
