Eyes on The Go Inc (OTCMKTS:AXCG) Swings Wildly

If the message boards are anything to go by, Eyes on The Go Inc (OTCMKTS:AXCG) enjoys the support of many loyal shareholders. People say that they have been invested in the company for years and insist that they have no intention of selling any time soon. The mood is generally positive and a lot of traders believe that the ticker could soon break through the $0.01 per share barrier.

Looking at the press releases, we can see where the optimism is coming from. AXCG made nine announcements over the last six and a half months and informed us about more traffic on their Gander TV streaming website, about new venues being added to it, and about increasing revenues.

For all the enthusiasm, however, AXCG is proving to be extremely volatile. Between March 31 and April 8, for example, it jumped out of the triple zero levels and went as high as $0.0025. Unfortunately, the run was cut short yesterday when it wiped out nearly a third of the value and closed the session at $0.0017. This makes the future performance rather unpredictable and, judging by the latest 10-Q, this might not be the only problem.

Here’s what AXCG had as of September 30, 2013:

• cash: $2,178
• current assets: $34 thousand
• current liabilities: $1.4 million
• quarterly revenues: $16 thousand
• quarterly net loss: $316 thousand

Some of the issues like the lack of cash and the rather big net loss are quite obvious. We should note, however, that there are a few positive things as well. The revenues (though far from enough to outweigh the expenses) have made a huge year-over-year leap and even when you compare the results above with the ones posted at the end of the second quarter of 2013, you’ll see a 136% increase in proceeds. If the optimism coming out of the recent press releases turns into yet more substantial revenues, AXCG might become an extremely interesting stock to follow. The future reports should give us a clearer picture of where the company is heading, but in the meantime, there is one thing you need to consider.

It’s clear that AXCG‘s debt is quite substantial. Some of the notes are convertible into common stock and although the management team has so far been able to keep the dilution at bay, there are some things to suggest that this is changing.

In September 2013, for example, some note holders turned $41,430 worth of debt into more than 190 million shares of common stock. This brings the conversion rate down to just over $0.0002 per share and it presents a massive profit opportunity for the former creditors.

The 2013 10-K which should come out soon will tell us if there’s been additional share issuance. In the meantime, doing a lot of due diligence and considering all the risks carefully might not be a bad call.

Medient Studios Inc (OTCMKTS:MDNT) is another OTC ticker that lost ground during yesterday’s session. It logged some significant volume while wiping out more than 40% of its market cap. Vega Biofuels Inc (OTCMKTS:VGPR), on the other hand, managed to shift $2 million worth of stock, added 34% to its value, and closed the day just shy of $0.01 per share.