Mexus Gold US (OTCMKTS:MXSG) Explodes Into Action
Mexus Gold US (OTCMKTS:MXSG) added 26.05% to its market value yesterday, after making an impressive announcement. So what’s wrong with that?
Well, while the up-beat tone is certainly there, once you take a closer look, the announcement itself is a bit vague. It heaps a ton of boasts on MarMar, but little in the way of actual proof that MXSG’s new co-venturer is actually worth its salt.
This should make investors view the company’s PR claims with a healthy dose of skepticism. True, a joint venture in which another company does all the heavy lifting could prove to be beneficial for MXSG, because it could open some commercial opportunities for MXSG to capitalize on.
The problem here is that, as far as due diligence can show, it doesn’t appear that MXSG is ready to capitalize on anything with its latest financial report looking like this:
- Cash & current assets – $13 thousand
- Total current liabilities – $1 million
- Revenues – $87 thousand
- Net loss – $834 thousand
Those do not look like the financials of a company that shows any promise for improvement in the immediate future. No, instead they smack of the idle mediocrity that is more often than not the norm among OTC Markets penny stocks.
And then there’s the fact that during 2015, MXSG paid $427 thousand worth of stock and $40 thousand cash for settling just $286 thousand worth of debt. Moreover, it’s not like that is an isolated incident – the company’s been issuing notes right until the end of the last reported period, and while its latest batch will not be due for a couple of months yet, the threat that the company’s tendency towards toxic funding represents is very real.
The fact that the company’s shares outstanding have jumped from 291 million to 486 million between February 2015 and February 2016 should be enough of a hint to investors that they need to be extra careful when dealing with MXSG stock.
