VGTel Inc (OTCMKTS:VGTL) On A Massive Winning Spree
Back in March 2012 VGTel Inc (OTCMKTS:VGTL) issued a press release in which they talked about their future plans and targets for acquisition. The announcement itself contained no meaningful information, but more importantly, it coincided with a promotional campaign for VGTL with a total budget of well over $100 thousand which is a lot considering the fact that back then, the pumpers were spreading their optimism for what was basically a shell company. The results were pretty predictable: the ticker did jump when the increased demand pushed the price up, but the support was rather short-lived and it was soon back where it started.
Throughout the months to follow, VGTL‘s share price was supported by nothing more than exciting news and press releases and the ticker’s behavior was unpredictable at best, but since July 15 it has been on a massive winning spree with no less than nine sessions all ending on a positive note. It’s been a while since we wrote about them so we decided to see what they’ve been up to during the last year or so.
Well, at the end of the 2011 fiscal year they signed a nationwide distribution agreement with an unnamed entity for the installation of Internet Kiosks in designated locations throughout the US. This would have been VGTL‘s entry point into the internet gaming business , but unfortunately, they weren’t happy with the way things were going and they soon decided to ditch the contract.
Then, during the third quarter of the fiscal 2012 they signed a Letter of Intent for the acquisition of charitable video entity which supposedly had manufacturing capabilities, as well as licensing and distribution agreements in place. Despite that, the target acquisition failed to comply with VGTL‘s conditions and shortly after that, the merger was called off.
There was yet another agreement for the acquisition of yet another internet gaming company which also held some distribution, licensing and maintenance agreements. Once again however, the transaction was terminated due to failure of the candidate subsidiary to comply with all the terms outlined in the contract.
Having all that in mind we were rather surprised to see that VGTL have generated around $42 thousand in revenues during the twelve months ending in March, but when we scrolled down a bit further, we found that this amount was logged when VGTL briefly took over the operations of the second target acquisition (the charitable video venture) and since the contract has now been terminated, we won’t see money from this business in the reports to come. As for the rest of the financials, here’s a quick summary of them as found in the 10-K:
- cash: $30 thousand
- current assets: $37 thousand
- current liabilities $549 thousand
- quarterly net loss: $3.3 million
So, what does all this mean? Well, it means that VGTL are in a pretty poor financial state at the moment and it also means that they have yet to present us with a steady stream of revenues. They seem to be battling that and last week they came up with an announcement that they have completed negotiations with not one but several companies working in the internet gaming industry, only this time, instead of acquiring the smaller ventures, they plan to work with them and share the revenues. This is all well and good, but as of right now, nothing official has been signed and having seen what happened last time they had agreements with other business entities, we would like to reserve our right to remain just that little bit skeptical. Especially when having in mind that no more than a month ago, VGTL had just one employee.
Yet another thing to have in mind before making your final investment decision is the fact that quite a lot of common stock saw the light of day as settlement for debt and it was valued at just $0.10 per share which is quite a discount when you have in mind that VGTL closed Friday’s session at $0.92. If someone decides to sell those holdings, he could be in for quite a profit but in the meantime, the price will take a beating and VGTL‘s chart might start to look a lot like the ones of Xumanii, Inc. f/k/a Medora Corp (OTCMKTS:XUII) and Sanborn Resources Ltd (OTCBB:SANB), despite the fact that the ticker doesn’t appear to be pumped at the moment.
