Q2-2014 explained by Accounting Master Funtrader1
Convertible Debt now at $460k, down from $1.4mil reported in 1st Quarter 2014
The majority was due to Chris Carey assuming $745k in convertible debt and converted that debt into borrowed funds “Note charging 8% annual”, 2nd Q 2014. click here under “Subsequent Events” pg 10.
2nd Q 2014 vs 2nd Q 2013
Gross Revenue up $140.6k >> from $6.4k to $147k an increase of 2,197%
Total Assets up $135k >> from $62k to $197k an increase of 218%
Cash on hand up $160k >> from $8k to $168k an increase of 2,000%
Outstanding common shares up 900M >> from 1.2B to 2.1B an increase of 67%
Total Liability up $5.3mil >> from $1.4mil to $6.7mil an increase of 379%
Mainly due to the increase in *derivative liability of $5mil from $120k to $5.1mil
*No need to panic since “derivative liability” are expenses associated with future expansion without the benefit of revenue.
If the current liability increases by $5.3mil and the current assets didn’t, I would say run for the door, but that is not the case here.
In the accounting world derivative liability is a leveraging tool for “hedging” future financing for companies with a business model for expansion. With this kind of increase there is major growth and an increase in business on the horizon.
It is very important to note that the majority of this reported increase in derivative liability actually occurred between the 1st and 2nd quarter this year and not from 2nd Q 2014 vs 2nd Q 2013. Most accountants myself included, only utilize annual report comparisons when it pertains to derivative liability since it is used as a long term tool, not short term.
The fact that AXCG has reported this unusually high derivative liability change in such a short period of time indicates major changes are already in the works.
2nd Q 2014 vs 1st Q 2014
Gross Revenue up $64k >> from $83k to $147k an increase of 44%
Total Assets up $109k >> from $88k to $197k an increase of 124%
Cash on hand up $163k >> from $5k to $168k an increase of 3,260%
I have been and continue to be a long on AXCG and any dips below .001 are a buying opportunity.
AXCG is a long players dream.
