ACGX .003 News Came out earlier than 5/15, Surprised investors very recently by releasing better than expected 1Q 2017 earnings. The market reaction was so intense that the editorial team decided to research the company. We found out that this digital marketing agency is not only delivering outstanding earnings, but also showed up a solid balance sheet. Also, the amount of shares outstanding is very reasonable. Have a look at the price movements. We will tell you more in just a minute.
“Alliance Creative Group is currently a creative packaging and digital engagement company that has been helping clients connect their products with customers since 1997. ACG achieves this by creating, assisting or managing the creative process, print and packaging services, and the digital engagement experience.” Source
The company offers its services from many locations across the United States:
Source
It has developed several different brands to bring its services:
– PeopleVine: includes CRM, marketing and sales software.
– Print4aCause.com: provides marketing materials to business cards, envelopes, appointment cards, and greeting cards for business entrepreneurs and companies. We encourage investors to check the website.
– CorporateGifts4aCause.com: provides branded gifts and other products for companies.
Recent developments
1Q 2017
The most covered news was the recent earnings announcement made on April 3, 2017, so we assessed these numbers. According to the company, gross revenues for the first quarter of the year was $5,000,000, which “exceeds the most recent projections by almost 10%“. The fact that these figures were better than expected is what excited traders and explains the recent upside in the share price. However, we need to check what is going on with the other financial figures. Here are the numbers:
Revenue: $5,117,436
Cost of Goods Sold: $3,237,212
Gross Profit: $1,880,224
Net Income: $392,655
We were glad to see that the company showed a profit at the end of the quarter. At the end of the day, showing great revenues does not fit for anything if the company is not able to adjust costs to deliver profit. We checked most of the financial figures reported and we did not see anything remarkable to note. It was a good quarter. The company did a good job, and traders profited from the market move. Furthermore, the balance sheet was also disclosed. These are the most relevant numbers:
Account receivables: $2,630,974
Inventory: $1,387,157
Total Assets: $7,019,459
Accounts Payable: $2,000,513
Total Liabilities: $3,901,205
Total Equity: $3,118,254
Shares Outstanding: 1,238,961,054 shares
Additionally, the balance sheet looks stable. The company is financing its operations with the help of its providers and the company did not issue an absurd amount of shares. All looks goods on this side. The most relevant reaction to these financial figures from the business executives of ACGX was said by the COO and General Counsel of the Alliance Creative Group, Paul Sorkin:
“We are very proud of our team’s significant accomplishments. The $5,000,000 threshold exceeded all of our internal goals. Many of our projects are progressing well and we hope to have continued success moving forward. Our top priorities continue to be focused on growing the overall company, diversifying our revenue streams, and leveraging our shared resources while looking for ways to grow faster and create long-term value for our shareholders, investors, and employees.” Source
Everything looks good, but what about shareholders dilution?
Start-ups in general finance their operations using equity and sometimes convertible debt. That is a fact. Traders looking for more boring returns and not willing to get exposure to dilution risks may be more interested in other more mature businesses. This is a company that is delivering outstanding returns. Thus, the securities involve some risks.
The company was able to obtain financing from investors issuing the following loans:
Note Payable – Golden State debenture: $128,112
Note Payable – Auto Loans: $40,530
Note Payable – STL Notes: $234,763
Convertible Notes: $234,763
That is a lot of money. Isn’t it? Yes, but as compared to the amount of assets that the company was able to obtain and generate is not; that is $7,019,459 in total assets. Hence, the risk of shareholder dilution is low as we don’t expect that noteholders will convert their shares and exit the company.
Conclusion
The company recently released its financial figures, which were widely covered and celebrated by the investment community. We made an assessment of the recent figures released as well as the financial situation of the company and we saw that the perspective was also positive. In addition, we checked the amount that the company received in the form of convertible notes and saw that it was low as compared to the amount of assets owned. We concluded that noteholders will not convert their securities yet, as the financial situation of the company is good. Hence, the dilution risk is low at the moment. To sum up, there is a lot to like in this company, thus we believe that investors need to stay alert and on top of the latest developments which can drive the share price.
