Finding it difficult to draw interest to its stock dumping scheme among the penny stock faithful, Axiologix turns to radio ads to find fresh pigeon meat.
February 9, 2015: For several days, we had heard reports of an Axiologix, Inc (AXLX) stock promotion on the radio, in the form of paid advertising. Last night we heard the pump as a 30 second spot, through the airwaves of Los Angeles, for ourselves. The ad touted AXLX's VOIP technology and suggested that the stock was a buy.
It occurs to us that some prmay be enticed to conduct some research on this company, having been seduced by uninformative recommendation to consider the stock as an investment. To those people who have had the epiphany that real companies don't pump their stock--you've never heard Google take out ads promoting its shares--let us help you with your due diligence:
AXLX is a scam.
The above is not just an opinion. This is not an attack on the company's operations or lack thereof. This is just a statement regarding the scarcity of value in the company stock that is foisted upon an ignorant public. We offer the following facts for your consideration.
1) AXLX stock has been the subject of at least 7 email promotion campaigns since June 2012.
There is only one reason to pump a stock: to generate buyers for those who wish to sell. During the course of those 7 Pump & Dump campaigns, the share price has dropped 99.25%, while the number of shares outstanding has increased by a whopping 16,600%, growing from 526,436,036 shares issued and outstanding to 88,095,896,000 shares. (all number split adjusted; see below) We estimate the retail investors have lost well in excess of $100 million over that period of time.
2) AXLX stock was reverse split one for 2,000 during April 2014.
A reverse split has the effect of giving a shareholder one new share in exchange for several old shares--in this case one new share for 2,000 old shares. It is a common tactic employed by companies whose stock has saturated the market during these programs to enrich insiders. At the time of the reverse split, the billions of existing shares prevented the market for AXLX shares to rise above the rock bottom bid/ask of $.0001/$.0002. A reverse split eliminates most if not all of the retail investors' shareholdings, while insiders concoct reasons to issue themselves new stock so that they can begin the Pump & Dump scheme anew. The immediate effect of the reverse split was an AXLX share price of $.40 ($.0001/2000 = $.40) with just over 3 million shares issued and outstanding. Since that reverse split, the share price has dropped 96% while the number of shares outstanding has increased no less than 1466% to at least 44,047,948. The intent to generate even more shares has already been announced.
|Chart of AXLX Share Price Since Reverse Split|
3) AXLX owns practically nothing
A look at the company's own financials quickly reveals that their limited revenues are more than wiped out by the cost of doing business and that AXLX operates deep in the red. The latest reported revenues has the company operating at a loss of $2.2 million for the quarter. As those same financials list a mere $4,720 in the bank, the only currency available to the company is its stock, which means we can expect hundreds of millions, if not billions, of more shares to be created and guaranteed to be dumped into the market, further degrading the share price.
As for assets, you might ask, "what assets"? $151K of some depreciated equipment make up the lion's share of all assets listed with a total value of $216K. These of course pale next to the $7.2 million in liabilities reported by the company.
4) AXLX's auditors are in big trouble
Like many of these bogus companies built solely for the purpose of dumping stock, AXLX employs M&K CPAs, LLC as their auditor. The credibility of this firm was recently cast into doubt when the SEC announced that charges have been be levied against them for their part in a scheme to register several phony mining companies. According to the SEC, M&K CPAs was retained by banned attorney John Briner and his partner-in-crime, attorney Diane Dalmy, to generate fraudulent audits to aid the scheme. “Attorneys and auditors have a serious obligation as gatekeepers to protect the integrity of our markets, and the individuals we’ve charged in this case failed the investing public in their roles,” said Sanjay Wadhwa, Senior Associate Director for Enforcement in the SEC’s New York Regional Office.
There would be no reason to believe that M&K CPAs' services to the perpetrators of the AXLX scheme would be above suspicion.
5) AXLX CEO Vincent Browne is no stranger to penny stock schemes
In addition to the debacle created at AXLX, Vincent Browne also ran Flint Telecom Group, Inc. (FLTT) another company purportedly involved in VOIP technology and which was also subjected to a series of Pump & Dump campaigns. AXLX claims that under Mr. Browne, FLTT reached a total of $34 million in revenue in 2010, but fails to note that according to their own financials, FLTT still ended up with a net loss totaling $28 million. Not surprisingly, FLTT is now a dormant shell, having failed to file any financials since September 2012. Also noteworthy is that a civil case was filed against FLTT and specifically Browne by Tangiers Investors, L.P. in Los Angeles, alleging three counts of breach of contract, fraud and deceit, and securities fraud. This was just one in a series of lawsuits alleging similar causes of action against FLTT and Browne.
If these facts don't convince potential investors of the incredible risk of betting on AXLX then we suggest that they consider buying shares. Mr. Browne and his cohorts would certainly appreciate the cash.