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Alliance Creative Group Inc (OTCMKTS:ACGX) Surprises The Market

Alliance Creative Group Inc (OTCMKTS:ACGX) Surprises The Market
Written by
Jarrod Wesson
Published on
March 1, 2018
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Judging by the bull action in ACGX’s stock price, it’s time to again have a closer look at Alliance Creative Group Inc (OTCMKTS:ACGX). The market is finally reacting very positively to a large array of good news released in 2017. While paying a large amount of its debt, ACGX is also reporting record revenue, selling assets, and continues to show little debt on the accounts. Shareholders should be really appreciating the work of management.

In line with this beneficial news in the new year 2018, the stock price suggests that the upward trend could continue for a long time. In addition, trading volumes in the stock have improved, which indicated that the investors have started to take note of the stock’s prospects.

YTD chart for ACGXWith the stock trading at the $0.002 handle, it needs to close above the $0.003 handle to breakout higher. On the downside, we believe that it is unlikely, but the stock could decline to $0.0010 if the support of $0.0015 is crossed. Be ready, because the price is at critical levels. The following price action will determine the future developments in April and May 2018.Before we look at the announcements that appear to have strengthened the stock confidence in ACGX, let us look at the activities of the company.BusinessAlliance Creative Group, Inc. focuses on product development, logistics/transportation, digital marketing & engagement, and software development. The company has been helping its clients connect its products and services to its customers since 1997. It is an old player with a lot of expertise accumulated.https://youtu.be/507c_AKMP0EIf it is the first time that you are reading about this name, it will be beneficial to read our previous coverage. You will not only find more information about the services provided, but also an assessment of the incredible revenue performance of ACGX.In this piece, we will provide the most interesting catalyst for this name. It will help the market understand why the shares are taking off.1. Deb reductions and Potential M&AIn May 2017, the company reduced another $100,000 of debt and $300,000 in the second quarter ending June 30, 2017; more debt reductions are expected since negotiations with debt holders continue. As a result, shareholders are seeing how their financial risk diminishes and the intrinsic value of the stock increases. Check the following words of the management:

"Now that we have achieved certain internal goals we have to continue and increase our aggressive pursuit of executing our business plans, reducing debt, and increasing overall shareholder value for everyone. " said Paul Sorkin, COO and General Counsel.

Additionally, it is very critical to draw the attention to the following words:

"We are also still in discussions with multiple parties about potential mergers and/or acquisitions and hope to find another good fit to help accelerate our growth. We will continue to share news via social media and by press releases as things progress." said Paul Sorkin, COO and General Counsel.

Is the company preparing some type of transaction to enhance shareholder value? If this is the case, it would be quite beneficial. We will need to stay tuned to this name. The company seems to be really concerned about taking care of the shareholders. It is a pleasure finding such type of companies.2.New Agreements with other players sustain ACGX growthOther companies are interested in ACGX. On June 1, 2017, the company recently formed a partnership with Abcon Products, an industry-leading manufacturer that supplies plastic packaging solutions for produce and packaged food needs. The agreement was said to be very beneficial for both companies. They will be able to provide quality clamshells and other related products to the largest food distributors and retailers in the U.S. while increasing capacity and sharing valuable resources to provide a better overall customer experience. The agreement is meant to be a great catalyst for the growth of both operators:

"We have had a mutually beneficial relationship with Alliance Creative Group and we are looking forwarding to leveraging their 6 strategic warehouses East of the Mississippi including New York, Massachusetts, North Carolina, Florida, Wisconsin and Illinois, and finding ways to speed up the growth of both of our companies." said TJ Sprague of Abcon Products.

3.New ProductsIn June 2017, the company presented new packaging for the Crossfuel Extreme Performance Black series. The folding carton has 4-color glossy UV coating, die cut and is glued to create a combo pack to fit 3 different items. Despite being introduced as a new standard of the next generation science and extreme performance nutrition, the market will need to wait a bit more to see if this is a game changer. The following are the most meaningful words from the balance sheet:

"After years in development Crossfuel Black reveals the world's most cutting edge formulation and clinically studied ingredients. The Ripped Muscle Stack product is a 60-day transformation kit to rapidly boost your free testosterone. " Source

4.Revenues keep surprisingRevenues for the quarter ending September 30, 2017, has increased by 94% as compared to the same quarter in 2016. They were worth $4,550,757. Additionally, gross profits also increased by 41% amounting to $802,550. The net income for the quarter was $32,026 compared to a loss of $55,457 for the quarter ending September 30, 2016. On the top of it, the total amount of assets increased by 22% amounting to $6,676,087, while the long-term liabilities were reduced by $183,785 in the 3rd Quarter ending September 30, 2017.Will this performance continue in the future? This is never a sure bet, however, the words of the CEO of the Alliance Creative Group, Steven St. Louis, were optimistic:

"Our team continues to work very hard to execute our business plans and every quarter it becomes more obvious internally that we are making significant strides towards our goals. Although all growth comes with challenges I feel very confident that we are making positive changes and I see continued progress in our future." Source

What about the Litigation with Golden State Equity Investors, Inc.?Those following the stock for some time should be remembering the litigation with Golden State Equity Investors, Inc. Regarding this dispute, there is also good news. The lawsuit between Golden State Equity Investors, Inc. and Alliance Creative Group, Inc. has been dismissed. Read the following details:

"The parties both had claims against each other in the U.S. District Court of Southern California. In exchange for some preferred equity shares in ACGX, an existing investor has agreed to purchase the potential rights Golden State may have had in the financing instruments. This exchange agreement will allow the company to retire the debt in full and dismiss the lawsuit." Source

ConclusionCurrently trading with a market cap of $4.3 million, ACGX is an exciting story among small caps. In addition to all the previous developments, we need to remark the PeopleVine, Inc.'s spun off. Despite having 3,364,375 shares or 33.43% of the overall company, PeopleVine, Inc. is now a separate entity. This transaction is meant to bring liquidity to ACGX and should be celebrated by the market as more information comes out.Be sure to check out our coverage on ACGX!We will be updating our subscribers as soon as we know more. For the latest updates on ACGX, sign up below!Disclosure: We have no position in ACGX and have not been compensated for this article.Image courtesy of KMR Photography via Flickr

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