Dow Jones 11478.88 -19.21 6:54 am PDT, September 13, 2006 NASDAQ 2214.83 -0.99 For info, visit access.smallcapnetwork.com S & P 500 1312.67 -0.44 Change your subscription status here Russell 2000 724.48 +0.00 VOLUME 06: ISSUE 71 On The Go Is...Well, On The Go We knew things were going well for On The Go Technologies (OTCBB: ONGO), but wow! After doing some math with their tentative full-year 2006 results (their fiscal year ends in July), we'd have to say 'going well' is an understatement - things are just plain incredible up in Ontario. The company is set to post record-breaking revenue when the official annual results are released by the end of October. All we know right now is that they're upwards of $30 million, which easily tops last year's total of $5.57 million, thanks to some key acquisitions. And just wait till you hear what kind of revenue they're expecting for fiscal 2007. Can you say '30% increase'? Well, they can, and just did. Better still, 2007 may be the year On The Go moves out of the red and into the black. Investors take note.  To tell the truth, we're not shocked about the news...nor should regular readers be surprised. Since our initial profile in May, all of the big news from On The Go has centered around the successful (i.e. profitable) acquisitions the company has been making. While we'd like to take credit for a solid description of how On The Go got from point A to point B, the best way to explain it is to repeat what we said in our June 14th coverage of the company's amazing third quarter. Per On The Go President and CEO, Stuart Turk, on their 3rd quarter results...  "The strong revenue increase this quarter reflected the successful acquisitions of Infinity Technologies in July 2005 and Island Corporation and Solutions in Computing in January 2006. Our resulting ability to cross-sell among our five VAR (value added reseller) divisions [there are now six divisions] has created valuable new opportunities. When adjusted for non-cash expenses related to debt discount costs, our operations during the quarter provided a net profit on a pro forma basis which we believe is indicative of the strong progress we are making not only from acquisitions but also from organic growth and targeted IT sales and service initiatives coming to fruition."  As we also pointed out in that same edition, the acquisition of Island and Infinity wasn't just some crazy idea that ended up costing the company more money than it added to the bottom line. As it should have, the combination of all six divisions created a revenue synergy, while simultaneously reducing costs. Smart business, right? Well, while it seems obvious, you might be surprised how many companies forget the whole point of being in business is to increase sales and decreases expenses. The result of being able to do so is (drum roll please)...profits. On The Go never lost sight of that. And speaking of turning a profit...    The Tipping Point, Redux We talked about the 'tipping point' back in June, in reference to the company's progress towards profitability. On The Go had reduced their Q3 per share loss from 20 cents to just 1 cent. More impressively, the company's total Q3 loss was just 1% of total revenue for the quarter. Point being, you could sense a swing to profitability was just around the corner.  Well, we still smell profits around the corner, as On The Go is making good on its synergy opportunity. How? As part of today's revenue announcement, the company also announced a $1.4 million reduction in debt during fiscal 2006, as well as a $1 million reduction in overhead. Do the math here...lowered costs, increased revenues...at this rate, it's only a matter of time.  In fact, CEO Stuart Turk - who probably has a better feel for it than anyone else could - sees the same profitability scenario in the works. In his statement within the press release, he comments "We have experienced exceptionally strong performance in revenue and in our ability to trim costs to produce a healthy bottom line...We believe our dedication and passion will ensure that OTG continues to thrive, hitting that $40 million sales projection and becoming a profitable entity."  What else can be said? What else needs to be said? The company is doing exactly what they said they would do. And where the company goes, the stock will eventually follow. Ergo, we like the company based on its progress towards profits...although we still contend the best time to buy shares of any company is before the company makes it 'official' - it's really too late to enjoy the full benefit after that point. While On The Go hasn't tried to subtly hint (as far as we could tell anyway) that Q4 of 2006 would be the quarter to finally push shares to the other side of their proverbial tipping point, the company is still sending a pretty clear message about what they expect to achieve in 2007.    The Stock - A Bargain In The Making When we last looked at ONGO shares in June, they were trading around 13 cents. To reiterate a point made then, the loss of one cent per share in their Q3 of 2006 was a 19 cent improvement over the Q3-2005 loss. Assuming an earnings trend was in place - and apparently it is - meant even just another 5 cents worth of improvement would bring the annualized P/E ratio to an uncanny reading of less than 1.0, which is a bargain by anybody's standards.  Since then, the stock has undergone a 50-to-1 reverse split, so what was then 13 cents would now equate to $6.50 per share. However, on a relative basis, nothing has changed - On The Go is still right on the brink of a swing to profit. Remember, the company only lost $79,291 last quarter, on $8.9 million in sales. That's less than 1% of revenue, so yeah, the company is still right on the verge of positive earnings.  Fast forward to today...while there's no direct mention of when, or by how much, the company expects to turn profitable, the numbers are clearly pointed in the right direction. And, we expect it to be soon. Just for the record, On The Go only lost $77,000 in Q4 of 2005, so the Q4-2006 bar is already set pretty low. Plus, keep in mind the Q4-2005 results didn't have the benefit of the Island Corporation acquisition, as it didn't happen until January of 2006. If On The Go can turn a Q3-2005 loss of $379,027 into a loss of only $79,291 in Q3-2006, just think what they'll be able to do with a loss of only $77,000 to contend with in the final quarter of their fiscal year. Throwing in what the company has already verified today about a big dose of debt and overhead reduction, and what you get is a very exciting opportunity. We think On The Go is still right at its tipping point, and now leaning in a positive direction. Shares could end up recovering in a big way once the story starts to spread.  Read the details for yourself...    On The Go Reduces Debt and Overhead Costs by $1.4M and $1M Respectively; Reports Record Revenue to Date in 2006  Wednesday September 13, CONCORD, Ontario -- On The Go Technologies Group (OTC Bulletin Board: ONGO), a leading multi-industry computer hardware, software and systems integrator, announced today that the company significantly reduced its debt and cut costs for 2006 fiscal year ended July 31. The company said record year ended revenue is in excess of $30 million. The company expects to report audited financial results for fiscal year 2006 before the end of October.  Financial and fundamental highlights are as follows:  Since January, OTG has streamlined its financial structure with a $1.4 million debt reduction and a $1 million decrease in wages and overhead costs.  In addition to record year ended sales exceeding the company's original $30 million target, the company is showing strong and steady growth in all operating divisions: OTG Enterprise, OTG Creative, OTG Healthcare and OTG Research. One of the company's latest acquisitions, Island Corporation (now part of OTG Healthcare/Research), has produced especially aggressive results in the medical diagnostic imaging and scientific research sectors.  OTG anticipates it will surpass $40 million in revenues for its 2007 fiscal year driven by continued organic growth and additional IT sales and service acquisitions.  With OTG's enterprise divisions Compuquest and Infinity Technologies well positioned in the Fortune 500 and SME marketplaces, the company's digital entertainment (OTG Creative) and medical community (OTG Healthcare/Research) sales divisions, Helios/Oceana, Solutions In Computing and Island Corporation, are strongly contributing to the company's product authorizations with increases in their active customers to 130 and 1,700 respectively.  OTG President and CEO Stuart Turk said, "We have experienced exceptionally strong performance in revenue and in our ability to trim costs to produce a healthy bottom line. OTG's management and board of directors remain committed to doing what they've always done best year after year -- bettering revenues and capital structure, building upon customer numbers and establishing an industry reputation for providing among the best in innovation and professional client solution packages. We believe our dedication and passion will ensure that OTG continues to thrive, hitting that $40 million sales projection and becoming a profitable entity."  About On The Go Technologies Group  On The Go Technologies Group is a North American corporation focused on acquiring versatile and profitable companies in the IT sector. OTG has established itself as a respected industry competitor through its six divisions: value-added resellers Compuquest and Infinity Technologies, which cater to Fortune 1000 clientele and vendors such as HP, Apple, IBM, SGI, Extreme Networks and Adobe; Helios|Oceana, a prominent systems integrator in the U.S. and Canadian entertainment and education industries; Island Corporation, compiling sophisticated digital solutions and networks for the medical community; digital entertainment authority Solutions in Computing; and Go Motion + Design, the company's complete in-house multimedia studio. The company's intention is to maintain sustained growth in the years to come via continued development in its existing divisions and an aggressive acquisition schedule. For more information, visit http://www.oghc.com or http://www.onthegohealthcare.com/video.  To view a company profile, visit http://www.hawkassociates.com/ongoprofile.aspx. To be added to On The Go Technologies Group's e-mail list for company news, visit http://www.onthegohealthcare.com/new_site/inv_pkg_form.htm and http://hawkassociates.com/email.aspx. For investor relations information, contact Frank Hawkins or Julie Marshall, Hawk Associates, at (305) 451-1888, e-mail: info@hawkassociates.com, or visit http://www.hawkassociates.com and http://www.americanmicrocaps.com.  This press release contains forward-looking statements that involve a number of risks and uncertainties. These forward-looking statements contain words such as "expects," "believes," "anticipates" and "intends." Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, but are not limited to, economic conditions affecting the B2B environment; continued ability to obtain hardware, software and peripherals at competitive costs; the company's ability to finance its planned expansion efforts; the company's ability to manage its planned growth; and changes in regulations affecting the company's business and such other risks disclosed from time to time in the company's reports filed with the Securities and Exchange Commission. The company does not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in management's expectations, except as required by law.   We Value Your Feedback   Got comments, questions or suggestions? Send 'em on over: Editor@smallcapnetwork.com If you wish to send a written request or inquiry, please send it to our physical address: TGR Group, LLC 4653 Carmel Mtn Rd Suite 308 #402 San Diego, CA 92130 Execute Sports Signs Major Snowboard Deal With European Distributor With all of the market's hot-and-cold activity recently, we haven't had much of a chance to review Execute Sports (OTCBB: EXCS). However, some big company news today merits a quick refocus on what's going on over in San Clemente, California. Execute, on behalf of their Academy Snowboard brand, just signed a multi-year marketing agreement with European sports gear outfit UDT. And we have to say, it's a pretty good deal for our favorite snowboard manufacturer. To read the rest, click here.    Xtreme Brings Aboard a Proven Boat Sales Expert as Sales Manager  Remember last week when we told you about some of the exciting changes Xtreme Companies (OTCBB: XTME) was undergoing? One of them was the acquisition of proven personnel. At the time, we were referring to the addition of Jack Clark as the new Chief Operating Officer. However, we also mentioned some other pending personnel changes. Well, earlier this week, Xtreme announced another victory in the personnel department - by naming Jeff Gayer as the company's National Sales Manager.  Who's Jeff Gayer, and is he really any different than any other sales manager? To answer the second question first, yes, he's uniquely well-suited for the job. As for why, the answer to the first question is the best response...Jeff Gayer has years of experience as a group sales executive with Brunswick, which just happens to be the world's largest manufacturer of pleasure boats. So, we have no doubt he's got the right experience to handle the job magnificently at Xtreme. To read the rest, click here.    Commerce Planet Picks Current Consultant As President Charles 'Charlie' Gugliuzza, who had been serving as a consultant to Commerce Planet (OTCBB: CPNE) was recently named President of the company. Current CEO Michael Hill chose Gugliuzza based on his contribution to the company's turn-around effort since May of 2005, when Gugliuzza came on board in a strategic advisor capacity.  His experience in internet commerce didn't begin with Commerce Planet. Gugliuzza was the co-founder of ebatts.com - an online battery retailer - where he increased the company's revenues six-fold while he was there. He's also a former lawyer. However, it's not like we need any convincing of his value...look at what the company as well as its stock has done recently. Whatever chemistry is in place, it's working. With Gugliuzza now fully integrated into the company, we expect Commerce Planet to move on to the proverbial 'next level'.  Michael Hill, who has also done an incredible job getting the ship steered in the right direction, will continue to helm the company as CEO.  The two obviously make a great team.    Novelos Gets Its Fifth U.S. Patent For NOV-002 Cancer Treatment Novelos Therapeutics (OTCBB: NVLT) recently announced their receipt of a notice of allowance from the U.S. Patent & Trademark Office regarding the composition and method of use of NOV-002...the company's primary cancer treatment. Or, to say it in plain English, Novelos' application to patent a slight improvement of (or use for) NOV-002 has been approved, further defending the company from someone else copying this amazing drug...and how it's used. It's the fifth such U.S. patent of their intellectual property of NOV-002.  As a reminder, their NOV-002 is an incredibly promising treatment of several types of cancer...and it's in phase 3 testing (the last stage before final FDA approval) as a treatment against lung cancer. In fact, the use of NOV-002 against lung cancer has been 'fast tracked' by the FDA, meaning the time required to get the drug pushed through as an approved treatment has been shortened.  To read the rest, click here.  Subscribe Information is power and timely information is profitable. Become informed and profit from SmallCapDigest Profiles and Trading Alerts by becoming a Preferred Member today. There is no cost associated with your email subscription. Add your email address below and make sure to check your email inbox and confirm your opt-in request to start receiving the SmallCapDigest Email Newsletter on a regular basis. 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To the degrees enumerated herein, SCD should not be regarded as an independent publication.  Click Here or go to http://access.smallcapnetwork.com/compensation_disclosure.html to view our compensation on every company we have ever covered, or visit the following web address: http://www.smallnetwork.net/profile_disclosure.html for our full profiles and http://access.smallcapnetwork.com/short_term_alerts.html for Trading Alerts.  TGR Group, LLC has been paid a fee of $30,000 cash and 20,000 shares (reverse split adjusted 08/09/06) of newly issued, restricted stock by On the Go Technologies Group for coverage of the Company. TGR Group LLC has been paid a fee of $30,000 and 300,000 newly issued restricted shares by Execute Sports for coverage of the company. In addition, one of the prinicipals of TGR Group purchased 100,000 shares of Execute Sports at a cost of $.25 per share prior to the public offering. 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