Dow Jones 10755.12 48.98 7:43 am PDT, June 14, 2006 NASDAQ 2081.55 9.08 For info, visit access.smallcapnetwork.com S & P 500 1226.31 2.62 Change your subscription status here Russell 2000 678.90 3.55 VOLUME 06: ISSUE 45 The Tipping Point Tipping point: noun. the culmination of a build-up of small changes that effects a big change (Source: Webster's New MillenniumTM Dictionary of English Copyright © 2005 Lexico Publishing Group, LLC) Have you ever had the feeling that something was going to happen, but a specific amount of time had to pass before it actually transpired? For instance, in football, it's possible for the game to effectively be over, even in the last couple of minutes of the contest - if the winning team controls the ball. However, the referees still make the teams play out every second of the game, so it can become 'official'. Well, that's kind of how we feel about On The Go Technologies (OTCBB: OGHC). They're on the verge of winning the big game...it's just a matter of time. To be specific, On The Go Technologies took a giant leap towards profitability. For their third fiscal quarter, which ended on April 30th, the company improved revenues by 578% compared to the same quarter last year. Yeah, that's right, 578%! On The Go reported $8.9 million in sales for Q3 of 2006, well above 2005's Q3 sales of $1.5 million. And in case you were wondering if sales in Q3 of 2005 were unusually low, they weren't. In fact, that particular quarter was also considerably stronger than 2004's Q3, when the company posted revenues of $1.0 million.  So the quarter was a one hit wonder then? Not quite. Over the last nine months (3/4 of their fiscal year), On The Go has raked in $22 million in sales, for a whopping 688% improvement over the same nine-month period from the prior fiscal year. In other words, the company is consistently putting up these huge numbers. Revenue, though, isn't the exciting part - at least not the most exciting part. We're excited to see just how close On The Go is to turning a profit. For their 3rd fiscal quarter, the company narrowed the net loss (per share) to $0.01. A year ago, the quarterly loss was $0.20. OK, you might argue a loss is a loss, regardless of the size, so a little context may be called for. The total dollar net loss for Q3 was only $79,291. Think about it...that's less than 1% of the total revenue for the same quarter! Seeing how well the company has managed to consistently improve top lines, we have to think bottom lines are right on the verge of turning from red to black.  That's what we mean by the 'tipping point'. On The Go Technologies is, as Webster defined it, turning many small changes into one major change. In this case, all the hard, incremental work being done by CEO Stuart Turk is close to paying off, as the company finds itself on the cusp of profitability. If things continue as they are at On The Go (and we think they will), profitability is only a matter of time. For investors, it's the tipping point - when the stock is no longer a curiosity, but an exciting, viable enterprise. The only question to ask is when is the best time to buy? Once they start turning a profit, it may be tough to get shares at current prices. The right time to buy is before everybody else figures out the triple-digit increases in revenue are starting to translate into earnings.  Revenues, Where have You Been All My Life?  Obviously something changed for On The Go Technologies. A 578% increase in revenue is no fluke. But why now? Where is all this newly found cash flow coming from? The question is best answered by the man himself - On The Go President and CEO, Stuart Turk. At the same time the revenue and earnings news was released a few moments ago, he added, "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 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." In plain English, the two acquisitions are making them more money than they're costing them, which is a breath of fresh air in a 'growth at any cost' kind of world we live in. Plus, it costs the company little (to nothing) to add another revenue source, since their infrastructure is already in place. And as he stated, there are plenty cross-selling opportunities among existing customers. Did you catch the part about pro-forma profits? Yeah, we did too. In some circumstances the term 'pro forma' is used to veil true results. In this case, however, we really think it's a sign of GAAP profits being just around the corner. We're convinced On The Go has the right management team in place, and has the right business model, to keep repeating their recent success. We've just seen too much improvement (heck, a complete turn-around) here to assume anything else. Getting In On The Action  We first started covering OGHC on May 23rd, when shares were at $0.19. Recently, they've been hovering around $0.13. While we'd love for all of our picks to go straight up after we publish them, this 6 cent dip doesn't concern us. If anything, we view shares as being even more undervalued now than they were then.  As we discussed in our initial profile of On The Go, the time to buy stocks (or anything, for that matter) is when nobody else seems to want them. The time to sell stocks is when everybody else wants them. It's no secret technology stocks have been lagging all year long. It's also no secret technology stocks are still well under their highs from the peak in 2000, which means there's still enormous upside potential for recovery gains. Simultaneously, and despite the company's stellar results of late, nobody seems too excited about OGHC. They will be though. When tech finally starts to perk up, and On The Go starts to turn profits, you can bet investors will get real interested, real quickly. So the question to ask yourself about the stock is simple. Do you want to get in at the bottom, or do you want to chase it once it takes off? One last thing to think about - the pace of earnings improvement, and the current price. On The Go turned a 20 cent loss into a 1 cent loss in their fiscal third quarter. The company just lost a penny per share in Q2 as well. In their first fiscal quarter this year (ending 10/31/5) the net loss was again $0.01. See the trend? This most recent quarter was no accident; the company is pulling itself up by its bootstraps. Not that the price-to-earnings ratio should be the final determinant of a stock's value, but do a little hypothetical math here. If On The Go can improve their quarterly earnings by just a nickel, the P/E ratio is right around 3 (on a quarterly basis)! For some perspective, they just improved last quarter's per-share earnings by $0.19. You already know about the colossal revenue increases. From an investment standpoint, it just seems like the potential reward is far greater than any risk.   On The Go Technologies Q3 Revenue Up 578% To $8.9M Company Attributes Strong Quarter to Recent Acquisitions  Concord, ON, Canada, June 14, 2006 -- On The Go Technologies Group (OTC Bulletin Board: OGHC), an advanced systems integrator and value-added reseller (VAR) of information technology solutions, announced today that revenue for the third fiscal quarter ended April 30, 2006 increased 578% to $8,879,319 compared to the same quarter last year and 27% over the prior quarter.  Net loss for the quarter was ($79,291), or ($0.01) per common share, compared to a net loss of ($379,027), or ($0.20) per common share, in Q3 '05, an overall decrease of approximately $300,000. Adjusting for debt discount expense of $340,000, the company realized net income for the quarter on a pro-forma basis of approximately $261,000 or $0.02 per share. The debt discount costs are non-cash expenses related to long-term debts amortized over the life of these loans.  Revenues of $22,086,515 for the nine months ending April 30, 2006 increased 688% over the same nine-month period in 2005.  The cost of sales in fiscal Q3 '06 increased to $6,763,737, compared with $1,000,099 in the same period in 2005. G&A expenses rose from $723,541 in Q3 '05 to $1,794,269 in fiscal Q3 '06. The increase in both categories was attributable to the acquisitions of Infinity Technologies, Island Corporation and Solutions in Computing as well as the addition of new personnel. OTG President and CEO Stuart Turk said, "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 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. We intend to continue building the company's asset base and sales generation capacity as well as shareholder equity." About On The Go Technologies Group On The Go Technologies Group is an advanced systems integrator and value-added reseller of information technology hardware and software solutions to a wide range of industries. The company provides high-end information technology products and services through multiple operating divisions. On The Go's six divisions maintain more than 125 authorizations and certifications from leading technology companies. On The Go provides a seamless extension of a client's supply chain through expedited delivery services, centralized billing, vendor management, discounted pricing schedules and onsite integration services. Clients include Fortune 500 companies in the financial, healthcare, entertainment, scientific research, education and printing industries throughout North America . For more information, visit http://www.oghc.com or http://www.onthegohealthcare.com/video.  An investment profile about On the Go Technologies Group may be found at http://www.hawkassociates.com/onthego/profile.php . For investor relations information regarding On the Go, contact Frank Hawkins or Julie Marshall, Hawk Associates, at (305) 451-1888, e-mail: info@hawkassociates.com. An online investor relations kit including copies of On the Go press releases, current price quotes, stock charts and other valuable information for investors may be found at 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 contains 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.   Company Contact: Al Kau (888) 795-3166 (California) al@thesearchforvalue.com Investor Relations Contact: Hawk Associates Inc. Frank N. Hawkins, Jr. or Julie Marshall  Phone: (305) 451-1888 Email: info@hawkassociates.com   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 New Name for NeWave Within the next few days, look for NeWave (OTCBB: NWWV) to become 'Commerce Planet'. The name change will include a new ticker symbol, which is yet to be assigned. However, current owners of NWWV shares won't need to take any action as part of the switch. The registrar and your brokerage firm will make any necessary changes for you. The decision to change the company's name will coincide with the announcement of a detailed strategy emphasizing ongoing expansion, and further earnings growth.  Materially, we don't expect the name change to have much impact. But from a psychological and public relations perspective, any action that creates a buzz or media interest is a positive. In that light, the company may be able to use the news as a platform to spread the word about what the company does, and why the stock might be a good investment opportunity.   U.S. Dollar: Overextended? This week marks the fifth week the U.S. dollar has strengthened against most other major currencies, including two big ones - the yen and the euro. The euro/dollar conversion rate ended at 1.2548 on Tuesday, well under the peak of 1.2979 from earlier this month, and equally under the high of 1.2972 from mid-May. The dollar/yen exchange was 115.29 at the end of trading on Tuesday, and well above the 108.93 level touched in mid-May.  While the sawbuck's bullish momentum is respectable, we're looking for the dollar to take a break here, and even ease back a bit. It's currently overbought to sustain this pace. We'll set a short-term target of 112.70 for the dollar/yen, and a short-term target of 1.27 for the euro/dollar. After that, we'll have to reassess. The catalyst for the dollar's renewed strength has been continued worries of inflation forcing the Fed to keep pushing rates higher. That part is actually true - sustained inflation is indeed going to force the Fed to tack on a couple more rate hikes. However, some Forex speculators seem to be forgetting that rate-based currency moves tend to be predictive, rather than reactive. In other words, the last five weeks worth of a bullish dollar effectively 'builds in' what the Fed may do with rates over the course of the summer. So, the best part of the move may already be history. If anything, the strong upward pace of the dollar is setting up a slight pullback.  That said, keep any Forex trades on a short leash right now. Euphoria can be dangerous. 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. To ensure newsletter delivery, you can add any additional email addresses you may have to the SmallCapDigest Member List. Receiving the SmallCapDigest Newsletter in multiple locations is the best way of making sure you don't miss the next investing or trading opportunity! For web based email addresses, the SmallCapDigest recommends @yahoo.com or @aol.com for timely and reliable email newsletter delivery. Subscribe Here Note: Your email address will be kept strictly confidential, and will not be shared with any other entity for any purpose at any time. If you no longer wish to receive the SmallCapDigest, simply follow the instructions located at the bottom of every SmallCapDigest Newsletter Edition. Unsubscribe Here D I S C L A I M E R: The Small Cap Digest, the Small Cap Network, its website and email newsletter (hereafter, cumulatively referred to as "SCD") , is an independent electronic publication committed to providing its readers with factual information on select publicly traded companies. SCD is owned and operated by TGR Group, LLC ("TGR"). TGR is not a registered investment advisor or broker-dealer. All companies are chosen on the basis of certain financial analysis and other pertinent criteria with a view toward maximizing the upside potential for investors while minimizing the downside risk, whenever possible.  Moreover, as detailed below, TGR accepts compensation from third party consultants and/or companies, which it features in the publication and circulation of SCD. 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 1,000,000 shares 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 $60,000 by NeWave for coverage of the company. In addition, one of the principles of TGR Group LLC is also a principle of MarketByte LLC. In a separate contractual relationship in 2004, MarketByte LLC was paid a fee of $25,000 in cash and 750,000 newly issued, restricted shares by NeWave for coverage of the company. The aforementioned shares are all currently eligible to be free trading. The term of MarketByte's obligation to NeWave has expired. From time to time TGR sells shares received as compensation for coverage of client companies. Shares received are sold in the open market. Since the shares are received as compensation for services as previously disclosed, and not for investment purposes, TGR does not view the sale of the shares as contradictory to any opinions delivered in the content. This should be viewed as a conflict of interest by shareholders or prospective shareholders of the client companies.  TGR, its Members and Members' families, are forbidden by company policy to own, buy, sell or otherwise trade stock for their own benefit in the companies who appear in the publication unless specifically disclosed.  All statements and expressions are the sole opinions of TGR and are subject to change without notice. A profile, description, or other mention of a company within SCD is neither an offer nor solicitation to buy or sell any securities mentioned. While we believe all sources of information to be factual and reliable, in no way do we represent or guarantee the accuracy thereof, nor the statements made herein.  THE READER SHOULD VERIFY ALL CLAIMS AND DO THEIR OWN DUE DILIGENCE BEFORE INVESTING IN ANY SECURITIES MENTIONED. INVESTING IN SECURITIES IS SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK. THE INFORMATION FOUND IN THIS PROFILE IS PROTECTED BY THE COPYRIGHT LAWS OF THE UNITED STATES AND MAY NOT BE COPIED, OR REPRODUCED IN ANY WAY WITHOUT THE EXPRESSED, WRITTEN CONSENT OF TGR.  We encourage our readers to invest carefully and read the investor information available at the web sites of the Securities and Exchange Commission ("SEC") at http://www.sec.gov and/or the National Association of Securities Dealers ("NASD") at http://www.nasd.com. We also strongly recommend that you read the SEC advisory to investors concerning Internet Stock Fraud, which can be found at http://www.sec.gov/consumer/cyberfr.htm. Readers can review all public filings by companies at the SEC's EDGAR page. The NASD has published information on how to invest carefully at its web site.