XTOG, SINX and EDIG Have News But Do They Have Viability?

Xtreme Oil & Gas (OTC: XTOG), Sionix Corp (OTC: SINX) and e.Digital Corporation (OTC: EDIG) are three small cap OTC stocks that recently issued press releases or had news for investors. Specifically, XTOG got a third part valuation that valued the company at $102,520,900 or $2.24 per share, SINX announced two multimillion dollar sales and EDIG announced a new license agreement with Canon. Of course, there is nothing wrong with small cap OTC stocks issuing press releases or updates about their activities. However, its also important to remember that just one well placed or well written news release from an OTC stock like XTOG, SINX and EDIG can send shares soaring (and likewise, cause them to sink). Hence, here is a closer look at all three to help you decide whether their recent news warrants further due diligence:

Xtreme Oil & Gas (OTC: XTOG) Gets a Third Part Valuation that Values the Company at $102,520,900 or $2.24 Per Share

Xtreme Oil & Gas engaged in the exploration, development, acquisition and production of crude oil and natural gas from properties in Texas, Oklahoma and Kansas. On Wednesday, Xtreme Oil & Gas, as part of the process to become a fully reporting company, updated and completed a third party private valuation that concluded the company was worth $102,520,900 or $2.24 per share. That attracted some attention and Xtreme Oil & Gas rose from $0.2 to $0.4 (XTOG has a 52 week trading range of $0.12 to $2.05 a share). Investors should also note that at the beginning of the week, Xtreme Oil & Gas reported revenue of $1,253,968 and net income of $694,486 versus a loss of $1,903,518 for 2Q2010. In other words, Xtreme Oil & Gas could be a stock worth watching.

Sionix Corp. (OTC: SINX) Makes Two Multimillion Dollar Sales But…

Sionix Corp. designs, develops and sells water management and treatment systems for use in several different industries. On Wednesday, Sionix Corp. announced the sale of two advanced mobile water treatment systems (MWTS) to Nigeria with the purchase price for each ranging from approximately $1.2 million without desalination to approximately $2.3 million with desalination. Also on Wednesday, Sionix Corp. closed at $0.095 (SINX has a 52 week trading range of $0.04 to $0.20 a share). Investor may want to note that for the first 6 months of fiscal 2Q2011, Sionix Corp. reported no revenues verses $1,620,000 for the six months of the previous fiscal year. Sionix Corp’s operating expenses were also $1,861,141 verses $882,562 and the company ended the quarter with less than $4,000 in cash. In other words, Sionix Corp. does not have the healthiest financial statements.

e.Digital Corporation (OTC: EDIG) Announces a New License Agreement with Canon

e.Digital Corporation markets its eVU mobile entertainment system for the travel and recreational industries and both licenses and enforces its Flash-R portfolio of flash memory for use in portable devices produced by various electronic product manufacturers. On Wednesday, e.Digital Corporation announced that it has entered into a license and settlement agreement with Canon (NYSE: CAJ). On that day, e.Digital Corporation also closed at $0.032 (EDIG has a 52 week trading range of $0.03 to $0.12 a share). Investors may also want to note that last Friday, e.Digital Corporation reported that fiscal 1Q2012 revenues rose from $512,000 in fiscal 1Q2011 to $2.2 million with $2 million of those revenues (verses $25,000 for the prior year) coming from patent license revenues. In addition, EDIG reported a net income of $731,000 a year verses a net loss of $382,000. Hence, e.Digital Corporation is a stock worth watching.

The Bottom Line. Small cap OTC stock investors may want to add XTOG and EDIG to their watch lists but leave off SINX – at least for the time being.