NuGene International Inc (OTCBB:NUGN) Files Quarterly Report

For the past six sessions the stock of NuGene International Inc (OTCBB:NUGN) has been going nowhere but down. Initially the losses were not that severe but it seems that the downtrend is getting stronger and yesterday the stock crashed by over 10% closing at $2.55 per share. Today the company submitted its financial report for the second quarter of the year so could this help the ticker reverse its direction?

Before we answer that question let’s first see what the report has to offer – at the end of June NUGN had:

• $486 thousand cash
• $1.16 million total current assets
• $268 thousand total liabilities
• $536 thousand sales
• $772 thousand net loss

Compared to many of the other pennystock ventures NUGN’s balance sheet is actually quite encouraging. The problem is that it still remains completely disconnected from the overly-inflated market cap of the company that despite the recent loss in valuation still sits at above $100 million. Not to mention that although the revenues for the second quarter of the year surpassed the ones from the first by over $50 thousand the net loss increased at a much faster rate – at the end of March NUGN reported $240 thousand in net loss while now the number is over three times higher.

The red flags surrounding the stock run far deeper though and investors should be extremely careful when approaching it. For months NUGN has been touted by a paid promotion that included the distribution of a glossy hard mailer brochure. For a pump to be active for such a prolonged period of time it would need a massive production budget and indeed millions have been spent in an attempt to artificially push NUGN up the chart. The disclaimers in the hard mailers initially disclosed a budget of $2.28 million but in the more recent brochures that number was bumped up to $4.4 million. The people that could benefit the most from the paid pump are the owners of the 11.1 million free-trading shares that were sold by the company at a split-adjusted price of $0.0033.

Now, add to the mix the 8-K filing from July 21 which revealed that NUGN, its CEO, and its Chairman of the Board of Directors are among the defendants in a complaint filed by the company Stemage Skin Care LLC. and risks become even greater.

If the hype generated by the pump continues to fade NUGN could shed even more of its share price as the stock moves to more realistic price ranges. If you are determined to trade the ticker it is paramount to do your own due diligence before putting any money on the line.