Bio Nitrogen Corp. (OTCMKTS:BION) Returns with Production Promises

Even without a significant price rebound, Bio Nitrogen Corp. (OTCMKTS:BION) impresses with record buying volumes at the bottom of a long sliding trend. More than 5 million shares were bought, as BION settled near 8 cents per share. The ticker added nearly 16% on Monday.

The jump in buying volumes coincides with a press release from BION, stating it had selected a construction company to build its nitrogen fertilizer plant. There is no mention of a binding contract, just a selection, and it is unknown when real production would start. But the message still gains attention.

BION is not actively promoted, but at a relatively low price may have gained enough attention as an underpriced bet. Still, the sentiment on message boards is largely negative, and there is much disbelief about the company’s ability to really gain from nitrogen fertilizer, especially as China is an extremely cheap importer. Financially, this is how BION is equipped for the construction:

• cash reserves of $24 thousand;

• negative working capital in excess of $2.8 million;

• 9-month quarterly loss of $2.3 million, up 73% on an annual basis (a/o Sept. 30, 2012).

The company has not updated itself since we last checked, showing significant deficits and only promises of financing for its production facility. Since February this year, the ticker has lost a lot of the enthusiasm, retreating from heights of around 50 cents.

Since the winter months, BION has been mostly inactive, trading in response to press releases in modest volumes. At 8 cents, the ticker may yet chard a longer trend and revisit some of the heights, and may even be picked up by paid pumpers.

Advanced Cell Technology, Inc. (OTCBB:ACTC) stands at similar prices, and a month ago also logged extremely high buying volumes. Since then, the ticker jumped significantly and slid back. ACTS is among the alternatives for BION with a price of several cents, and renewed investors’ interest.

The paid promoters for BION are quite inactive, with their latest picks dating back to the beginning of 2013. Another old pump, Cereplast, Inc. (OTCMKTS:CERP) is still active, and may make a similar rebounce after the long slide.

In any case, BION is a bit too optimistic of its future and may not be the best bet if you cannot afford the inevitable slide in the price.