New Generation Consu (OTCMKTS:NGCG) is Not Done Yet
New Generation Consu (OTCMKTS:NGCG) knows that being targeted by a Stock Mister pump is not a pleasant experience. The ticker fell victim to not one, but two campaigns by the infamous promoter and in both instances it lost more than half of its value in a matter of just six and a half hours.
NGCG fell from a height of $0.12 per share on January 6 (the day before the first wave of Stock Mister emails) all the way to just over a penny on January 20 (when the touting stopped). Sadly, its descent wasn’t about to end there. On January 28, the stock slipped below the $0.01 mark, and slowly but surely, the volumes all but disappeared.
It looked like NGCG will turn out to be one of the one-hit-wonders that appear on the OTC Markets, burn quite a lot of investors, and then pale into oblivion. The management team, however, had other ideas.
On April 16, they said that they want to enter the marijuana industry and capitalize on its huge revenue-generating potential. The press release was full of forward-looking statements, but it didn’t contain too many details. A few days later, however, NGCG shed some light on the situation. They said that they are in the process of developing a line of hemp-infused energy drinks called H420 Waters. Once again, there aren’t too many details, but the company was kind enough to tell us that the packaging should be revealed before the end of the month.
The effects on the stock have been absolutely profound. Out of the five sessions last week, only one ended in the red and thanks to a 50% jump on Friday, NGCG managed to claw its way up to a close of over $0.04 per share for the first time in over three months. And it’s showing no signs of slowing down in early trading today. About half an hour after the opening bell, it’s hovering around the $0.05 barrier which is another 23% up.
Investors are clearly excited and we can see why. Open the 2014 annual report and you’ll see that even without the fetchingly-named hemp infused energy drinks, NGCG is not doing too badly. Here’s a summary of the most important figures:
- cash: $95 thousand
- total assets: $512 thousand
- total liabilities: $205 thousand
- yearly revenues: $913 thousand
- yearly net income: $153 thousand
You can see from the figures that NGCG is a profitable company that’s not buried under mountains of debt. And that’s a rare sight in Pennyland. People probably reckon that with the pot energy drinks on board, the results will be even more impressive. They might be right, but are things really so simple?
The share structure is somewhat worrying. Not that long ago, NGCG was called United Music & Media Group Inc, it was traded under the UMMG ticker symbol, and it had about 1.6 billion shares issued and outstanding. In October 2014, the management team was overhauled, the business plan was changed, and a 1 for 1,000 reverse split was executed.
As you might have calculated already, immediately after the split, the O/S count was sitting at just 1.6 million. The annual report tells us, however, that on December 31, less than three months later, it was already hovering around 56 million. According to the company profile at the OTC Markets, on February 4, there were more than 484 million shares issued and outstanding.
This suggests that the dilution is pretty severe. The reports aren’t particularly informative when it comes to disclosing who and why got the newly printed stock, but we do know that at least 12 million shares have been issued as a conversion of debt. The rate remains undisclosed.
