NuGene International Inc (OTCMKTS:NUGN) Continues to Recover
Yesterday the stock of NuGene International Inc (OTCMKTS:NUGN) finished the trading session with a modest gain of just 1.69% at exactly 60 cents per share. The outcome may not be that impressive but it should be noted that the ticker has been climbing up the chart for the past six sessions. As a result NUGN have been able to make a significant recovery, bouncing up from their new 52-week low of 40 cents per share that was registered on May 19.
The start of the stock’s resurgence coincided with the filing of the quarterly report for the first three months of the year. Could this mean that the numbers reported by NUGN showed such an improvement that they managed to get investors excited about the company once again? Let’s open the report and see for ourselves if this is indeed the case. As of March 31, 2016, NUGN had:
• $149 thousand cash
• $1.1 million total current assets
• $2.3 million total current liabilities
• $213 thousand revenues
• $1.08 million net loss
Unfortunately, the balance sheet simply cannot justify the current appreciation of the company’s stock when, on a year-over-year basis, in almost all aspects it shows signs of deterioration. Compared to the same period in 2015 NUGN‘s revenues are down by 55% while the net loss has increased by more than 4 times. The working capital deficit is also growing and it now stands at more than $1.2 million.
Taking a closer look at the report reveals even more troubling information. Apparently NUNG’s management have been required to advance funding to the company in order for it to partially meet some “critical cash requirements”. Then, on page 26, the company states that “the substantial increase in balances outstanding and owing” to its suppliers has put their relationships with them “in jeopardy”. In order to raise some much needed funds NUGN are continuing to sell new notes.
The risks surrounding NUGN are far too serious to be taken lightly. The depressing financial state, the fact that the last PR outside of the company’s filings is now over 5 months old, and the past history of paid pumps must all be taken into consideration before putting any money on the line.
