Nutrastar International Inc (OTCBB:NUIN) Hits a Rough Patch
At the end of the second quarter, Nutrastar International Inc (OTCBB:NUIN) had very nearly $138 million in the bank. No, it’s not a typo and we haven’t gone mad. NUIN‘s cash reserves really were remarkable. That’s not the only positive thing about the Q2 report.
The company also recorded about $13.2 million in quarterly revenues and about $7 million in profits. The liabilities were far from horrendous and the share structure looked fine. There wasn’t even any toxic debt that could wreak havoc with the price. All in all, the 10-Q for the second quarter of the year told us that NUIN is a stable, operating OTC company.
Why then has the stock dropped from $0.66 at the time of the publishing of the aforementioned statement to its current price of just over $0.31? And why did it wipe out a whopping 46% of its value in a matter of just six and a half hours yesterday?
Well, the report for the third quarter didn’t come out on time, but that’s hardly a reason for panic in Pennyland, especially when a notification of late filing has been duly published. And in any case, even the most spending-spree-prone companies would struggle to burn through $138 million in the space of a few months, so chances are, NUIN‘s bank account is not on the verge of overdraft. In fact, there’s probably plenty of cash in it at the moment.
Sadly, about twenty minutes after Friday’s closing bell, a part of NUIN‘s management team filed an 8-K form and informed us that they don’t have access to the money. For a variety of incredibly complicated reasons, only Ms. Lianyun Han, the company CEO, can give access to NUIN‘s cash reserves and over the last few months, she has been reluctant to do that.
As a result, NUIN is now struggling to keep up with its outstanding payment obligations. The rest of the management team and the Board of Directors managed to secure some funding which will cover the most immediate payments, but ultimately, they say that NUIN‘s future depends on the termination of Ms. Han as a CEO and the regain of control over the company’s financial resources.
Clearly, investors are not sure if the Board of Directors can do it which, it must be said, is understandable to some extent. The people who have been around the OTC Markets for long enough probably remember some other China-based companies and we can’t imagine that their memories are particularly pleasant.
Even if you think that justice will prevail in the end, and that NUIN will stand out from the crowd as one of the truly successful Chinese OTC companies, you should still bear the historical performance in mind. As you can see from the chart at the beginning of the article, it’s not exactly stellar.
