Regen BioPharma Inc (OTCBB:RGBP) Stirred Up At Last
With the major indeces digging a hole in the ground, many people hold the opinion that the OTC Markets is one of the few places where you can actually make money trading stocks at the moment. And there are a few things to suggest that this is indeed the case. Regen BioPharma Inc (OTCBB:RGBP), one of the more illiquid OTC tickers, proved the point quite well, actually.
About an hour before Monday’s opening bell, the company announced that they have used their clever Gene Silencing technology to kill cancer stem cells. The management team seemed pretty excited and although the reaction was not instantaneous, investors too saw how positive the news is. Yesterday, they poured about $100 thousand into the stock, and they pushed it on a 38% run which resulted in a close of over $0.20 per share for the first time in just under three months.
The people who got in and got out quickly have almost certainly had the chance to walk away with some cash in their pockets. But what about the ones who decided to hold the stock overnight? And what about the ones who reckon that RGBP is a long-term investment rather than a quick trade? Can they profit from the stock?
RGBP is a penny stock and as such, predicting its near-term performance is extremely difficult. So keeping your eyes peeled is definitely a good call. The same goes for doing some due diligence and taking a look at the company’s longer term prospects.
RGBP is a majority owned subsidiary of Bio Matrix Scientific Group Inc (OTCMKTS:BMSN) which, the more experienced among you know, isn’t the best performing penny stock out there. Regen’s CEO, David Koos, is also at the helm of Entest BioMedical Inc. (OTCMKTS:ENTB) – another OTC stock that was scraping the bottom of the triple-zero levels until recently. Currently, it’s hovering around $0.60, but that’s only due to a reverse split from a couple of weeks ago.
So, the people in charge of RGBP have so far failed with creating a successful business venture and with Regen, their task is especially difficult because the latest 10-Q showed us that the company’s financial situation is not exactly stable:
- cash: $208,582
- current assets: $228,003
- current liabilities: $145,281
- NO revenue since inception
- quarterly net loss: $1,562,371
Indeed, we’ve seen worse financial statements, but it’s fair to say that the figures above are hardly solid. And that’s something you should definitely consider while you’re contemplating the risks of a potential investment.
On the bright side, the liabilities are kept in check, but once you take a closer look at the SEC filings, you’ll see that this was only possible thanks to the hasty conversion of debt. In Q1, the company issued more than $882 thousand worth of convertible notes and it converted them almost immediately into about 31.5 million shares. Between April and June, a further $90 thousand worth of debt was picked up, but it too was satisfied before the end of the quarter with the issuance of 3.2 million shares.
What does that mean? It means that almost one in three RGBP shares saw the light of day at less than $0.03 apiece. Make sure you bear this in mind before you place your buy order at more than $0.20.
