Tauriga Sciences Inc (OTCMKTS:TAUG) Heading for $0.02 Again
Tauriga Sciences Inc (OTCMKTS:TAUG) had a pretty interesting session yesterday. It opened the day at $0.0152 (around 18% above Tuesday’s close), ran to an intraday high of $0.029 per share a few minutes in, and then settled to more manageable levels. In just six and a half hours the ticker managed to shift more than 32 million shares which means that the dollar volume stands at just under $700 thousand. TAUG finished the day at $0.019 per share which commands a market cap of around $10 million. That’s quite a lot of action for a ticker that hasn’t been actively traded recently, but what caused the sudden interest?
When we first checked, we thought that the volume spike has been caused by the 10-Q which was published yesterday. When we opened the report, however, we found out that it’s not the reason for the sudden jump. Not least because it came out after the end of the session.
And even if it had been published before the opening bell, we’re struggling to see how it could have caused so much buying considering the figures that we see in the balance sheet. Here’s what TAUG had as of December 31:
- cash: $57 thousand
- current assets: $109 thousand
- current liabilities: $1.38 million
- no revenue since inception
- quarterly net loss: $1.6 million
Clearly, the financials are not convincing enough, but when you take a closer look at the document, you’ll spot some other issues. The number of issued and outstanding shares has increased by as much as 175 million over the last three months and there are still plenty of convertible notes that could cause additional dilution.
On the bright side, we should note that TAUG‘s management team are trying to do something about it. They have issued quite a lot of press releases over the last couple of months telling us that they have managed to repay some of the debt with cash instead of shares. They said that they will be funding the company with non-convertible instruments in the future and made a couple of appointments to the Board of Directors.
Perhaps the most important development of them all, however, was the acquisition of Pilus Energy LLC which was completed three weeks ago. Apparently, Pilus is a serious company with a really clever piece of technology that transforms wastewater into energy. Their BactoBots have even attracted the attention of some big media outlets, but unfortunately, neither they, nor TAUG seem too keen on telling us how far they’ve gone with the commercialization process. Still, investors seem excited enough and they reckon that the merger with Pilus was the right way to go.
And yet, although the deal sounds exciting, it was closed a while ago and it fails to explain the intense trading that the ticker underwent during yesterday’s session. In fact, the reason for the increased interest is a press release that hit the wire about an hour and a half before the opening bell.
Apparently, like so many other penny stocks (WebXU Inc (OTCMKTS:WBXU), Strategic Global Investments, Inc.(OTCMKTS:STBV), and Cannabusiness Group, Inc (OTCMKTS:CBGI) to name but a few), TAUG are also looking at the opportunities presented by the growing legalized marijuana industry. They said in the press release that they’ve signed a memorandum of understanding for the acquisition of an unnamed “Cannabis Manufacturer” that has been in the business for some time. Apparently, we’ll need to wait for a few weeks until we find out who the mysterious “cannabis manufacturer” is, but it’s clear that investors don’t mind the lack of concrete information.
They should probably think about what happened the last time TAUG announced a partnership with another company though. As we wrote back in June 2013, they entered a joint venture with one of last year’s worst promotional disasters – Green Innovations Ltd (OTCBB:GNIN). The partnership hasn’t really brought much in terms of business benefits, but if you take a look at the charts of the two companies, you’ll see that in that aspect, the results are even more dismal. Eight months ago, GNIN was hovering around the $0.42 per share mark, but yesterday, it closed the session at just over $0.10. TAUG, on the other hand, was fluctuating between $0.07 and $0.08 back in June, but, as we mentioned already, it’s currently struggling to break through the $0.02 barrier.
Will the cannabis business yield better results? Only time will tell.
