Martinas B.

Med Gen Inc. (OTCBB: MGEN) – A different opinion on Med Gen Inc.

by Martinas B. June 6, 2007
medgen-logo.gif.jpgYesterday, we found a newly issued research report on Med Gen, Inc. We did a little digging and noticed the research report was not unbiased because the company had paid a sum of $10,000 to get the report. So we decided to publish our own opinion.

A sum of $10,000.00 might not seem to be a big deal. But for a company, which is struggling to make any profit from their production. Med Gen Inc., spent almost 50% of their first quarter revenue just to pay for their promotional article at hotshotstocks.com site.

In our opinion, A snoring freak without control – would be the best way to describe Med Gen Inc., company. Selling lifestyle products and remedies. Listed on the Nasdaq OTCBB stock exchange market under the symbol MGEN, company provides a whole series of products and remedies to make your lifestyle much better, as they claim.

They have been around since 1996, so far company is struggling to prove their products to be worth anything. In their first quarter ending March 2007, company only managed to generate $20,976 in revenue from selling their products. That’s over 50% less as in the same period in 2006. And more importantly that is less revenue than my gardener generated by planting some roses for me and a few neighbors.


Company's execution of their business plan appears as poor as their products. Surely it is hard to gain marketshare selling lifestyle products, but this company's lack of success is inexcusable to the point that is appears they do not care about their products' sale at all. This company really needs to generate meaningful product revenue in order let us believe this business has a future at all. I reckon, that their product so called SNORenz would not help even my pal stop snoring.

Death Spiral to 1.3 Trillion Shares

t_47.jpgAfter having dug on the company’s report in the U.S security and Exchange security report, we found some disturbing information abou their diluting the stock. As of March 31st, 2007, company had 393,011,265 shares of common stock, .001 per value per share, were outstanding, which is 1500 percent from the same period in 2006. This means existing shareholders suffered a ~95% equity dilution in just one year.

What was more disturbing was this appears to be a long term pattern for the company with no sign of let up in the foreseeable future. If the company will continue to dilute their stock at the same 1500% plus rate of last year, by the year of 2010 company will have approximately 1,326,375,000,000 shares in total. And yes that number is 1.3 trillion, I believe more than any other stock on the entire market.

On a positive note, the 1st quarter report it says that the company has 1,201,901 cash. This may help them execute their business plan. However, with heavy operating losses, company and approximately $7,000,000 in debt. We are quite concerned about where this company will get money to pay these future liabilities. But don't listen to our opinion, listen to their auditors who have attached a "Going Concern" to their financial statements.

If Med Gen Inc., top execs are planning to issue an overwhelming number of additional shares, this can cause – a Death Spiral.


charts_copy_copy.jpg
This chart illustrates a classic death spiral pattern. This stock has never been sold for $3,000 per share it was always a penny stock. This company's pattern is to continue to make reverse splits, issue new shares, and extend their downward spiral to infinity.

The table below is a portion from their SEC filings on their convertible debenture. As you can clearly see their is a large ammount of warrants and new shares coming to the market over the next few years. In our opinion this is certain to create further supply of stock and without enough demand the price will go................. (lower).

The unavoidable death spiral pressure

Due DateWarrants
03-30-2008
740,000
05-25-2008
740,000
08-23-2008
100,000 
08-26-2008
500,000
10-31-2008
600,000
02-23-2009
600,000
04-21-2009
30,000,000
04-21-2009 
15,000,000
04-21-2009 
5,000,000
02-09-2010
5,000,000


Comments 2

1. Guest
October 01, 2008, 01:21AM

Quotes Well everything but the walls and the bed was stolen out of my apartment and I had to file bankruptcy. Because ... well this might come as a surprise to you ... but I was left bankrupt. And I dont owe you or anyone anything - you owe me for intruding in my life, sabotaging me, harassing me, and trying to get cheap entertainment at my expense by robbing me. You have no right. Yet you grin and say that "I deserve to become a victim of madness" because you dont know any better. You grew up to steal peoples dirty drawers and shoes because that's what your parents taught you to do.

2. Guest
September 27, 2008, 03:36PM

Quotes Ayodele Baker declared BANKRUPTCY in the year 2000. Ayodele Baker is employed by MetLife Securities, North Coast Financial Group, as a Financial Services Representative, 1044 Northern Blvd., Suite 200, Roslyn, NY 11576.

It is not clear if Ayodele Baker reported her 2000 Bankruptcy on her U4 form for licensure. TheInvestorsFriend.com is currently investigating this.

Ayodele Baker's Disclosure Event Details as shown on FINRA.org/brokercheck show ONLY the following disclosure by Ayodele M. Baker:

Reporting Source: Broker
Judgment/Lienholder: Target National Bank
Judgment/Lien Amount: $2,092.49
Judgment/Lien Type: Civil
Date Filed: 04/28/2008
Court Details: Gregg E. Bienstock, City Marshall, Bayside, NY, Case Number S34477

----- However, Ayodele Baker underwent a BANKRUPTCY in February of 2000 -----

Here are the Federal Court Records and Case Number:

Name: BAKER,AYODELE M
Address: 2212 AQUEDUCT AV, BRONX NY 10453
Action: BANKRUPTCY
Court: NEW YORK FED COURT-NEW YORK CITY (BRONX County)
Case: 0040265 (02/03/2000)
Liability/As sests: NA/NA

Name: BAKER,AYODELE M
Address: 2212 AQUEDUCT AV, BRONX NY 10453
Action: BANKRUPTCY
Court: NEW YORK FED COURT-NEW YORK CITY (BRONX County)
Plaintiff: MICHAEL T HEFFERNAN AT
Case: 0040265 (02/03/2000)Lia bility/Assests: NA/NA

Since the plaintiff is listed as Michael T Heffernan AT, it's possible that Ayodele Baker did not declare this bankruptcy herself, but was forced into it by creditors filing on her. Either way, it was likely an item requiring declaration on the U4. "The Investor's Friend" is still investigating.

Have you had a problem with Ayodele Baker? Were you sold a policy you didn't want by Ayodele Baker, or were you promised something by Ayodele Baker that you didn't receive? Post your story about Ayodele Baker here or on The InvestorsFriend.com.

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