Borislav Tonev

Renewed Interest Propel Nutra Pharma Corp. (OTCMKTS:NPHC) Skywards

by Borislav Tonev August 28, 2013
4NPHC.pngAnd the next biotech penny stock to make an impressive run in the right direction is... Nutra Pharma Corp. (OTCMKTS:NPHC, NPHC message board). It took the ticker no more than three sessions in the green to complete the trip from $0.008 all the way to $0.022 which is quite a feet, especially considering the lack of a paid promotion. The question on everyone's mind right now is: "Will NPHC manage to remain level at this kind of heights?".

Instead of kicking off today's article with an analysis on the company and its product, we'll start by focusing on something different - the people who run NPHC. The CEO is called Rik Deitsch and he is quite a busy man. In addition to working at Nutra Pharma, he is also the Chief Scientific Officer of Waiora LLC - a manufacturer of a variety of nutritional products that are supposedly very clever and very healthy.

Not everyone thinks that way. A person by the name of Shelley Penney published an article back in February 2012 in which she exposes some peculiar facts about the announcements made by Waiora and Mr. Deitsch in particular. She was so cross with them, in fact, that she filed a lawsuit which resulted in the healthy living venture paying around $12 million for the settlement of the litigation.

08DMHI.pngWaiora is a privately held company so the number of shareholders suffering is minimized, but it would appear that Mr. Deitsch holds one more position and this time, the enterprise is publicly traded - Dmh International Incorporated (OTCBB:DMHIE). We wrote a couple of articles on DMHIE back in March when they were put under some heavy promotional pressure and in them, we expressed our doubts about the bright future that the pumpers were talking about. Sure enough, the chart on the right shows that in a matter of just five months, DMHIE (the E was recently added to reflect the company's delinquency in regards to their SEC filings) has lost around 93% of its value. That's a truly devastating performance but maybe, just maybe, Mr. Deitsch will have some more luck with NPHC.

On the bright side, they do have a product that is out there on the market. It's a special type of pain reliever that is based on an extract from snake venom. Some negative reviews are flying around the message boards and such things could generally affect the efforts made by the company, but the shareholders are more interested in the sales figures found in the financial statements. Unfortunately, they're not that impressive either. In fact, NPHC's financial situation is quite dreadful and in order to give you a better picture of how horrific it is, we've summarized the most important figures as found in the 10-Q for the second quarter of 2013:

  • cash: $0
  • current assets: $95 thousand
  • current liabilities: $3.8 million
  • quarterly revenue: $22 thousand
  • quarterly net loss: $609 thousand

Indeed, there are some revenues and the second quarter of 2013 resulted in more sales than the corresponding period of 2012, but when you have in mind the fact that the pain reliever has been on the market since 2009, you'll see that progress is tectonically slow.

The lack of cash, the huge liabilities and the $38 million accumulated deficit aren't much help and have, instead, triggered some additional issues. If you check out the Litigation section of the 10-Q, you'll see that the number of legal proceedings taken against NPHC, its subsidiaries and Mr. Deitsch himself is absolutely astonishing. There is even a petition for involuntary bankruptcy filed back in August 2012 and if its gets granted, the results will be devastating.

Even if it doesn't go through, there are still plenty of factors that could put a spoke in NPHC's wheel and put additional pressure on the price. Make sure you have all these things in mind before making your final decision.

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