Borislav Tonev

Umax Group Corp (OTCBB:UMAX) Loses More Ground

by Borislav Tonev October 3, 2013
UMAX.gifUmax Group Corp (OTCBB:UMAX, UMAX message board) started off in May 2011. At first, their principal offices were located in Poland and they had the intention of distributing products for the gaming and arcade industries. As you can see from their latest 10-K, they failed catastrophically with this business and probably that's why, a couple of months ago, they decided to change the plan completely and start dealing with something altogether different - nutritional supplements.

Unlike other small cap ventures that spend years developing magic pills that are supposed to keep us all in shape, UMAX decided that taking products that are already on the market and reselling them is a better idea. To some extent, there might be a glimmering hope suggesting that they're onto something.

The change in business took place less than six months ago but despite that, they are already generating revenues. In many ways, the story of UMAX sounds quite similar to the one of Nutranomics, Inc. f/k/a Buka Ventures, Inc. (OTCBB:NNRX) - you buy cheap shares of a penny stock company that offers nutritional supplements, but you don't need to go through the long development stage and wait for the products to hit the market. It almost sounds too good to be true. But is it?

4NNRX.pngWell, NNRX's chart clearly shows that things aren't going quite according to plan but let's not forget that they are the target of a paid pump which is clearly causing quite a lot of chaos around the stock. There are no traceable paid promotions for UMAX and yet, they are not doing particularly well either.

The price made an astonishing run in August and it nearly touched $3 in September. It was as clear as day, however, that there aren't many things to support the high value. Sure enough, five red sessions between September 13 and September 19 brought the ticker from $2.98 to less than $0.80. It did try to recover over the following weeks but yesterday, it lost another 25% which means that the current value stands at just over $0.90. The question now is: "Will UMAX manage to get back to its former glory?".

That, as you probably know, depends largely on how many people are paying attention to the ticker. Unfortunately, as we mentioned in our previous articles, there are some things that could urge a lot of investors to just walk away.

For one, their principal office doesn't look like much and there was quite a lot of stock sold at ridiculously discounted prices back in 2011. What's more, they are currently offering only three products and, as you can see from their latest financial statement, the supplements are not bringing UMAX much in the way of financial stability. Here are the most important figures as of July 31 once again:

  • cash: $8,526
  • current assets: $10 thousand
  • current liabilities: $28 thousand
  • quarterly revenue: $7,400
  • quarterly net loss: $19 thousand
  • accumulated deficit: $67 thousand

You would agree that these financials don't fit particularly well with the colossal market cap, which, even after yesterday's drop, amounts to more than $88 million. Anything else to worry about?

Well, you might want to consider the people that helped UMAX go public back in 2011. We are, of course, talking about Luis Carrillo and Wade Huettel. You can see from this article that the SEC aren't particularly fond of them and a quick check reveals that they prepared the paperwork for a lot of shady penny stocks when they were trying to get their shares listed on the OTC Markets. The list of clients includes Alkaline Water Company Inc (OTCBB:WTER), Southridge Enterprises Inc. (OTCMKTS:SRGE), Pacific Blue Energy Corp (OTCMKTS:PBEC) and Pub Crawl Holdings Incorporated (OTCBB:PBCW).

Of course, Carrillo and Huettel's involvement doesn't necessarily mean that UMAX is about to be crushed. Still, keeping it in mind is, we reckon, a good call.

Comments 1

1. Guest
October 04, 2013, 05:43PM

Quotes I was called buy a promoter on 10/3/13 to buy UMax stock he explained that the promotion was in phase 1 of promoting. I think I will pass

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