Georgi Kamburov

NuGene International Inc (OTCBB:NUGN) Accelerates Its Decline

by Georgi Kamburov August 13, 2015

On July 30 the stock of NuGene International Inc (OTCBB:NUGN, NUGN message board) posted a high of $3.32. Eight sessions later during which the company registered only two ending in the green and the stock was now sitting nearly 25% lower. Yesterday NUGN submitted their financial report for the second quarter of the year but it not only failed to prevent the further decline of the ticker but actually caused the stock to crash even harder wiping 12.4% of its value and closing at $2.23.

The problem is that NUGN’s losses could get even scarier. At the moment, despite the severe corrections, the market capitalization of the company stands at more than $88 million. At the same time the quarterly report revealed that as of June 30 NuGene had:

• $486 thousand cash
• $1.16 million total current assets
• $268 thousand total liabilities
• $536 thousand sales
• $772 thousand net loss

Admittedly, there are plenty of pennystock ventures out there that could only dream of having a balance sheet even remotely resembling that of NUGN but for NuGene the numbers are far from encouraging. Quarter-over-quarter their revenues increased by only $50 thousand while the net loss grew by three times and from $240 thousand had now reached nearly $780 thousand.

Another rather negative influence on the ticker is more than likely the paid pum that has been going on for months. The artificial hype around the company was generated through the distribution of hard mailers and according to the latest disclaimers the production budget for the promotion was $4.4 million. So, who would want to spend such a massive amount of funds in order to pump the stock? How about the owners of the 11.1 million free-trading shares that they bought at a split-adjusted price of $0.0033? Thanks to the increased interest in NUGN created by the promotion they had the chance to reap millions in profits.

If the pump comes to an end and the stock settles down at a more realistic share price levels NUGN couldstabilize. The risks around the stock remain significant though. And it may be a good idea to take a look at the 8-K filing from July 21. According to it NUGN, its CEO, and its Chairman of the Board of Directors are among the defendants in a complaint filed by the company Stemage Skin Care LLC. 

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