Borislav Tonev

Nutra Pharma Corp. (OTCMKTS:NPHC) Bounces All of a Sudden

by Borislav Tonev February 12, 2016

On November 20, days before Nutra Pharma Corp. (OTCMKTS:NPHC, NPHC message board) published its latest quarterly report, the stock was sitting at $0.10 per share. Last week, it hit a 52-week bottom of just $0.018. Anyone wants to guess what caused the petrifying drop?

Those of you who assumed that investors were disappointed with the aforementioned 10-Q are absolutely correct. Here's what the company recorded at the end of September:

  • cash: $4 thousand
  • current assets: $547 thousand
  • current liabilities: $2.25 million
  • quarterly revenues: $53 thousand
  • quarterly net loss: $3.94 million

The sales have shrunk by a whopping 80% because of lesser demand for NPHC's Nyloxin® pain relief treatment, and unfortunately, this is far from the only problem.

A 1-for-40 reverse split was effected in May 2015 in an attempt to make the stock a bit more attractive. During the following weeks, NPHC did try to keep its head above the water, but pretty soon everyone realized that staying afloat for long simply isn't possible and the ticker tumbled.

This might have something to do with the dilution NPHC has experienced. Twenty-four hours after the aforementioned split, the number of issued and outstanding shares stood at less than 40 million. By November 20, it had grown to more than 76 million.

A portion of the shares issued during the aforementioned period saw the light of day as a conversion of debt, and at the end of Q3, plenty of toxic notes were still outstanding which could suggest that even more dilution is on the way. The discounts, in case you're wondering, range from 15% to 45%.

Rik Deitsch, NPHC's CEO, has been hard at work trying to convince investors that the company can weather the storm. In September, NPHC received an Orphan status for its RPI-78M Multiple Sclerosis and HIV treatment and, Mr. Deitsch called this “the most substantial event in the history of our drug discovery efforts”. He later hired some investor relations firms and he gave a few interviews.

People don't seem to believe him, though, and this might have something to do with the fact that Mr. Dietsch's involvement with other penny stock companies hasn't really made many investors rich. In addition to heading NPHC, he is listed as the CEO of Dmh International Incorporated (OTCBB:DMHI) and Greenhouse Solutions (OTCMKTS:GRSU). You can open the charts, go through the financial statements of these two companies, and see for yourself how well they're doing.

Despite the appalling report, the horrific stock performance, and the connection to other less-than-successful OTC enterprises, NPHC managed to bounce yesterday. And it bounced hard.

Around 2.4 million shares changed hands in a matter of six and a half hours and after a 52% jump, NPHC found itself at a little over $0.04 per share. Unfortunately, the surge wasn't accompanied by a press release, a new SEC filing or anything else that could have warranted it. Hence, there's no telling whether NPHC can stay here for long. And that makes it very risky indeed.

Comments 1

1. Guest
February 12, 2016, 03:24PM

Quotes This is a very one-sided review of the Company. There was no mention of 21 patents, approval of the company's OTC pain therapy in India, CPAM approval of the OTC products in China or the long history of clinical use of the company's MS and HIV therapies.

All of this provides a strong platform for growth. That is what is fueling the current speculation. I believe that the stock is HIGHLY under-valued at this time and deserves the current accumulation.

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