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What denomination are those notes? $100's?
Email received from Stockpromoters.com says that PennyStockOnline.com is being paid 1.5 million shares to promote AMOK. That's a huge amount of money, if you value the shares at the current price. Also means the float is more than I thought....
Company:Amarok Resources Inc. (AMOK)
End of Day: $ Close:2.070Volume:883,014
$ Change:0.110% Change:5.612
Dollar Volume:1,827,839
3 Month :$ High2.070Volume 3m avg:604,657
$ Low:0.025% Change 3m:830.145
Dollar Volume 3 m:990,503
Compensation: PennyStockOnline.com - 1.5 million shares
ha ha, so people won't read it, of course.
Hi rojmn5:
As of what date is that share count. I see that number at pinksheets.com, but it's as of August 2009 - 6 months ago.
Do you have a link to some newer info?
thanks
It's pink sheet, non filing. We don't even know how many shares are outstanding. That means people are buying something without knowing how much it costs! Weird baby!
From the link on the previous post:
IMPORTANT ADDITIONAL INFORMATION: This publicly distributed report of Intelligent Investor Report, is a sponsored advertisement. This paid advertising issue of Intelligent Investor Report does not purport to provide an analysis of any company’s financial position and is not in any way to be construed as an offer or solicitation to buy or sell any security. Intelligent Investor Report is a paid advertiser. Amarok Resources, Inc. is the featured company. The distribution costs of this report to new subscribers, one hundred thirty thousand dollars, were funded by Benchmark Media Ltd. in an effort to create investor awareness of Amarok Resources, Inc. Benchmark Media Ltd. is neither a broker-dealer nor investment advisor, but is a shareholder in Amarok Resources, Inc., holding 1.5 million shares of Amarok Resources, Inc. stock which can be publicly traded (sold) at any time by Benchmark Media Ltd. group. It is anticipated that this report will generate new subscriptions for Intelligent Investor Report and expect to receive an unknown amount of revenue from new subscriptions from the subscription offer contained herein. Jarret Wollstein, the reviewer [or analyst], has been paid twenty-five thousand dollars in compensation for research, preparing and publishing this report and other publishing venues.
How many shares outstanding on TSHO currently? Latest info I see is 23 million, but that's as of August 2009. Anyone have a current share count?
http://www.otcmarkets.com/pink/quote/quote.jsp?symbol=tsho
thanks
I just realized why you think it's halted. It added an E today, now BONUE.
I don't think it's been halted. I show a bid and ask and 204,600 volume.
News can't be too good considering BONU got an E and is down 30% today.
What I want to know is this... are John and Rufus cousins?
Manic depressives make the market fun.
from Forbes Magazine online
http://www.forbes.com/forbes/2010/0301/investing-maidenform-core-mark-americas-makers-breakers.html
Matthew Schifrin, John Dobosz and William P. Barrett, 02.11.10, 02:20 PM EST
Forbes Magazine dated March 01, 2010
Lump of Coal
On heavy volume shares of Americas Energy Co. (AENY, 4.60) have risen 4,500% in a year. The latest financials for the mining firm, whose main office is now in Knoxville, Tenn., list no revenue, no cash and a negative net worth. The company just merged with a newly formed outfit that says it owns several coal properties in Kentucky and Tennessee. But those mines don't seem to be profitable.
The Web-posted bio of new boss Christopher L. Headrick, who didn't get back to us, lists real estate development experience but nothing in the way of resource extraction. Another company official is awaiting sentencing after pleading guilty to criminal income tax evasion. Someone has been paying a newsletter writer big bucks to flog the shares by making bold predictions of a $20 share price.
Before a reverse merger, the outfit was a Vancouver, B.C. miner called Trend Technology Corp. In November Canadian regulators issued an order barring trading in Americas Energy shares. But the restriction applies only in British Columbia. The securities remain available to dimwitted U.S. investors. --William P. Barrett
CCTC.pk up 100% - 250% today
http://www.themarketfinancial.com/
Averaging 100 posts per hour on IHUB.
http://investorshub.advfn.com/boards/board.aspx?board_id=10937
Total trade volume of 14,500 shares after the first hour of trading today. What percentage of that was your trade?
What happened to all the volume?
None available at IB. OK, I was able to short 78 shares there today. Buyin tomorrow.
I got one like that too. Addressed by hand. New one to me. I would stay away from any paid promotion like that. Obviously they pay money to promote it so that they can sell shares to the public. In other words, the share price isn't there because of the value of the company - it's there because of the promotion. When the promotion is done, the share price is bound to fall.
At least that's how I see it. Good luck.
Pump and dump. Not much doubt.
According to StockPromoters.com, $400,000 was paid to SuperHotPennyStocks.com.
Is this true? I don't see it in the SuperHot disclaimer anywhere.
Peter
There's a $700,000 paid mailer arriving in people's real-world mailboxes - I got mine on December 26.
Therefore, AENY is a paid pump.
Stockpromoters.com reported a $354,000 SNWT stock promotion today:
Liquid tycoon - three hundred fifty four thousand dollars that included employing other investor awareness marketing mediums for a one month investor awareness program by a third party for SNWT.
Compensation: Speculating Stocks - $2,500 cash for a two-week (11/30 - 12/13) SNWT investor relations contract. SpeculatingStocks.com, Inc. was previously compensated by a third party (Green Horseshoe Holdings) a total of $6,500 cash for two SNWT investor relations contracts in the past
Liquidtycoon.com
Who is the party funding AWSL's new equity line of credit? Why do they avoid revealing this information in today's press release?
Where were all you guys last week when there were 5 posts per day?
Why the sudden interest?
Is someone being paid to post without disclosing?
No, can't be that!! No way!
Is it a 'negative comment' to post basic fundamental information, or is it simply objective, factual commentary?
Here are the basics:
Shares outstanding: 111 million
Today's price: $0.13
Market cap of common stock: $14.5 million
Total assets: $3.6mm
Assets (not including goodwill): $1.2 million
Cash: $0.1 million
Liabilities: $3.0 million
Revenues last quarter: $0.2 million
Operating profit: -$0.2 million
The company is in dire need of cash. Despite having reduced inventory by $250,000 from December thru September, cash has risen only to $56,000.
typical bb distortion strategy
SNWT splits their stock 5:1 but the 10Q a week later uses only the pre-split share numbers. Like there wasn't time to make the adjustment.
So instead of showing the 125mm shares outstanding they are showing 25mm so that investors will think the market cap is only $5mm instead of $25mm.
Whatever happened to integrity?
It's a Dow Jones News Service piece. Perhaps it can be found on the WSJ site. Otherwise, you would need a subscription to Dow Jones News Service.
DJ IN THE MONEY: American Lithium And The Mystery Stock Promoter
Thursday, November 05, 2009 01:08:00 PM
By Carol S. Remond
A DOW JONES NEWSWIRES COLUMN
Like many development stage companies, American Lithium Minerals Inc. has negative working capital, no revenues and little in the form of actual business.
The stock of this Nevada corporation rose to a high of $2.99 last month, spurred by promotional newsletters paid by Lock Partners Inc. Then the company's stock price suddenly dived last week in heavy trading volume. The stock was recently trading at $2.27.
American Lithium came to life in February through a name change and four-for-one forward stock split. The company, which says it's investigating prospective lithium opportunities, has so far spent $61,000 to purchase "an option to acquire" mining claims in Nevada. On Thursday, it said it signed a letter of intent to acquire a lithium project in Utah.
Nobody at American Lithium was available to comment despite repeated phone calls.
A Vancouver promotional outfit called Rhino Marketing Inc., which was hired by Lock to market American Lithium, said Lock might be Swiss, when asked about it. But there's no sign of Lock in the Swiss corporate registry. Disclaimers indicate that Lock paid $300,000 to various outfits to promote American Lithium stock.
While the people behind American Lithium's stock promotion might want to remain anonymous, there are a few signs that might concern investors.
Two of the men hired to run the company have ties to BG Capital, an investment group based in Barbados. BG Capital has a knack for acquiring big stock positions in struggling companies on the cheap and securing large fees for its consulting services. Deals involving BG Capital tend to be highly dilutive to other shareholders.
Robert "Bobby" Genovese, founder and owner of BG Capital Group Ltd and BG Capital Management Corp., didn't return a phone calls seeking comment. Marco Markin, BG Capital Management's chief executive, also didn't return a call. According to its Website, BG has offices in Nassau, Florida, Los Angeles, Toronto and Vancouver.
Matthew Markin, who according to a Canadian news article is Marco's brother, was president of American Lithium from May 2008 to Oct. 2009. He remains as chairman of the board.
Steve Cook, American Lithium's PR guy has worked on BG Capital's two last turnaround projects, Clearly Canadian Brands Corp. (CCBEF) and Spectrum Sciences & Software Holdings Corp., now Horne International Inc. (HNIN).
Matthew Markin nor Cook returned several phone calls seeking comments. Matthew Markin worked for another BG Capital company, Neptune Society, from April 2002 to December 2003. (Marco Markin was president of Neptune Society from October 1999 to January 2004.)
Reached on his cell phone Tuesday, Cook said that this reporter's messages had been passed on to Matthew Markin and hung up.
Searches of phone records show that the number listed on American Lithium's filings with the Securities and Exchange Commission is registered to "BG Capital Man" - which might stand for BG Capital Management.
Cook features preeminently in a 2008 reality show titled Bobby G: Adventure Capitalist. The show's eight episodes show Cook, Genovese and members of his team hard at work, attempting to turn around Clearly Canadian. The stock of this Canadian beverage company climbed to a high of $4.55 in June 2006, about a year and a half after BG Capital first became involved with the company. The stock was recently trading at 6 cents a share.
Before Clearly Canadian, BG Capital and related entities were working with budding engineering company Spectrum Sciences. Spectrum's stock reached a high of $4.02 in April 2004, months after Genovese began controlling a large portion of its shares through dilutive consulting and financing arrangements. Spectrum shares were down to about $1.30 by late May 2004 after the company said the SEC was looking into its dealings with consultants. In November 2005, BG Capital agreed to pay $3.25 million to settle a lawsuit brought by a Spectrum shareholder seeking to recover short swing profits. That same month, Spectrum Sciences said the SEC had concluded its investigation without recommending any enforcement action. (Spectrum Sciences and Genovese were featured in several In The Money columns in 2004).
According to filings with the SEC, Matthew Markin owns 22 million shares of American Lithium's 49 million shares outstanding at the end of July.
The company said it raised $1.45 million in two private placements in July and October to foreign investors. According to a filing, the July $450,000 placement was purchased by Seaplane Ventures Inc. The document didn't indicate where that entity is registered or who controls it.
(Carol S. Remond, a special writer on the In The Money team, is an award-winning columnist who won a Gerald Loeb Award in 2005 for best news service content with "Exposing Small-Cap fraud," a series of articles that described how three small companies unscrupulously pumped up their stocks. She can be reached at 303-997-5783 or by e-mail: carol.remond@dowjones.com)
http://www.thestreetsweeper.org/undersurveillance.html?i=51
PennyStockChaser Hides Profits, Secrets from Investors
by Melissa Davis - 11/3/2009 6:01:10 PM
* Click here to start/join a discussion on this article or supply tips for future stories.
This June, shortly after PennyStockChaser announced that it had become the most popular website for “hot penny stock tips” in the business, the Internet-based tout sheet began dropping a familiar name that once carried considerable weight on Wall Street.
It listed Mike Schonberg – a name formerly attached to such legendary investment firms as Dreyfus and UBS – as its official contact person. Keeping with its secretive nature, however, the website stopped well short of offering any details about Schonberg’s professional background.
If Mike Schonberg is the same “Michael L. Schonberg” who tainted Dreyfus by investing client funds in risky penny stocks a decade ago – a likelihood that The Street Sweeper spent the past week trying to prove – PennyStockChaser may have kept its mouth shut for good reason. After all, Schonberg left Dreyfus with a reputation for using investor funds to pump up worthless penny stocks that he owned and ultimately sold.
PennyStockChaser appears to engage in similar practices. Already, during just seven months of operation, the young website has collected almost 200 million free trading shares in microcap companies that it was paid to tout. Although PennyStockChaser fails to disclose whether it has already sold those shares – shunning a practice adopted by more transparent firms – it could have scored millions by selling some of those pumped-up stocks before they crashed and left ordinary investors with big losses.
In early August, for example, the website highlighted Atlantic Wind & Solar (AWSL) – a company with no revenue, few employees and an “office” that apparently belongs to UPS – in one of its featured profiles. Shares of AWSL, which fetched 84 cents on the day of that report, rocketed toward $5 over the next few months before reversing course and losing serious ground. PennyStockChaser received 140,000 free shares of AWSL – worth $675,000 at their peak – for its favorable coverage.
Timothy Sykes, a former hedge fund manager with a keen eye for penny-stock fraud, suspected blatant hype and shorted 3,000 shares of AWSL ahead of its recent plunge.
“I still expect the stock to fall 50% to 90% from its pumped-up highs, in accordance with other PennyStockChaser pump and dumps,” Sykes wrote in a blog on his official website. An “SEC (Securities and Exchange Commission) halt is also possible … I’ve predicted three SEC trading halts in a row – GVBP, EMGE and SPNG – and this one is waaaaay up there as the next potential halt.”
The Pink Sheets, an exchange known for its lenient listing standards, actually stopped publishing price quotes for AWSL – and issued a “buyer beware” notice for investors – due to potential dangers associated with the stock. Even so, AWSL still sells for around $3 a share, making it one of the biggest gainers on PennyStockChaser’s “Past Winners” list despite its recent fall.
Trailer Park Trash?
Several of the stocks on that list fetch even less now than they did when PennyStockChaser first started promoting them.
Take Precision Petroleum (PPTO), for example. An early favorite of PennyStockChaser, touted when the website was still brand-new, PPTO portrays itself as an independent energy company focused on exploration and development opportunities throughout North America. According to PPTO’s latest quarterly report, however, the company has never generated any revenue and has just $1,316 in the bank to finance its big plans.
Like AWSL, regulatory filings show, PPTO also lists an odd address for its headquarters. Based on Internet-based satellites, that address appears next to possible outbuildings or mobile homes – on a barren piece of land – in a tiny Oklahoma community known as “Slaughterville.”
Nevertheless, PennyStockChaser wholeheartedly endorsed the company during repeated touts this spring. With PPTO rising to 86 cents a share in early May (but still down from the $1.50 it originally fetched three months earlier), PennyStockChaser described the stock as a target of short sellers that would soon “skyrocket” on positive news and intense buying pressure.
“We talk to PPTO management,” PennyStockChaser stated in a press release focused on the stock, “and they tell us to expect more good news in the coming days and weeks.”
PennyStockChaser then directed investors to (now-broken) links for press releases, hosted by a site called launchyourcampaign.com, about PPTO’s promising future. One day later, PennyStockChaser again touted PPTO and insisted that investors “should really read the PRs” located at launchyourcampaign.com for more information about the company’s potential. By doing so, PennyStockChaser treated those press releases almost like independent sources.
Based on Internet searches, however, PennyStockChaser and launchyourcampaign.com shared the same Internet Protocol (IP) number – typically linked to a single computer – until the latter site suddenly disappeared.
Missed Connections
Meanwhile, PennyStockChaser has gone on to promote companies with some intricate connections of their own.
AWSL stands out as a prime example. In its regulatory filings, AWSL lists Gilles Trahan as the chairman of its board. Another penny-stock company, MSE Enviro-Tech (MEVT), claims Trahan as its chairman as well. Over the course of the past few years, both AWSL and MEVT have retained Geneva Bancorp – which previously employed Trahan as its top officer – to provide investor relations services for their companies. Depending on the press release, Trahan can be found touting the prospects of MEVT on behalf of either Geneva Bancorp or the company itself.
As the firm hired to manage investor relations for AWSL and MEVT, Geneva Bancorp turned to PennyStockChaser for promotions of both companies.
“The same guys who brought us AWSL have brought us MEVT,” PennyStockChaser proclaimed late last month. “AWSL has made members a fortune, and we are sure MEVT will do the same … The stock could see a move to the $5 (range) and make members big money – if they move fast.”
With its price hovering around 40 cents a share, however, MEVT has actually lost some ground instead. Still, since PennyStockChaser received 350,000 free trading shares in the company – worth $140,000 even at current prices – the firm stands to make money on the stock regardless.
Dark Secrets
PennyStockChaser offers few clues about those who actually run the website and therefore stand to profit from its trades. The firm lists no officers or directors on its website and now provides only generic contact information -- completely stripped of any names – in its press releases.
It even hired an outfit known as “Domains by Proxy,” which specializes in concealing the identities of website operators, to register its domain name instead of handling that routine matter itself.
“Domains by Proxy was conceived to deal with one of the biggest shortcomings of the Internet – the loss of privacy,” the firm states on its website. “If you want to keep your personal information private and still retain full benefits of domain registration, then a ‘private registration’ is for you. Your identity is nobody’s business but ours.”
For a while, PennyStockChaser did mention a few names – including Schonberg’s – in its press releases. This summer, for example, it listed Michael Scott Jacobs (occasionally misspelling his last name) as its certified financial advisor. It even provided Jacobs’ official broker registration number, which can be used for background checks showing that Jacobs was previously sanctioned by the Financial Industry Regulatory Authority. Although Jacobs neither admitted nor denied any wrongdoing, he inked $1 million worth of settlements – and saw his principal license suspended – as a result of his alleged misconduct.
PennyStockChaser identified Jacobs as its CFA in many of the same press releases that listed Schonberg as its official contact person. Even though the two men apparently worked together, however, Jacobs implied that Schonberg was a stranger when The Street Sweeper contacted him at his new employer – a tiny financial firm in Boca Raton, Fla. – for information about Schonberg’s current whereabouts and his professional background.
“I know absolutely nothing,” Jacobs stated in a rush. “I can’t help you at all.”
History Lesson
There is no shortage of information about the Michael Schonberg (also known as Mike) who ruined his career on Wall Street by investing client funds in the same types of risky companies that PennyStockChaser now touts.
In just one story about the infamous fund manager, published more than a decade ago, BusinessWeek reveals that Schonberg established big stakes in dubious penny stocks for three giant investment firms – UBS, Omega Advisors and, finally, Dreyfus – before his ultimate downfall. Schonberg even bragged about his aggressive strategy to the press when one of his Dreyfus-sponsored funds briefly became the top performer in the industry ahead of its looming crash.
“Right now, the fund is considered a ‘microcap’ fund based on the stock it owns,” Schonberg told the Pittsburgh Post-Gazette back in May of 1996. “We can own anything.”
While at UBS and Omega, BusinessWeek later observed, Schonberg had exercised similar judgment. During his final months as chief investment officer at UBS, the magazine reported, Schonberg ordered a big purchase of Chromatics Color Sciences – a hyped-up penny stock – that made UBS the company’s largest institutional holder. UBS liquidated that position around the time that Schonberg departed, the magazine added, but Dreyfus soon wound up with a similar stake in the same company with Schonberg managing its funds.
Meanwhile, BusinessWeek discovered, Schonberg had personally received “cut-rate” shares of that stock.
The SEC later fined Dreyfus $2.55 million and temporarily suspended Schonberg from associating with any investment advisors in response to the fiasco, Dow Jones reported in May of 2000. It also adopted more stringent rules aimed at preventing similar conflicts in the future, Dow Jones added.
Manuel Asensio, a famous short seller who declared Chromatics an outright fraud, assumed that justice had been served.
“The stock is at 3 cents,” Asensio noted in a 2002 deposition taken for a Chromatics-related lawsuit. “The underwriter was taken out. The brokers were taken out. And the crooked portfolio manager was taken out.
“Why,” he asked, “should the SEC do anything further?”
Big ‘Coincidence’
Later that year, Wall Street Reporter – a news outlet targeted by the SEC for touting stocks without disclosing the compensation it received in return -- began listing “Michael Schonberg” as one of its senior analysts. By early 2003, Schonberg had risen to become the firm’s official research director. He would hold that position until at least 2006.
After that, his name disappeared from public view until PennyStockChaser began listing “Mike Schonberg” as its official contact person in June. It stopped mentioning Schonberg by name – although he still works there – in its official press releases three months later. It dropped his name from press releases touting penny stocks (rather than its own website) even before that.
Internet searches turn up just eight addresses in the entire country for people named Michael or Mike Schonberg. Based on a background check conducted by a former FBI agent, one of those addresses (as well as a disconnected telephone number) belongs to the former Dreyfus fund manager. Unless one of the other seven also promotes penny stocks – an unusual career path for most – the Schonberg from Dreyfus and the Schonberg at PennyStockChaser appear to be one and the same.
Nevertheless, in a recent email exchange, PennyStockChaser suggested a possible case of “mistaken identity” – saying that its own Schonberg has no (current) affiliation with Dreyfus or Wall Street Reporter either one – and labeled the entire situation a “coincidence indeed.” It later ignored a request to confirm, on the record, that its Schonberg had never worked for Dreyfus at all.
If PennyStockChaser has in fact located its own Mike Schonberg to promote penny stocks – a scenario that many experts doubt – then the two men appear to share more than the same name. In an article covering a shareholder lawsuit filed against Schonberg 11 years ago, Reuters could have been describing the strategies embraced by either man.
“The complaint … alleged Schonberg, after starting to run the (Dreyfus) funds, started to invest in small, illiquid and volatile companies with little – and sometimes no – revenues or earnings,” Reuters stated, “and displayed an ‘obsession’ with microcap stocks.”
* Editor's Note: The Street Sweeper hired an independent fact-checker to verify the accuracy of this story. Whenever possible, it has also included links to the actual documents used during the course of its research.
Wow, sooooooo quiet.
What happened to all the posting on this board? Today's volume about 5% of Wednesday's volume.
Did the pump contract expire? Where is bigtuna et al?
Actually that's a Fed requirement. The Federal Reserve Board regulates margin via Reg T which requires a minimum of $2.50 per share.
It's a more sensible percentage of value in Canada which is one reason shortsellers sometimes prefer a Canadian broker.
I am surprised to see John Liviakis associated with this company. Perhaps his reputation for promoting undeserving companies is itself undeserved.
Still, it is a red flag.
The below is old and from what many feel is an overly biased source. http://www.citronresearch.com/index.php/2003/12/12/
The investor relations arm behind Verdisys is John Liviakis. John Liviakis has been in the investor relations business for many years. Instead of commenting on Mr. Liviakis, let his track record speak for itself. Below is a sampling of some of the stocks Mr. Liviakis has been involved with over the past 6 years and their current trading price. (at one point they were all much higher)
TMXG- .05 EACC-.26
NTGN- .0001 RACE- .0015
PCOM- .15 MXMX- .0001
USWE- .14 PFAE- .06
SRMI- .20 BIOP- .005
Our Favorite of those stocks is Biopulse (BIOP). Mr. Liviakis was the largest shareholder (over 13%) and spokesperson for the company. The company was selling fake cancer cures in Mexico until the Tijuana clinic got shut down by the FTC and the Health Department. This was only 2 years ago for Mr. Liviakis.
How can you discern which pumps will take off, and which will not?
"And for a while this effort can reap some nice rewards IF you trade the stock, without drinking the Kool Aid and becoming a believer."
Do they always work, but it's a question only of which are simply selling into the pump keeping the price steady versus which are trying to increase the price?
Wasn't this already announced two weeks ago?
On October 14, 2009, the Company’s Chief Executive Officer, Wayne Gruden, issued a private warrant (the “Warrant”) to the Company’s Chief Financial Officer, Johannes Petersen, providing Mr. Petersen the right to acquire one million (1,000,000) shares of the Company’s common stock (the “Warrant Shares”) currently held by Mr. Gruden.
Read more: http://www.faqs.org/sec-filings/091016/AMERICAN-SIERRA-GOLD-CORP_8-K/#ixzz0V9RdoNRL
How do you know this about the marketing deal? Where can I verify that?
Thanks, Peter
Oh man, you guys are starting to dish it out pretty deep. You have succeeded in discouraging me from posting. It's getting dull and clearly you are more motivated than I am.
You have an entire armory of misinformation to draw upon and I have no incentive to spend my day refuting the bull.
At least IHUB has stopped allowing the deletion of on-topic posts, so I can come back in a few days and cause you to do this all over again.
I do find it sad though that you spend your energies on such an unethical pursuit, pumping crap stocks for small profit. What is the cost to your soul?
Excuse me, we are talking about Dow Jones, Inc. and you are accusing them of employing "a rigged writer known for other manipulative articles".
Who has more credibility - you and the other promoters on this board or Dow Jones, Inc.?
Such silliness. It's so hard to sell something so valueless.
It's hard to know. But that they make it so odd and obscure just means they are not seriously in business for the long term. I see that Dow Jones agrees with me:
IN THE MONEY:Nutra Pharma's New Pain Remedy Might Bite Investors
DOW JONES NEWSWIRES
By Carol S. Remond
A DOW JONES NEWSWIRES COLUMN
Nutra Pharma Corp (NPHC) is betting that people suffering from chronic pain will use its brand new homeopathic remedy Cobroxin, a preparation made with cobra venom.
But snake venom aside, there are a few reasons investors might want to exercise caution.
For starters, Nutra Pharma doesn't exactly have a healthy balance sheet. According to its last quarterly filing with the Securities and Exchange Commission, the company at the end of June had no cash, total assets of just $39,000 and about $3.1 million in liabilities. Earlier this week, Nutra Pharma said it sold almost 35 million shares at 8 cents during the month of September. That brings its shares outstanding to about 255 million which, at a current price of 71 cents, gives this company a healthy market capitalization of about $181 million.
Then there is the fact that the company hasn't completed any testing of its new pain killer on humans, a point that might have some would-be-users think twice before trying Cobroxin.
Aside from press releases by Nutra Pharma and Xenacare Holdings Inc. (XCHO), the company licensed to market and distribute the pain remedy, and a Web site set up by Nutra Pharma, there is little information about Cobroxin. Neither Nutra Pharma, nor Xenacare mentioned Cobroxin in press releases or filings with the SEC before August 2009. Xenacare said Aug. 17 that "its" pain reliever Cobroxin had won a best new product award. On Aug. 20, Nutra Pharma announced the launch of an over-the-counter pain reliever called Cobroxin. And then in an Aug. 26 press release, Nutra Pharma said it had licensed Xenacare to market the product in the U.S.
According to its most recent quarterly report, Xenacare at the end of June had no cash, about $1 million in assets, $3 million in liabilities and almost $8 million in accumulated deficit.
Xenacare said in a filing earlier this week that it raised $500,000. That money might come handy to fund the $550,000 marketing campaign of Cobroxin it announced in early September.
The flurry of August press releases was quite beneficial to Nutra Pharma's stock. Shares, which had been trading under a nickel, jumped to a high of 99 cents on Sept. 29. Trading volume also spiked, with a record 7 million shares changing hands on Oct 2.
Nutra Pharma Chief Executive Officer Rik Deitsch attributed the price and volume spikes to the fact that his company has a lot of followers who believe in Cobroxin. Deitsch said Cobroxin would be available in retail stores Monday. The CEO told Dow Jones Newswires that cobra venom had historically been successfully used as a pain killer and predicted that Cobroxin would boost his company's revenues.
Asked about Xenacare's apparent lack of cash to finance Cobroxin's marketing campaign, Deitsch, a Xenacare director, said the company had more than $10 million in available financing from its insiders.
Xenacare CEO Frank Rizzo wasn't available to comment. SEC filings show that Nutra Pharma invested in Xenacare in 2004. Deitsch said his company converted about $175,000 into 85,000 shares of Xenacare, which it still holds.
Deitsch said Nutra Pharma is in the process of completing human clinical trials in an effort to gather as much information as possible about Cobroxin. Investors might want to wait for those results before taking the plunge.
(Carol S. Remond, a special writer on the In The Money team, is an award-winning columnist who won a Gerald Loeb Award in 2005 for best news service content with "Exposing Small-Cap fraud," a series of articles that described how three small companies unscrupulously pumped up their stocks. She can be reached at 303-997-5783 or by e-mail: carol.remond@dowjones.com)
(TALK BACK: We invite readers to send us comments on this or other financial news topics. Please email us at TalkbackAmericas@dowjones.com. Readers should include their full names, work or home addresses and telephone numbers for verification purposes. We reserve the right to edit and publish your comments along with your name; we reserve the right not to publish reader comments.)
Copyright (c) 2009 Dow Jones & Company, Inc.
On August 20, 2009, our Board of Directors authorized the offer and sale of our common stock at $0.08 per share. From September 1 through September 22, we sold 34,948,750 million common shares to 65 accredited investors for $2,795,900.
Strange how NPHC failed to mention to its loyal investors that the Patent Office plans to reject the Cobroxin application.
Patent application:
11/642,312 Use of cobratoxin as an analgesic
07-24-2009 Mail Non-Final Rejection
07-23-2009 Non-Final Rejection
01-13-2009 Miscellaneous Incoming Letter
02-02-2009 Case Docketed to Examiner in GAU
01-30-2009 Change in Power of Attorney (May Include Associate POA)
01-27-2009 Correspondence Address Change
12-09-2008 Mail Pre-Exam Notice
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Application Number: 11/642,312 Customer Number: -
Filing or 371 (c) Date: 12-19-2006 Status: Non Final Action Mailed
Application Type: Utility Status Date: 07-24-2009
Examiner Name: SINGH, SATYENDRA K Location: ELECTRONIC
Group Art Unit: 1657 Location Date: -
Confirmation Number: 2274 Earliest Publication No: US 2007-0190167 A1
Attorney Docket Number: 1040-011U Earliest Publication Date: 08-16-2007
Class / Subclass: 514/002 Patent Number: -
First Named Inventor: Paul F. Reid , Plantation, FL (US) Issue Date of Patent: -
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Title of Invention: Use of cobratoxin as an analgesic
On 9:00 am EDT, Wednesday August 26, 2009
PLANTATION, Fla.--(BUSINESS WIRE)--Nutra Pharma Corp. (OTCBB: NPHC - News), a biotechnology company that is developing treatments for Adrenomyeloneuropathy (AMN), HIV and Multiple Sclerosis (MS), has announced today that it has successfully completed a licensing agreement that grants XenaCare Holdings (OTCBB:XCHO - News) ongoing exclusive United States marketing and distribution rights for Cobroxin in return for meeting specific minimum performance requirements.