Nutra Pharma Corp (NPHC)

[petermic]

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: [e-mail])

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