There is much optimism among traders of Nutra Pharma Corp.(OTC:NPHC) stock since the beginning of the year. Since Jan. 3rd high volumes and an increasing price determined Nutra`s position on the stock market. Yesterday`s session closed at $0.15 per share, or almost 100% more than in the beginning of the week.
The cause of this positive development for Nutra is obviously related to the financial reports issued in the beginning of the year, coupled with some other announcements from the company. Several amendments to the last 10-Q report were issued on Wednesday 5th alone. In all fairness, they do not match the stock market development. For the nine months ended Sept. 2010 the company has experienced a net loss of more than $2.2 million. Again, according to the amendments, the current accumulated deficit is $28.8 million. All in all, the financial statements raise some doubts about the future of the company, not only in terms of revenues but also in terms of NPHC further existence.
Now, Nutra Pharma Corp. is a holding company that has intellectual property and operates in the biotechnology field. It also has two wholly-owned subsidiaries under which the company conducts drug discovery research and development activities. In terms of share price, a dramatic drop marked the whole last year. On the other hand, during the third quarter of 2010 Nutra took several steps to reverse the negative stock trends. Some of them included steps for marketing and distribution of its products outside the US in countries like Mexico and India through partnerships with local distributors.
As working capital is also needed, steps were taken in order to secure funds for future operations. They would include negotiations with investors and sale of the company’s stock.
Whether all of the above and the other actions of the company are the right path to follow is yet to see. Some uncertainty lies in the fact that Nutra relies on two products exclusively and 96% of the company`s sales for the first nine months of 2010 were to a single customer. Diversification and expansion on domestic and international markets is the main way to bring back confidence in investors and for the stock price to come back to its past levels that were close to $1 per share.
