News about a sale of interest and a full-blown promotional campaign were supposed to push the stock of Next Generation Energy Corp. (PINK:NGMC) up yesterday. Contrary to expectations, they failed to do so.
As it turned out, NGMC slumped by 21% closing the latest session at $0.055 per share. Not bad, especially when you take into account that NGMC was traded at a six-month low of $0.041 at the beginning of the month. A total of 190 thousand shares of common NGMC stock changed hands, which is a four-month record for the company. Therefore, the $10,000 invested in the latest promotional campaign in support of NGMC stock have definitely succeeded in raising much awareness about it. So much that NGMC could not resist the market pressure, hence the 20% depreciation.
Parallel with the promotional newsletters, investors also got some fresh corporate news. As seen on the company’s latest press release dated Dec. 19, NGMC no longer holds interest in the Kelly Snyder # 1 Texan property. By selling this asset, NGMC managers aim to provide the funds necessary for prospective acquisitions of oil properties within the Appalachian basin, as well as a couple of oil well re-entry projects. The latter refer to wells that used to produce oil but have been shut due to unfavourable market conditions.
NGMC’s quarterly report for the period ended Sept. 30 shows that its balance sheet consists of:
- cash reserves of $13 thousand;
- working capital deficit of $610K;
- net quarterly loss in excess of $192K.
While the company’s development strategy could potentially provide benefits to stockholders, it’s very implementation might face substantial challenges with regard to the financial load required to ensure that NGMC will continue operating as a going concern. At this stage, such a perspective can hardly be taken for granted.
