How often do you come across companies with $1 in cash? Maybe not very often, but there are some, like US Natural Gas Corp(PINK:UNGS). It is also being promoted, it sparkles vivid discussions over the Internet and delays its quarterly statement that was due this week. It was a vivid Tuesday, nevertheless. 
Indeed, the number of traded shares yesterday (more than 7 million) is the highest in the history of this company. The stock price, however, did not really benefit much from the hype, the session closing at $0.0066, which is less than a 10% increase for the day. A question asked here and there in financial forums was – why did this trading frenzy take place? There are the obvious possible catalysts – the press release and the notification of late filing – a positive one and a negative one.
Then, there is one more aspect not to get overlooked – the paid promotion. Usually, when there is a paid newsletter in place there is trading frenzy on the market that day. In this particular case, however, the hype took place one day in advance. Which makes the session today even harder to predict, given this curious line of events.
On a related subject, it is the whole future of the company that holds the element of uncertainty. As mentioned, the quarterly statement is late, but the 10K for 2010 is out and it includes some very controversial numbers:
- $1 in cash/ $510k in total current assets; [BANNER]
- $2.5 million in total current liabilities;
- $2.7 million in accumulated deficit;
- $544k in revenue;
- $341k in net loss;
Not the best financial condition but, after all, it is a pink sheets company that is only since February ineligible for quotation on OTCBB due to quoting inactivity under SEC Rule 15c2-11. The good news is that revenues are steadily increasing on an annual basis, while the net loss falls dramatically. Then, there are the warrants. As usual, in the absence of cash, payments could be done by issuing shares. Warrants issued are a long list in the 10K, but it all goes down to the number 61 million. This is the number of the outstanding ones on Dec. 31st last year, or almost 10 times more than on the same date in 2009.
All in all, it depends on what the next 10-Q will show. The stock has been in a free fall mode for quite some time now, so it might be high time for this company to show a balance sheet justifying the investments in its stock, which does not prove to be of much profit so far.
