Neutra Corp (OTCMKTS:NTRR) Registers Another PR-Fueled Spike

When it comes to press releases, Neutra Corp (OTCMKTS:NTRR) has been one of the most active penny stock companies out there. No less than nine new headlines popped up on the company profile at Yahoo! Finance between October 2 and October 23 and they spoke about numerous things like the upcoming vote on marijuana laws in some states, about the growth of the cannabis industry as a whole, and even about the threat coming from the deadly Ebola virus.

Though the volumes aren’t exactly consistent, investors do react to the continuous publicity every now and then. During Friday’s session, for example, they traded nearly 1.5 million NTRR shares while the ticker gained an impressive 31%. It finished the week at just under $0.25 (the highest close since August).

Generally speaking, there’s nothing wrong with that. On the contrary, a solid piece of news that could result in future gains for the company, the stock, and the investors is always a welcome sight.

The problem is, while NTRR have made quite a lot of promises over the last few months or so, they have been somewhat hesitant when it comes to delivering on them. In fact, if the latest 10-Q is anything to go by, the company is hardly working at all. Here’s a summary of the most important figures as recorded on July 31:

  • total assets: $31 thousand in cash
  • current liabilities: $441 thousand
  • NO revenue since inception
  • quarterly net loss: $888 thousand

As you can see, even though the market cap stands at under $8 million, it still appears to be a bit of a stretch considering the truly horrific fundamentals. That, believe it or not, is not NTRR‘s biggest problem, though.

If you’ve done some research on the company, you’d know that they did a 1 for 20 reverse split back in 2012. As a result, on January 31, 2013, the number of issued and outstanding shares was sitting at just under 5 million. Twelve months later, it was hovering around 15 million. Can you guess where it stood on July 31, 2014? 26.6 million. What about September 22 (the publishing date of the latest 10-Q)? Back then there were exactly 31,637,461 shares issued and outstanding.

In other words, in a matter of less than eight months, NTRR‘s printing press churned out 16,732,946 shares of common stock. The only question now is: “Who got them and why?”.

As is often the case, the answer lies in the 10-Q and you can get to it in a matter of a few clicks. All you need to do is open the report and scroll down to the Convertible Notes Payable section. In there, you’ll see that during the six months ended July 31, NTRR converted $313,329 worth of convertible debt into 11,732,946 shares of common stock. Scroll a bit further down and you’ll see that between August 4 and August 22, a further $250,000 worth of notes was turned into 5,000,000 shares.

So, now that you have all the facts, all you need to do is consider them carefully and decide whether jumping in at the current price really is worth the risk.

About an hour and forty minutes after the opening bell, NTRR is sitting at $0.23 (7.7% in the red).

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