Nutech Energy Resources Inc (OTCMKTS:NERG) Sinks Below a Penny
In July, when Nutech Energy Resources Inc (OTCMKTS:NERG) started trading under its current ticker symbol, the management team announced that the proprietary technology they own could reduce the overhead costs of pumping natural gas out of the ground by as much as 60%. Yesterday, they said that it could cut the expenses by no less than 80%. If this trend continues, in a couple of months’ time they’ll announce that they’re producing natural gas for free.
The claimed cost reduction isn’t the only thing that has grown over the last five and a bit months. When NERG acquired its new trading symbol, it was hovering between $0.002 and $0.003 and the volumes were quite pitiful. By contrast, yesterday, it managed to rack up a volume of about 27 million shares and it closed the session at $0.0086 per share. That said, the performance is hardly spectacular.
About a month ago, a paid pump pushed it out of sub-penny land, but, somewhat predictably, the surge was followed by a drop. A second wave of touts brought some more green sessions, but it would appear that the promoters have now moved on and the ticker is back below $0.01 per share.
On the face of it, yesterday’s drop is quite strange. About an hour before the opening bell, NERG issued a press release and said that they’re on track to acquire some more wells and possibly up-list the stock to NASDAQ in the very near future.
The prospects, as far as this, and a few of the older press releases are concerned, sound brilliant. The same can not be said about the latest financial report unfortunately. Here’s what the figures looked like on August 31:
- NO assets whatsoever
- current liabilities: $4,916,766
- NO revenues
- twelve-month net loss: $347,306
Now, we should note at this point that these financials were recorded more than three months ago and there’s every chance that they might look a bit different at the moment. Sadly, we’ll need to wait for a while before we see some more up-to-date figures and in the meantime, there’s one more thing we should probably point out.
According to the report, NERG‘s management team have agreed to issue as much as 245 million shares at $0.006 apiece in order to satisfy roughly $1.6 million worth of debt. In addition to this, at the end of August, there was a further $765 thousand worth of debt convertible at a 50% discount to the market price.
The likelihood of a massive amount of discounted shares hitting the open market is quite high and if it happens, the ticker could find itself in great peril.