Bonamour Inc (OTCBB:BONI) Reaches an Important Milestone, Investors are Unimpressed

BONI.gifBack in May, Harbinger Research LLC wrote a research report on Bonamour Inc (OTCBB:BONI) and gave the ticker a twelve month price target of $2.42 to $3.02. Undoubtedly, a bold and optimistic projection, but when you have in mind the fact that BONI paid Harbinger $10 thousand for the coverage, it’s hardly surprising.

At the moment, the price target seems a bit far fetched, but we should say that, if everything goes according to plan, it might just turn into a reality. But what are the chances of that?

Well, things are not off to the best of starts when you open the latest financial statement. It covers the third quarter of 2013 and it boasts the following figures:

  • cash: $46
  • current assets: $41 thousand
  • current liabilities: $270 thousand
  • no quarterly revenue
  • quarterly net loss: $27 thousand

When you compare the Q3 results with the ones from the previous periods, you’ll see that BONI have burned through quite a lot of cash during the three months ended September 30 and you’ll also notice that the liabilities are mounting. It’s clear that the management team will need to find a way of dragging the company out of the financial hole if they want to succeed.

Speaking of the management team, there is one more thing to consider. BONI is run by a single person called Nathan Halsey who is listed in the filings as the sole officer and director. Quite a lot of responsibilities for one man, you would agree, and as if this wasn’t enough, he also has to think about another penny stock that he controls – Texstar Oil Corp (OTCBB:TEXS). TEXS is a mineral exploration enterprise and, if anything, their latest 10-Q looks even worse than the one presented by BONI.

Mr. Halsey is also at the helm of a privately-held entity called Bon Amour International, LLC. That name is present in the SEC filings of both BONI and TEXS and we reckon that you should take a closer look at the transactions between the three enterprises before making your final decision.

On the whole, there’s quite lot of things you need to consider when you are weighing the risks of a potential investment which is probably why the ticker slid by around 8% during yesterday’s session. Yet, we should say that there are some positive things as well.

Yesterday, for example, half an hour before the opening bell, BONI issued a press release which informed us that the company has received an important certificate from the Personal Care Products Counsel, which confirms their products’ compliance with all the federal guidelines. Although the certification was done by a US regulatory organ, BONI have no intention of selling their Rejuvenating Trio in America. Their target markets are located in Asia, but even so, the document should help them secure export permits to some countries.

Another plus point is the fact that BONI have a product that is already developed (which is more than can be said about many other penny stocks). We read in yesterday’s press release that they even did a test launch of the Rejuvenating Trio in Hong Kong and, according to Mr. Halsey, it has been a resounding success.

50NNRX.pngThe lack of paid promotions is another good point. Apart from the report that we talked about at the beginning of the article, we could find no traces of touting the company or its stock. Which, by the way, is more than can be said for other small cap enterprises like Nutranomics, Inc. f/k/a Buka Ventures Inc (OTCBB:NNRX) whose performance is, as you can see, absolutely dreadful.

All in all, BONI has its upsides and its downsides. Considering the risks is, as always, absolutely vital before committing to an investment.

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