It is an apparent fact that OTC stock shareholders often like to take risks and invest in the companies with poor balance sheet. It is the same case with Megola Inc (OTCMKTS:MGON). However, the only difference is this time the risk is extended as the company has several red flags associated with its balance sheet. On Monday, the stock price jumped almost 16% to close at $0.0050. It is over excitement about a company that reported no employees in July 2014.
The financial mess
As per the latest financial report, there are numerous ‘NO’ in Megola’s balance sheet. Going by the report, the company had no cash, no assets and liabilities and no revenue in the reported quarter. Moreover, there were no operating expenses indicating that the company was far way from any operations. Megola Inc (OTCMKTS:MGON) has not published any press release in last ten months. During this period, the share prices have declined from $0.19 to $0.0009, wiping out 99.5% of the total value.
The latest financial report states that Megola has three websites. The problem here is that not a single website is operational. The website operated by the subsidiary MedCan just says it will be back up and functioning in no time. It is an all together different thing that the status has been unchanged since November 2014. If the broader picture is analyzed, the company appears to be in dismal state.
The strong share price movement is due to hype created by third parties. There are people who claim that they things will turn for better in near future. The rumors exist that Health Canada will inspect the Megola’s cultivation facility and can even grant the company with a license. However, there is no update from the company on the matter. Recently, Health Canada denied a license to Creative Edge Nutrition Inc (OTCMKTS:FITX).