In a recent letter to shareholders, new CEO Dr Edward “Joe” Eyring, MD, said that the company was in decline for a variety of reasons. “The forces that were preventing us from this core objective were many, but can be categorized by; ineffective sales and marketing plans, misaligned staffing, lack of manufacturing cost controls, pricing models which prevented us from being competitive and finally, poor cash flows as a direct result of the conditions above,” Eyring wrote.
Early momentum squandered
Founded in 1995, Nutranomics went public in 2013. Since that time the company had concluded a deal with an Irish firm to bring a transdermal delivery technology to the US market. The company also pursued distribution contracts and sales overseas including in Japan and Bangladesh and the company is reported expanding sales into the European Union. At one point the company said it was operating in eight countries.
But overall financial results were disappointing, and traders on the OTC market, where the company’s stock trades, reacted accordingly. After trading briefly at more than 50 cents a share, the company’s share price disappeared into the penny stock category and has remained there for more than a year.
The company’s website lists a comprehensive range of multivitamins, probiotics, omega-3 supplements and herbal products under the Nutranomics and GenEpic brands. The company advertises its vitamin lines as “whole food” supplements, touting the vitamins as “natural” as opposed to the synthetic vitamins found in other supplements. That long product line focused on expensive raw material sources proved to be one of the company’s weaknesses, Eyring said. Some product lines had poor cost controls.
“Our work resulted in significant reductions of operating costs, and in one such case, we found an available cost reduction of 30% on our leading products. We expect to realize these financial benefits and others in the coming quarters,” Eyring said.
He also said the company is revamping its sales controls to better translate manufacturing cost savings into positive financial momentum for shareholders.
“We studied customer purchasing patterns and trends in the market and engaged the Hamacher Group to update our brand and positioning for our current and future products we will launch,” Eyring said.
Cleaning up the financing
Eyring said that he intends to inject a sizable amount of his own cash into the company to clean up the company’s financial structure which has served to water down the value of individual shares.
“We qualified and quantified each of the financings which may have dilutive effects in the future. I say "may" because it is our intent to pay them off if possible, all of them, with capital I plan to personally inject into NNRX in the coming weeks,” Eyring said. The precise nature of those transactions and the size of the investment will be disclosed in a Form 8K filing in the coming weeks, Eyring said.
Eyring laid out the near-term plan for the company’s future thusly:
“1. Rebuild Nutranomics' sales and communicate our efforts
2. Diminish or eliminate dilutive financing structures currently in place
3. Finance our business with new capital
4. Report our successes each step of the way.”