Would you ever think that the creators of “Concerts that Change Your Life” could change your financial position for the better? For more than three years now, investors looking to buy penny stocks that are undervalued have searched through financial filings, message boards and Twitter in hopes of unearthing a ticker that, at least on paper, looks to be priced at a “Buy.” After NightCulture, Inc. (OTCQB: NGHT) announced their operating results for the quarter ending June 30, 2015, that chance to sneak in and scoop up NGHT stock might have just presented itself.
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After the bell on Thursday, NightCulture reported a 38.64% increase in revenue to a record $2,295,735 in Q2 2015 compared to $1,655,817 during the same period in 2014. Now while the quarter did not produce the bottom line net income an investor would want to see, net loss of $347,724 for the three months ended, net income for the six months ended June 30, 2015 is there, $448,730, and there could be another reason why NGHT stock is a Buy.
With just 10 shares shy of 100 million issued and outstanding as of August 13, 2015, back on May 27, the principal shareholders and directors of NightCulture, Michael Long and Surain Adyanthaya, agreed to convert the existing loans and accrued unpaid salary from the Company into shares of NGHT stock. Using the weighted average of the previous 30 trading days, Long received 16,427,403 shares and Adyanthaya 17,613,656 shares in exchange.
The conversion may not seem to be significant to some, however what has some worried is how, on June 19, NightCulture amended its articles of incorporation to increase the authorized shares of common stock from 100,000,000 to 500,000,000. This move was an obvious one as the issued and outstanding has nearly maxed out the original 100,000,000, but what could be disastrous is “Something Wicked” which is due come September 11.
Three years ago next month, on September 12, 2012, NightCulture issued $500,000 of convertible debentures maturing on September 11, 2015. As of June 30, the outstanding principal balance under this convertible debt was recorded as $421,260. The deal with the debt is that it is convertible into NGHT stock at 50% of the average closing price of the 20 day trading price ending prior to the date of conversion.
A quick look at the NGHT chart will show how the Exponential Moving Average of the last 20 days is 0.0111. If the debt was to be converted into shares, you could be looking at an additional 84 million or so NGHT shares with a converted cost basis of figure 0.005.
While there isn’t a lot of interest in NGHT stock (only one session trading over 1 million shares in the past 12 months), the reality of partying hard has been a profitable move for Long and Adyanthaya. While these concert revenues have all stemmed from Houston, Austin, Dallas, and San Antonio, maybe a move into another region could be an impact for even greater revenue growth and, eventually, greater bottom line net income.
Find out more about NGHT shares here: $NGHT
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