Citron Reports on Red Flags at Nucon-RF (Pink Sheet:NNRF)

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Nucon-RF is a pink sheet company that, as of their last filing, had just $100,000 in the bank.  Yet investors have been snapping up shares, giving this mysterious company a market cap close to $400 million.  With no operating history and a series of mysterious acquisitions that are unaudited and nearly impossible to verify independently, Citron attempts to break down what we know about Nucon.
All of the information in this report can be verified at:

http://www.pinksheets.com/quote/print_filings.jsp?url=%2Fredirect.asp%3Ffilename%3D0001144204%252D07%252D009485%252Etxt%26filepath%3D%255C2007%255C02%255C22%255C&symbol=NNRF
This brief prelude to a longer report highlights Citron’s findings about Nucon. so far:

1. Their headquarters is a P.O. box.  They list 1574 Gulf Rd. #242, Point Roberts Washington as their US headquarters.  That address is directly linked to a PO Box just right over the border only a short drive to Vancouver.  The company uses a Vancouver phone number that goes directly to Todd Sinclair.

2. Only two months ago the company raised money through a convertible note at .75 cents a share. (how much can have changed in the last two months?)

3.  In September of 2006, the company issued 400,000 shares to a consultant for public relation services.  Who got that stock bonanza?
But here is the main meal:  In today’s press release, Nucon informs the investing public that its newly owned subsidiary ATOLL has revenue projections of $180 million for 2007.   They state that ATOLL is set to turn a profit of over $20 million for 2007. 

Everything I need to know I learned in kindergarten….If something seems to good to be true, it probably is. 

Lets us look what we know about ATOLL.  ATOLL whose real name is Zao Electro Machinery plant has no web presence whatsoever.  Besides the press releases from NNRF, it appears that this company does not have any public presence.   We are yet to see an 8-K with audited financials of ATOLL, yet the press releases boldly offer future guidance.

We are expected to believe that ATOLL is selling 50% of this great profitable business for $2.26 million in cash and 4 million shares of a pink sheet shell which at the time was trading under a dollar.  Can anyone say Brooklyn Bridge?

Citron commends the folks at Mercer Capital who have been working the phones to keep the rise in the stock, yet we recommend to readers, that if anyone ever calls you to buy a pink sheet company that has not filed up-to-date and accurate financials, you run as fast as you can.

In a follow up report, Citron will discuss the people behind Nucon and the trail of cheap stock.  Furthermore, we will do more digging to see if there really is a business there.  Until then, Cautious Investing To All — and require that any company you invest in submit current and accurate reports in their SEC filings.
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