AlumiFuel Power Corp. (OTCMKTS:AFPW) – Another Pennystock Entering the Marijuana Industry
For the last four and a half years Alumifuel Power Corp. (OTCMKTS:AFPW) has been focused on the development of a process for the generation of hydrogen fuel. We can’t say that they were even remotely successful when their stock price was going nowhere but down and at the start of 2014 it hit the absolute bottom of $0.0001 per share.
- $5653 cash
- $14 875 total current assets
- $3.2 million total current liabilities
- ZERO revenues
- $336 855 net loss
With the start of the 2014 AFPW showed some signs of life and slowly climbed back up the chart. In February the positive momentum increased and the stock was able to leave the triple zero price ranges. Unfortunately for the shareholders of the company the climb didn’t come as a result of some significant progress but was instead caused by a couple of PR articles.
Apparently AFPW have decided to transfer their hydrogen fuel operations to their subsidiary NovoFuel, Inc., which is supposed to go public in the future, and look for something else to do. On February 6 the management team announced that a new subsidiary will be created – Bitcoin Capital Corporation. There weren’t many concrete details revealed but as its name shows the subsidiary will be pursuing business opportunities involving the biggest cryptocurrency at the moment.
On the day of the announcement AFPW surged by 43% and closed at $0.0023 on a traded volume of 322 million shares. Sadly the Mt. Gox fiasco brought many of the bitcoin enthusiasts back to reality and AFPW suffered a series of corrections. So when one of the currently hyped-up industries is having troubles the only thing left to do is to join the other.
AFPW did exactly that in yesterday’s PR announcing the creation of their Specialized Energy Applications Group which is going to initially focus on the marijuana industry. Well, the news certainly brought a lot of attention to the company resulting in the record number of 478 million shares traded during the session. The problem is that investors were not exactly thrilled and AFPW dropped down by 22% to $0.0017.
It seems that even the marijuana hype cannot overcome the numerous red flags around them. We already mentioned the dismal financial state of the company but now let’s take a look at their share structure. At the start of November there were 320 million outstanding shares while at the end of December that number had nearly doubled to 609 million. Taking into account the numerous convertible notes that AFPW has signed and it becomes highly unlikely that this would be end of the dilution.
That may explain the need to increase the authorized number of shares on two separate occasions in just a few months. In October that number was bumped up to 750 million common shares from 500 million, which proved to be quite insufficient and in January it was corrected to 3.5 BILLION shares.
In the past couple of weeks we have seen quite a few dead pennystocks that are trying to live a second life in the marijuana industry. The first ones to switch enjoyed an immediate surge in share price but since then investors have not been so enthusiastic. AFPW has already crashed on the very same day of the marijuana announcement so be careful and do your own due diligence before attempting any trades.
Even some of the older marijuana companies are starting to lose steam. HEMP, Inc. (OTCMKTS:HEMP) has been slowly sliding downwards losing another 3.7% yesterday and ending the session at $0.12. Cannabis Science, Inc. (OTCMKTS:CBIS) is showing a similar chart pattern dropping by 3% to $0.17 per share.
