CleanPath Resources Corp. (OTCMKTS:CLNP) on an Baffling Run
After sitting idle for months, CleanPath Resources Corp. (OTCMKTS:CLNP) is finally starting to wake up. On Monday, it jumped by a whopping 250% and registered around $147 thousand in dollar volume. Yesterday, it managed to add another 42% while shifting more than $400 thousand worth of shares. CLNP closed the session at $0.001 for the first time in three months and, judging by the buzz on the message boards and on social media platforms, most people expect to see the ticker run further up.
The thing is, while it’s not that uncommon for sub-penny stocks to make huge leaps up the chart, it is unusual to see them do it without any obvious catalysts. CLNP‘s latest press release, for example, is dated October 17, there’s no pump at the moment and they haven’t yet filed a financial statement for the period ended December 31, 2013.
In fact, the only thing that could be pushing CLNP up the charts is the fact that some months ago, their management team announced a partnership with one of Hemp, Inc. (OTCMKTS:HEMP)’s subsidiaries. As you probably know, HEMP is a marijuana company and as such, it’s being propelled up the charts by all the hype and excitement around the cannabis business that has taken over the OTC Markets in recent weeks.
People probably think that since HEMP is moving in the right direction, CLNP should be doing the same thing. The problem is, apart from the temporary buying pressure, we can see nothing supporting the stock in the long run. In fact, we might even say that CLNP has a few red flags around it.
If you have a look through the company’s latest financial statements, you’ll see that between December 2012 and September 2013, CLNP‘s management team printed a whopping 1.1 billion shares of common stock. Yet, for all the issuance, they have failed at ensuring a more stable financial situation for their company. Here’s a summary of the results for the third quarter of 2013:
- total assets: $28 thousand
- total liabilities: $53 thousand
- quarterly revenues: $11 thousand
- quarterly net loss: $27 thousand
Read on through the rest of the filing, and you’ll see that at the moment, half of the outstanding shares are held by a person called Ron Serota who, CLNP say, has some “legal issues“.
According to the filings, he is no longer part of CLNP and their operations, but unfortunately, Ken Lewis’ (the current CEO) reputation isn’t exactly spotless either. There is a special blog dedicated to Mr. Lewis and the rest of the management team and, having gone through some of the entries in it, we can see some serious allegations.
Of course, it’s up to you to evaluate the credibility of the author and his accusations, but whatever you decide, you should bear in mind that, with the lack of news and the pitiful financial statement, CLNP are going to have a really hard time supporting the market cap which, at yesterday’s close, stands at around $5.2 million.
Doing a lot of due diligence and carefully considering the risks is absolutely essential before putting any money on the line.
RightSmile Inc (OTCMKTS:RIGH) is another ticker that seemed all but forgotten until a couple of days ago. The fact that they seem to be involved in the medical marijuana industry, however, means that investors’ interest is now well and truly renewed. Over the course of just three sessions, RIGH managed to jump up by as much as 733% and yesterday, it logged a mind-bending $2 million in dollar volume.
