Greengro Technologies Inc (OTCMKTS:GRNH) Drops Further Down
Back in April Greengro Technologies Inc (OTCMKTS:GRNH) climbed all the way up to 12 cents per share registering their current 52-week high. Not only did those prices prove to be unsustainable, though, but since then the stock has been wiping more and more of its value. After dropping by another 7.78% at the end of Friday’s trading the stock is currently sitting at $0.0457, or more than 60% below the April high.
The depressing chart performance might leave some investors quite surprised. After all, in their April 12 press release GRNH did announce record breaking year-over-year sales growth for the first quarter of 2016 with $522 thousand in recorded sales. When the financial report covering the first three months of the year was finally submitted, though, it turned out that the sales projections of the company were quite a bit inflated – as of March 31, 2016, GRNH had:
• $204 thousand cash
• $992 thousand total current assets
• $645 thousand total current liabilities
• $197 thousand revenues
• $173 thousand net loss
While the reported revenues were no where near the announced $522 thousand it cannot be denied that compared to the same period a year ago the company has made significant progress – the generated quarterly revenues are up by $45 thousand while the net loss has been decreased from $778 thousand to a just a little over $170 thousand. It should be noted, however, that GRNH‘s cost of revenues increased drastically during the quarter and as a result the gross margin has actually gone down.
Another major factor that could continue to have a negative influence on the performance of the stock is the dilution. Last year GRNH issued over 66.5 million shares, out of which 54.1 million shares were for consulting services while 7 million got issued as a conversion of debt at just $0.005 per share. During the quarter covered by the report another 8 million shares were issued once again at $0.005 through more conversions. At the end of March the company still had $55 thousand outstanding convertible debt.
And before you get too excited about the fact at least no shares were issued for consultants you might want to take a look at the subsequent section of the report. According to it between April 1 and May 25 12 million shares were issued for consulting services.
While GRNH appears to be in a better shape than a significant portion of the other pennystock companies the red flags around it remain far too serious and shouldn’t be underestimated. Take the necessary time to do the required due diligence and to adjust your trades accordingly.
