Greengro Technologies Inc. (OTCMKTS:GRNH)’s Surge Didn’t Last

tags: GRNH

Greengro Technologies Inc. (OTCMKTS:GRNH) managed three impressive jumps at the end of June, but it was clear from the get-go that the gains it made back then were unretainable – and, true to form, now it is crashing right back down again.

This sort of thing has been the norm since the great green rush that shook the market in the wake of marijuana’s legalization a couple of years back. The story is always the same – penny stock company talks big, gets some publicity. The ticker soars for a couple of days, but since there is nothing of substance keeping it up, it comes crashing down the moment the hype pushing it upward dissipates.

GRNH has seen quite a few such surges. This is hardly the first time it has put on a brave face and declared something bold. Unfortunately, it doesn’t really look much better equipped to capitalize on the booming marijuana market, with financials looking like this:

• cash – $204 thousand cash
• total current assets – $992 thousand
• total current liabilities – $645 thousand
• revenues – $197 thousand
• net loss – $173 thousand

No matter how many great steps forward the company claims to have made recently, these do not look like the numbers one would find in the reports of a promising up and comer. No, rather, they look like what you’d find in the reports of most dubious OTC Markets marijuana penny stock companies.

And you know what else GRNH shares with most of the sector? If your answer was “a tendency towards toxic funding” – congratulations, you are absolutely right.

A quick check reveals that GRNH has issued 54 million shares for consulting services during 2015 alone, while 7 million more were printed due to conversions of debt at a rate of $0.005 per share. What’s worse is the fact that, as GRNH‘s filings can attest, it is not like such practices are a thing of the past. Q1 of 2016 saw another $40 thousand worth of notes converted into approximately 8 million shares. Q2, on the other hand, saw another 12 million shares issued for consulting services.

So in the end, we have a ticker that’s kept up mostly by boast-driven hype and well-wishing, while being pulled down by the company’s mediocrity and hideously bloated share structure. This is why it was so obvious where GRNH was going to head eventually – just like it is obvious that the ticker is not likely to stop losing altitude just yet.