Hemp Inc (OTCMKTS:HEMP ) Accelerates Its Drop
Out of the last eight sessions Hemp Inc (OTCMKTS:HEMP) closed in the green a single time. Not only that but the downtrend seems to be picking up even more speed – last Friday the stock crashed by more than 10% and closed at $0.055 per share. With this HEMP has now managed to wipe nearly all of the gains registered at the end of last month.
After the end of Friday’s trading the company finally submitted its financial report for the third quarter of the year so maybe the numbers inside it could get investors excited. Unfortunately at the end of September HEMP‘s financial state was once again far from encouraging:
• $80 thousand cash
• $1 million total current assets
• $173 thousand total current liabilities
• $72 thousand sales
• $3.1 million net loss
The report also showed that the common stock is still being diluted through the conversion of preferred and preferred K shares and as a result the outstanding shares grew from 320 million at the end of June to nearly 400 million as of September 30. Investors should keep in mind that earlier this year HEMP increased its authorized shares to 5.5 BILLION while also implementing a 1-for-10 reverse split. With 55 million preferred and 172 million preferred K shares still outstanding the dilution may not be coming to an end anytime soon.
On November 17 HEMP announced that they have entered into a 5-year definitive agreement to sell the hemp fiber from their decortication plant in North Carolina to a hemp denim company called Hemp Blue. The PR failed to have any positive effect on the stock and this shouldn’t be such a surprise. Hemp Blue is actually a startup company that is currently seeking to raise some funds through a kickstarter page.
As for HEMP‘s decortication plant the last video update provided by the company is now nearly two months old. At the end of September HEMP stated that the plant should be completed by the end of the year but unexpected delays could push the date into next year. Well, it seem that such “unexpected delays” did occur – the November 17 PR revealed that the plant should now become operation in early 2016. Furthermore HEMP do not expect to start processing hemp earlier than the third or fourth quarter of next year.
The risks surrounding HEMP should not be underestimated in the slightest. It is paramount to do your own due diligence before committing to any trades involving the stock of the company.
