Hemp Inc (OTCMKTS:HEMP) Files Quarterly Report
For the past several sessions the stock of Hemp Inc (OTCMKTS:HEMP) has been trying to stabilize. That, however, is not exactly encouraging – the ticker is still trading at lows last seen in 2011. And the losses could become even bigger thanks to the quarterly report that was filed yesterday.
Hemp were supposed to submit their financial report for the second quarter of the year by August 15. The company couldn’t do so and instead it filed a notification of late filing according to which the report was anticipated to be completed on August 19. That didn’t happen, either. The quarterly was finally published yesterday and now investors have a chance to see a more current picture of the company’s financials. And that picture is far from pretty – as of June 30 HEMP had:
- $176 thousand cash
- $907 thousand total current assets
- $2.5 million total current liabilities
- $33 thousand sales
- $1.14 million net loss
During the quarter the company has managed to burn through $500 thousand of its cash reserves compared to the amount at the end of March. Just for the first half of the year the current assets have decreased by 4 times while the current liabilities nearly doubled. The amount HEMP owes to its CEO has increased to nearly $2.3 million.
At least, thanks to the 1-for-10 reverse split performed at the end of July, the outstanding shares of the company shrank from over 3.2 BILLION to 320 million as of June 30. The potential dilution is still massive though. The authorized shares were recently increased to 5.5 BILLION while during the quarter HEMP issued close to 100 million preferred K shares bringing the outstanding amount to 214 million. Keep in mind that each preferred K share can be converted into 10 common shares .
It appears that HEMP in an attempt to create at least some hype around their stock have hired Quality Stocks for 90 days of advertising, branding, marketing, investor relations and social media services. The compensation paid by HEMP is $21 thousand.
Trading the stock remains extremely risky. HEMP are more than likely going to remain a highly volatile choice. The reassembly of the Temafa decortication line is nearly 70% according to the latest PR published by the company but even when the plant becomes operational the red flags surrounding HEMP should not be underestimated.
